Baseball and brews

MARKETS

• U.S. markets: The Dow fell the most in two months, and the S&P and the Nasdaq also slipped. What put investors in a mood?...
• Bonds: The 10-year Treasury yield spiked to its highest level since 2011, briefly surging above the 3.2% mark.

REGULATION

The Season of Bernie

Bernie Sanders didn't win the presidency. The bills he's recently introduced have a roughly zero percent chance of becoming law. Taken literally, says one liberal writer, a few of his ideas are "unworkable nonsense."

Sure. But he's still managed to drive much of the recent conversation (and influence actual policies) in the business world.

Bernie's latest target? McDonald's.

Bernie penned a letter to McDonald's (+0.69%) CEO Steve Easterbrook urging him to raise his company's minimum wage to $15/hr.

• "If McDonald's raised the minimum wage to $15 an hour and respected the constitutional rights of your workers to form a union, it would set an example for the entire fast food industry to follow," he wrote.

Timing is everything: Sanders is feeling the wind at his back following this week's announcement that Amazon (which has been one of his favorite punching bags) is bumping up its starting hourly wage to $15 for 350,000 workers.

And while plenty of other factors were at play in Bezos's decision (the need to find and retain workers, for one), Amazon's CEO himself acknowledged Bernie & Co. made a difference:

• "We listened to our critics, thought hard about what we wanted to do, and decided we want to lead."

But Bernie's not just driving the conversation around minimum wage.

It's also big banks

Two days ago, Bernie introduced a bill that would cap exposure of financial giants to 3% of GDP (about $584 billion). That would force companies like JPMorgan and Berkshire Hathaway to break up.

So...are Jamie Dimon and Warren Buffett sweating through their tailored suits? Not at all. Per the WaPo's Jeff Stein, the bill is "dead on arrival." Not that that's the point (see: the also dead on arrival Stop BEZOS Act).

Here is the point, though: Even though they've been handed a major tax cut, big businesses will increasingly come under pressure by a motivated left flank led by Bernie. That flank could become a political force with actual power following the midterm elections (in 32 days). Big biz better get ready.

CYBERSECURITY

Chinese Spies *Maybe* Hacked U.S. Firms

Chinese spies have allegedly hacked into servers used by dozens of U.S. companies from government contractors to Apple (-1.76%) and Amazon (-2.22%), according to a doozy of a report from Bloomberg Businessweek.

We could write a book on the topic (someone probably will), but we'll keep it short. Here's the gist...

It's kind of like a Trojan Horse: The hackers (c/o the Chinese government) reportedly inserted small—like, grain-of-rice-small—chips into servers sold to U.S. firms from Chinese manufacturer Supermicro during the equipment manufacturing process.

That secret hardware is allegedly capable of destabilizing the servers it's installed on, siphoning off data and allowing in new code—plus gathering IP and trade secrets.

But before you take a sledgehammer to your iPhone...there's no concrete evidence that companies' or users' data were stolen or tampered with. And several firms in the report are strongly refuting the claims. Amazon said it's "untrue" and Apple said it has "never found" any such hardware attacks.

AUTO

Elon Musk Can't Help Himself

AUTO
Elon Musk Can't Help Himself
The ink isn't even dry yet on Tesla CEO Elon Musk's settlement with the Securities and Exchange Commission over recent fraud allegations...but he's still salty.

Musk mocked the SEC in a late-afternoon tweet, calling it the "Shortseller Enrichment Commission." Looks like that committee that'll be tasked with overseeing Elon's communications will have its work cut out for it...

Tesla stock didn't take it well. Shares dipped more than 2% after-hours following the tweet...and they had already been down 4.4% on the day.

Remember, Musk just reached a deal with the SEC (reportedly at the urging of none other than Mark Cuban) to settle fraud charges related to his August 7 tweet about taking Tesla private. By October 11, the two sides will have to justify the agreement as "fair and reasonable" in order for it to be approved by a federal judge. This tweet didn't help.

CONSUMER GOODS

Campbell Gets Ready to Cut the Fat

And we're not talking about its Chunky Hearty Cheeseburger Soup.

149-year-old Campbell Soup (+1.86%) is reportedly in talks to sell its fresh foods business—including brands Bolthouse Farms and Garden Fresh—to a group of investors led by former Bolthouse CEO Jeff Dunn.

