Alexa, Get Me That Report

Quote of the Day

I don’t think you can have an economy where people derive their income solely through donations.”

Market Snapshot

• Andy Weir, author of “The Martian,” telling everyone to go fund themselves.
• European and Asian markets fell despite word of further OPEC production cuts.
• Oil and energy stocks got a boost from the OPEC announcement.
• Bitcoin’s back down below $10,000.

Virtual Assistants Get a Promotion

The Internet of Things (IoT) world got simultaneously bigger and smaller today with news coming from home-device leaders Google (-0.02%) and Amazon (+1.33%): Google’s Nest may be heading home and Alexa is headed to a 9-to-5.

Google’s Nest egg

Google’s planning to reintroduce Nest back to its hardware division, rethinking a split two years ago that placed the home-automation unit under parent company Alphabet. Despite an amicable divorce, the move was a bit of a head-scratcher, considering the synergies in production and retailing.

Nest (acquired by Google in 2014 for $3.2 billion) was a first-mover in IoT devices such as thermostats, smoke detectors, and home security cameras. Calling Nest home to roost would also allow Google to mesh its cloud services with Nest products in its head-to-head battle with Amazon.

And it’ll need all the help it can get with Amazon’s latest announcement…

“Alexa, get me that report”

Coming soon to an office near you: Alexa for Business. Amazon’s virtual assistant is entering the workplace as a new tool for booking conference rooms, launching meetings, and maybe eventually getting your coffee order right.

A leader in the voice-recognition field with the Echo, Amazon’s making professional waves—WeWork is already on board with the service. New Alexa “skills” will give workers the ability to dim lights, adjust room temperature, and send a notification to refill the printer (this will only get confusing for the office intern, Alexa).

The effort to bring Alexa to work comes as the service is flanked by competitors Google, Siri, and Microsoft’s Cortana. But that shouldn’t hamper growth too much. Alexa device usage could reach 128 million by 2020.

It’s still up in the air whether companies will be comfortable having a smart-speaker listening in on sensitive conversations, but Amazon insists nothing is sent to the cloud until a user says “Alexa.”

“Alexa, please don’t share our company secrets.”

A Bad Sign-a With China

President Trump and China President Xi Jinping were one belly-bump shy of a bromance during last month’s trade talks. But now, U.S. and China are back at each other’s throats.

U.S. hits first

The Trump administration voted against recognizing China as a “market economy” in the WTO—a status that would allow China to export goods around the world at cheaper prices than competing countries.

What allows China to sell at cheaper prices? For one, government-backed subsidies that enable Chinese companies to trim expenses from their operations.

But China’s up in arms about the U.S.’ opposition. That’s because after joining the WTO in 2001, it was guaranteed market economy status 15 years later.

So naturally, Xi kicked back

As the world’s steelmakers gathered Thursday to discuss a global oversupply, China crossed its arms and refused to slow down production (or at least, to be the only one slowing down production).

And that’s an issue, considering the country controls ~50% of the world’s supply.

Don't Judge a Barnes & Noble by its Earnings

Harry Potter must’ve used his remaining PTO for the holiday season, as Barnes & Noble (-11.54%) blamed an 8% sales drop on the absence of a new book from the popular series. And despite promises of a rebound from CEO Demos Parneros, investors couldn’t overlook the glaring $30 million loss.

It’s nothing new for the struggling book chain, which watched shares fall 37% this year. But this could mean its final chapter in the public markets.

Barnes & Noble is already attracting suitors to take it private, with Sandell Asset Management writing up a deal for $650 million. It declined...primarily because the deal meant taking on $500 million in debt. But how long can it keep stiff-arming fate?

As it stands, Barnes & Noble lost $345 million since 2010, nearly 120 store leases are set to expire each year moving forward, and non-book inventory has been sitting on shelves, gathering dust.

Moving forward, Barnes & Noble has decided to “place a greater emphasis on books.” Certainly a compelling strategy for a bookstore.

OPEC Stays With the Status Quo

Sometimes less is more. Especially if you’re OPEC, which along with Russia announced it’ll extend oil production cuts through the end of 2018.

