Beer before liquor

MARKETS

  • U.S. markets: Yikes. More on that in a bit.
  • Energy: U.S. crude oil continued its downward spiral, tallying an 11th straight day of losses. It's the longest losing streak on record.
  • Currency: The dollar climbed to its highest level in a year and a half thanks to hand-wringing over European politics and expectations of higher interest rates stateside.

Want Morning Brew Daily Served Fresh to Your Inbox?
Drop Your Email Below...
 

STOCKS

With Great Power Comes Great Scrutiny

Picture
If you thought cranking out a slide deck for your manager who hasn't cracked a smile since 2015 was a lot of pressure...try being Apple.

It's among investors' favorite Big Tech bellwethers, and Big Tech often rules the day for the whole market. When tech can't muster gains, the rest of the pack gets antsy—like we saw yesterday.

  • Translation: Apple (-5.04%) has a lot weighing on it. And don't just take our word for it, ask SlateStone Wealth's Robert Pavlik. "People tend to ask what's Amazon doing today? What's Apple doing today?" he told the WSJ.

So what was Apple doing yesterday?

Worrying about Lumentum (-32.98%). The Apple supplier cut its earnings and revenue forecasts after one of its largest customers asked to "meaningfully reduce shipments."

  • Lumentum didn't name that customer, but Bloomberg data show Apple is Lumentum's biggest.

That set off alarm bells re: iPhone demand. "Investors should consider Lumentum's updated guide as reflecting as much as a 30% cut in Apple's orders," Wells Fargo told clients.

Interesting timing, huh? Last week, Apple reportedly axed a planned production boost for its shiny new iPhone XR. And two weeks ago, its quarterly results showed mediocre unit sales growth.

Now let's talk Amazon

Are bear traps Prime eligible? Amazon stock dropped 4.41% to fall into bear market territory (down 20% from its 52-week high).

But nothing really...happened. In fact, Amazon got good news—Instinet became the 39th bank (out of the 47 that cover Amazon stock) to put Amazon stock's price target above $2,000. It's currently at $1,636.85.

The big zoom out

Stocks with enormous momentum (read: Apple, Amazon, and their tech peers) aren't just notable for lofty prices, but also for how quickly they got there. Because of that rapid appreciation, today's volatile environment can disproportionately affect tech.

ENTERTAINMENT

Stan Lee Has Died at 95

As the writer, publisher, editor, and former president of Marvel Comics, Lee was (at least in part) responsible for so many of the characters you've dressed up as on Halloween: Spider-Man, The Incredible Hulk, Black Panther, X-Men, Iron Man, The Avengers, and more.

He was known for taking on complex social issues and giving his superheroes more nuanced personalities, making them more relatable and...human.

With all the hats he wore, Lee left us with a lot of wisdom. Here's one famous quote:

  • "I used to be embarrassed because I was just a comic-book writer while other people were building bridges or going on to medical careers. And then I began to realize: Entertainment is one of the most important things in people's lives. Without it, they might go off the deep end. I feel that if you're able to entertain people, you're doing a good thing."

Fast forward: Marvel was sold to Disney for more than $4 billion in 2009. And Marvel Cinematic Universe films have grossed more than $17.5 billion at the global box office.

INDUSTRIALS

All Pain, No Gain for GE

General Electric (-6.88%) CEO Larry Culp is finding out that you can rip off a Band-Aid...but it still hurts like crazy.

Shares of the industrial conglomerate continued to sink Monday after the newly minted chief went on CNBC to describe his "sense of urgency" to lower debt levels and continue selling assets. The stock is down more than 50% this year.

There's been no "honeymoon" period for Culp:

  • He slashed GE's quarterly dividend to just a penny a share.
  • Its power business continues to struggle due to weak demand and mechanical issues.
  • GE revealed it's the subject of federal accounting probes.

So where might a cash influx come from? Well, GE's already planning to sell its stake in Baker Hughes (an oil field supplier), and it's exploring a spin-off of its health care business.

Bottom line, courtesy of Culp: "We have no higher priority right now than bringing those leverage levels down. It's important to strengthen the balance sheet."

PUBLISHING

Michelle Obama’s Big, Buzzy Book

Look, not all nonfiction reads are greeted with equal anticipation. There was that 1950s-era textbook for 10th grade World Civ...and then there's former First Lady Michelle Obama's new memoir, Becoming.

The hype is real. The 426-page book—out today—jumped to No. 1 on Amazon four days ahead of its release. But it's still got work to do...

Penguin Random House, which is publishing Becoming (c/o a $60 million, two-book deal inked with Obama and her husband last year), ordered 3 million hardcover copies of the book for print.

  • Just two nonfiction titles—Unbroken and The Life-Changing Magic of Tidying Up—have sold over 2 million hardcover copies since 2010.