• Quick rewind: Dunn helped a private equity shop sell Bolthouse to Campbell ~6 years back for $1.55 billion...then Campbell announced in August that it was looking to sell both its international and fresh foods units.

But since Dunn facilitated the Bolthouse sale, Campbell's fresh foods unit has, uh, struggled, to put it nicely (it's Friday). Campbell has written down the unit's value by ~$1 billion, and insiders think it could sell for as little as $500 million now.

Don't forget...Campbell is still facing a proxy battle with activist investor Third Point, which has called for a sale of the whole company plus a brand new slate of directors for Campbell's 12-person board. Shareholders will emerge from their Thanksgiving food comas on Nov. 29 to vote.

SPORTS

Baseball and Brews

The Milwaukee Brewers and Colorado Rockies are playing ball in the NL Division Series this weekend. And while it might not be a slugfest, it most certainly will be a beerfest.

That's because the Brewers play in Miller Park, while the Rockies play at Coors Field. The brewer MillerCoors is the proud owner of both Miller and Coors...plus Blue Moon, Terrapin, and more.

So, MillerCoors, we have to ask. Who are you rooting for?

Via @MillerCoors

But it couldn't resist a little friendly wager: Per MillerCoors, "Whichever brewery's team reigns supreme during the first round of the playoffs, the losing brewer will pick up the tab, Friday, Oct. 12, at participating bars across the city." FYI, the Brewers won the first game yesterday.

+ While we're here, here's the schedule for the entire slate of playoff baseball games this weekend.

QUIZ

The Brew’s Weekly News Quiz

Keep your brain going for a few more minutes. We know you can do it...

1) Netflix is planning to release a choose-your-own adventure special, its first interactive show designed for adults. Which show will it use as a guinea pig?

2) Regulators of all shapes and sizes were in the news over the past seven days. Which of the following did not happen:

a. The SEC agreed to a settlement with Elon Musk over his "funding secured" tweet.

b. The FDA said it collected more than 1,000 pages of documents from e-cig company Juul Labs.

c. The FAA is looking into whether Southwest Airlines deliberately reduced overhead bin space on JFK → San Francisco flights.

d. The New York State Department of Taxation and Finance is investigating the Trump family's business dealings.

3) Which company am I? I have 20+ million users who have completed more than $150 billion in transactions. I am reportedly raising money at an $8 billion valuation. I was very popular in late 2017.

4) President Trump announced a new trilateral trade deal with Mexico and Canada to replace NAFTA. What's the deal's five-letter acronym?

5) This guy was fired as CEO of GE. Do you remember his name?

6) Fill in the blank from a WSJ story: "Now 96 years old, [Nobel Prize-winning physicist Arthur Ashkin] told Nobel officials Tuesday that he might not be available for interviews about the award because ________."

7) Speed round time. We learned that 83% of IPOs through Q3 of this year involve companies that lost money in the 12 months prior to ringing the bell. How many 2018 IPOs can you name in 60 seconds?

Answers: 1) Black Mirror 2) Nothing happened with Southwest 3) Coinbase 4) USMCA 5) John Flannery 6) He is busy working on his next paper 7) Here's a list

WHAT ELSE IS BREWING

• The USDA issued a recall for more than 6.5 million pounds of ground beef over concerns of salmonella.
• Walgreens (-0.62%) is investing in beauty subscription company Birchbox. Look for more "prestige" beauty items at some locations.
• Nintendo is reportedly releasing a new Switch console sometime next year.
• Juul has asked regulators to order 18 other e-cigarette companies to stop infringing on its patents.
• Constellation Brands (+5.38%) said sales of beer, wine, and spirits—and its profits—rose in the last quarter. It offered full fiscal year guidance worth drinking to.

BREAKROOM

From the Crew
There's no Nobel Prize (that we know of) for college ambassadors...but our awesome student reps deserve recognition nonetheless. Each week we'll be highlighting a few Brew-bassadors who are going above and beyond.

This week's Nobel-worthy crew: Ryan Hsiao, Chanel Shum, Zach Bettigole, Nathanael Boatswain, Max Chodes, Casey Abney

Friday Puzzle
Name something in eight letters that's usually bought in pairs. Change the second letter to the letter two spots later in the alphabet, and you'll get a new word that names something else that's usually bought in pairs. Both words are plurals. What are they?

(Answer located at bottom of newsletter)

Breakroom Answers