A phone for ants

MARKETS

• U.S. markets: After getting clobbered last week, tech continued to drag down the major indexes.
• Economic data: Retail sales ticked up just 0.1% in September. One of the reasons? You letting your friends know that you're "just going to take it easy tonight." Spending at restaurants and bars dropped the most since December 2016.

TECH

It’s Like a Phone, But It Isn’t

The next big thing in personal tech (maybe) is the Palm. Now, that may sound familiar but...the similarities between this Palm and the PDA of late-90s fame are in name only.

What's the Palm do?

The Palm is part smartphone, part smartwatch. It's billed as an "ultra-mobile" device that pairs with the smartphone you already own. And it comes from an SF-based startup conveniently also called...wait for it...Palm.

• It makes calls, has front- and rear-facing cameras, and runs Android apps.
• It's tiny—the Palm has a 3.3-inch display, compared to the new 6.5-inch iPhone XS Max.

While we're here: Stephen Curry, Golden State Warriors point guard and two-time NBA MVP, is a Palm investor/spokesperson/creative strategy director. Here's how Steph's prepping for tonight's season opener:

But no matter how cute the Palm is...

Or how often Steph Curry tells you to buy it...it still costs $349, plus you'll have to pay a monthly fee to add it to your Verizon plan.

• Speaking of...the carrier currently has exclusive rights to the Palm—you must have a Verizon contract to get it.

So why now?

Founders Dennis Miloseski and Howard Nuk (who met while at Samsung) want to solve screen addiction by giving you a less attention-grabbing screen. So they created a small phone to keep you off your big phone...but it can do most of the same things your big phone can.

"Digital wellness" is having a moment: Apple's most recent operating system added Screen Time—which gives you data on your iPhone and iPad usage. And there's also The Light Phone, a "phone away from phone" that's "designed to be used as little as possible."

An ultra-mobile bow to wrap up the Palm's rollout: "Cute? Check. Interesting. Double check. Ready to disrupt the industry? The jury is definitely still out on that one," wrote TechCrunch.

GEOPOLITICS

SoftBank’s Coziness With Saudi Arabia Is Causing Pain

As the situation over the disappearance of journalist Jamal Khashoggi continues to simmer, investors are increasingly shunning companies with close ties to Saudi Arabia.

• Remember, Saudi Arabia's been accused by Turkey of killing Khashoggi. Now, several outlets are reporting that the kingdom is prepping a statement saying the killing was an interrogation gone wrong.

Those closely linked companies include Japanese tech conglomerate SoftBank, which lost more than 7% of its value on Monday.

What ties are we talking about?

• You've heard of SoftBank's ~$100 billion Vision Fund that's plugged Silicon Valley startups from WeWork to Uber. Well, the Saudi government wrote a $45 billion check for the fund.
• Last year, Saudi Crown Prince Mohammed bin Salman announced plans for a $500 billion futuristic megacity with SoftBank CEO Masayoshi Son right by his side.

Now there's a catch-22 for SoftBank: Because of its Saudi connection, "SoftBank could find that start-ups are less willing to take Vision Fund money..." but "if it distances itself from Saudi Arabia, then funding to make the investments which are key to its future could be cut off," per the NYT.

CRYPTO

Fidelity Rolls Out Crypto Company

In crypto's latest step out of the depths of subreddits and into the spotlight of Big Finance, Fidelity Investments announced that it's rolling out a new standalone company for institutional clients to trade and store digital assets like bitcoin.

It's called Fidelity Digital Asset Services (FDAS) and it will buy/sell/hold bitcoin and ether on behalf of hedge funds, family offices, and financial institutions.

• FYI, 72-year-old Fidelity is the fifth-largest asset manager in the world with $7.2 trillion in assets under management and 13,000+ institutional clients.

Some say the move's been a long time coming...FDAS will handle custody (aka the safe storage of cryptocurrencies). While Nomura, Goldman Sachs, and Northern Trust have reportedly explored custodial services, there's been a severe shortage of big, incumbent banks actually making the leap.

Zoom out: Cryptocurrencies have had a worse 2018 than MoviePass. Bitcoin is down more than 50% YTD, with prices near ~$6,500. Remember Dec. 2017? Bitcoin traded near $20,000.

CYBERSECURITY

Apparently Jack Bauer Named IBM’s New Truck

It's called the "X-Force Command Cyber Tactical Operations Center," and it's IBM's (+0.20%) "first-of-its-kind" mobile cybersecurity training center, coming to a college campus or security event near you.

Its purpose? Help companies train and respond to cyberattacks and provide on-site support. One use case, per IBM, is to bring a command center to sporting events or other large gatherings that could use a heavy cybersecurity presence.

This thing is probably not going to pass inspection at your local weigh station. It's got...

• 20,000 feet of networking
• A telescoping light tower (as bright as 60 car headlights).
• 2 mounted satellite dishes.
• 22 workstations, 5 HD cameras, and a 12-foot-long exterior display.

Zoom out: This 18-wheeler is part of IBM's $200 million-plus investment into cybersecurity response facilities, services, and software.

STARTUP

Venture This: The Shoes You Feel Good About

New to this section? Well here's the gist: We'll introduce you to a startup making waves, discuss the pros and cons, then ask...would you invest?

Do expensive sneaks give you blisters and a moral hangover? Enter Allbirds, the minimalist sneaker company that prides itself on using innovative, environmentally-friendly materials—merino wool, eucalyptus, and even sugar cane.

What it is: Allbirds is just 2.5 years old, but it's raised more than $75 million in its short life...most recently with a $50 million fund raise (at a $1.4 billion valuation). Plus, it was profitable in 2016 and 2017, per Axios.

Why VCs are running to the bank: The shoemaker is siphoning a ton of money into materials R&D. But it's also expanding its brick-and-mortar presence, and it plans to take on Asian markets soon.

• FYI, in the last 18 months, investors have tied up ~$170 million in shoe-related startups.

But fashion is a fickle business, per Silicon Valley stylist Victoria Hitchcock: "When I see someone wearing Allbirds, I say, ‘I respect your choice, but that was a big leap a year ago and it's time to move on.'" Plus, is Allbirds's techie wear just too niche to catch on with a mainstream audience?

So we ask...would you invest in Allbirds? Tell us why/why not here.

WHAT ELSE IS BREWING

• The U.S. budget deficit grew by 17% in fiscal 2018 to hit $779 billion. That's 3.9% of U.S. GDP.
• Carl Icahn, the famous activist investor, revealed an 8.3% stake in Dell's DVMT tracking stock. He also announced he's definitely not a fan of Dell's plan to go public by buying back that stock.
• Bank of America (-1.90%) posted a 32% increase in net income last quarter, beating expectations. Rising interest rates are helping out.
• Here are four earnings reports to watch this week. And don't forget, Netflix (-1.89%) will be reporting after the bell this afternoon.
• Jeff Bezos said he'll spend a "little more" than $1 billion annually to fund Blue Origin, his rocket company.
• The Verge reviews the Google Pixel 3 smartphone.

BREAKROOM

Brain Teaser
Are there more square inches in a carpet 15 yards by 5 yards or feet in a 20-mile walk? Don't even think about using a calculator...

(Answer located at bottom of newsletter)

Breakroom Answers