Right now, the 14-member organization prevents 2% of global petroleum output from hitting the market. And while that’s helped clear half the glut, the oil stockpile sits 140 million barrels above the five-year average. So there’s still more fat to trim.

OPEC, controlling 81.5% of the world’s crude reserves, effectively operates as a cartel, so yes, it has the power to influence the global market. And right now, it’s continuing to cut the supply in order to prop up oil prices, which have dipped to ~$60 from ~$100 in 2014. Great for our road trips to Bonaroo, not as great for oil-dependent economies like Saudi Arabia.

But OPEC would be wise not to overplay its hand. With ruthlessly efficient techniques, U.S. shale producers are chomping at the bit to flood the market if prices stay too high for too long.

What Else Is Happening…

• CVS’ (+4.63%) acquisition of Aetna (+0.34%) could be announced as early as Monday.
• Senator John McCain gave the thumbs up to the GOP’s tax bill, increasing its chances of passing through Congress.
• Verizon (+1.98%) announced it’ll roll out 5G in three to five U.S. cities by the end of 2018.
• 25 million businesses now use Instagram...that’s up from 15 million in July (spoiler: we’re one of them).

Economic Calendar

• Monday    Earnings: No Events

                    Economic Events: New Home Sales (+)

• Tuesday    Earnings: No Events

                  Economic Events: Consumer Confidence (+)

• Wednesday    Earnings: Tiffany & Co (+)

                        Economic Events: GDP (+/-), Corporate Profits (+)

• Thursday   Earnings: Barnes & Noble (-)

                   Economic Events: Jobless Claims (-), Personal Income and Outlays (+)

• Friday       Earnings: No Events

                 Economic Events: Motor Vehicle Sales, PMI Manufacturing Index, ISM Manufacturing Index

Buy/Sell/Hold

Buy—Cracking FB’s code

Figure out Facebook’s algorithms, and you too can rule the Newsfeed. It’s a strategy executed to perfection by Bored Panda, a digital publisher that’s amassed more than 30 million likes, shares, reactions, and comments on its FB page just this past month (far more than BuzzFeed, CNN, and NYT). Even more remarkable? This isn’t some Silicon Valley unicorn. The 41-person team operates out of Vilnius, Lithuania.

Sell—There’s a bug in my Apple!

Apple’s macOS High Sierra is having a rotten week. First, an update featured a bug that let anyone create a root account on a Mac without a root password (if you don’t speak geek, it made it easy for anyone to gain admin rights to your computer). Turns out the patch to fix the bug introduced an entirely new bug. Luckily, there’s a quick fix...for now.

Hold—Oh Snap

Snap bounced back from another tough quarter with a promising announcement about its new redesign—a Netflix-style algorithm that promotes personalized and vetted news. The birds are chirping, Spiegel’s smiling, and Snap’s finally back in busin… what’s that? YouTube just announced its own “stories” feature called Reels? After Instagram Stories stalled Snap’s user growth for four straight quarters? Well, snap.

The Breakroom

Question of the Day

Every answer is a compound word or a familiar two words in which the first word starts with "W" and the second word starts "Ba-."
Ex. Long ago —> Way Back

1. Top of a pair of pants that might be elasticized.
2. Round, white toy with holes that you hit with a bat.
3. Missile in a summer fight that lands with a splat.
4. Area disputed by Israelis and Palestinians.

(Answer located at the bottom of newsletter)

Who Am I?

I’m a co-founder of LinkedIn. Before that, I was the COO of PayPal. In high school, I farmed maple syrup, drove oxen, and studied epistemology.

(Answer located at the bottom of newsletter)

Stat of the Day

10,768%—Gain of the U.S. dollar relative to the Venezuelan bolivar over the past two years. The country’s hyperinflation would almost be amusing if it wasn’t also contributing to a humanitarian crisis.

Breakroom Answers

Question of the Day: 1. Waist Band 2. Wiffle Ball 3. Water balloon 4. West Bank

Who Am I?: Reid Hoffman