But the bet could pay off. Some estimates put gross sales in the U.S. alone at $46 million. And the 10-city arena book tour Obama's embarking on later this month is already making bank—VIP tickets with a chance to meet Obama have sold for up to $2,750 each.

BEVERAGE

Beer Before Liquor…

...that's all we got. You're going to get a story about beer, followed by one about liquor.

First, beer

Pabst Brewing Co., creator of PBR, headed to court yesterday to battle MillerCoors, which Pabst says is trying to put it out of business. We're guessing they'll be streaming it live at the Rec Room in Charleston, which claims to be the world's No. 1 seller of PBR cans.

  • The backstory: Under a 1999 partnership, MillerCoors produces, packages, and ships most Pabst products, from PBR to Natty Boh.
  • But that agreement expires in 2020. And Pabst argues MillerCoors is offering unreasonable terms for an extension in a bid to kill off Pabst and grab its market share.

Then liquor

Top liquor maker Diageo (-0.23%) is selling 19 brands (including Seagram's VO whiskey) to fellow distiller Sazerac for $550 million.

A coming-of-age story: Diageo is undergoing the same transition you made after college—ditching lower-end spirits for top-shelf booze. Remember, it bought George Clooney's Casamigos tequila last year for as much as $1 billion.

WHAT ELSE IS BREWING

  • Goldman Sachs stock tumbled 7.46%, its worst day in seven years, as Malaysia demanded a refund of fees related to the 1MDB scandal.
  • Lyft will launch a loyalty program dubbed Lyft Rewards to a select group of U.S. riders in December.
  • Aurora Cannabis (-4.53%) said its revenue surged 260% over the last 12 months after it produced more than 11,000 pounds of cannabis (up nearly 400% from last year).
  • Kellogg (-1.09%) is exploring a sale of its Keebler, Famous Amos, and fruit snacks businesses.
  • Facebook (-2.35%) temporarily went down for some users yesterday afternoon. Get an error message trying to sign on? Yeah, you were one of those users.
  • Coty (+1.76%), the cosmetics brand behind CoverGirl, said CEO Camillo Pane is stepping down after two years for family reasons.

BREAKROOM

From the Crew

Yesterday, we said that sales during Alibaba's Singles Day event passed Amazon Prime Day sales in under 10 minutes, aka "the time it takes you to shower and brush your teeth."

Apparently, that was controversial. One reader emailed, "Dear Brew, I am wondering who takes showers that are less than ten minutes?" This, of course, set off a major debate in the office.

So, we realize this is...well, a personal question for an email newsletter to ask its readers, but hey, we're friends, and we need to find out: How long are your showers? Let us know here.

Brain Teaser

Each letter in the sets of equations below represents a number; substitute the numbers in to make the expressions correct. Each letter represents the same number.

ABC/3=JE

DEF/6=JE

GHJ/9=JE

(Answer located at bottom of newsletter)

Want Morning Brew Daily Served Fresh to Your Inbox?
Drop Your Email Below...

 

Breakroom Answers


Brain Teaser
219/3=73
438/6=73
657/9=73

 

Similique quaerat modi voluptate repellat natus doloribus. Incidunt odio commodi recusandae quas vel quibusdam voluptate aut. Veritatis voluptatem vero voluptate ut dignissimos vero qui illum. Ut possimus et error optio officiis.

Sed sequi facere laborum recusandae. Voluptas dolor voluptas sit sed impedit. Laboriosam corrupti minima dignissimos culpa. Ea alias sint voluptatibus provident ullam. Sequi quis aut quod sunt est incidunt quidem.

Sapiente corporis laboriosam illum quos. Deserunt nihil et itaque ipsa assumenda nesciunt impedit. Nulla adipisci voluptate est ducimus porro. Eum excepturi quod minima rerum iure soluta est dolorum.

Dignissimos repellat praesentium provident sit quasi voluptatem corporis. Et enim mollitia cumque est aspernatur quas. Odit quia sunt quisquam corporis accusamus molestiae numquam.

I'm an AI bot trained on the most helpful WSO content across 17+ years.

Career Advancement Opportunities

March 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Goldman Sachs 19 98.8%
  • Harris Williams & Co. (++) 98.3%
  • Lazard Freres 02 97.7%
  • JPMorgan Chase 03 97.1%

Overall Employee Satisfaction

March 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

March 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

March 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (19) $385
  • Associates (86) $261
  • 3rd+ Year Analyst (13) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (66) $168
  • 1st Year Analyst (202) $159
  • Intern/Summer Analyst (144) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
Secyh62's picture
Secyh62
99.0
3
Betsy Massar's picture
Betsy Massar
99.0
4
BankonBanking's picture
BankonBanking
99.0
5
dosk17's picture
dosk17
98.9
6
DrApeman's picture
DrApeman
98.9
7
kanon's picture
kanon
98.9
8
CompBanker's picture
CompBanker
98.9
9
GameTheory's picture
GameTheory
98.9
10
Jamoldo's picture
Jamoldo
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”