Break it up

MARKETS

• U.S. markets: The major indexes all fell more than 2% this week. Which is a shame because we're actually in a celebratory mood today.

MARKETS

The Bull Market Turns 10

Remember March 9, 2009? Flo Rida’s “Right Round” topped the charts, and Hannah Montana: The Movie was one month out. A simple, happy time.

But not for the U.S. stock market. It bottomed out that day, with the S&P 500 hitting 676.53 points. Since then, the benchmark index has climbed about 309%.

To the numbers we go

This bull market has added a record $20 trillion to share values—and over that period, investing has gotten cheaper and easier.

• In 2010, about 49.9% of U.S. families owned stocks. By 2016, that rose to 51.9%, according to the Fed.

But it hasn’t been without speed bumps. Late last year, the S&P fell 19.8% on concerns over interest rates, the global economy, and the trade war. Hitting a 20% decline would’ve stopped the bull market in its tracks.

But...can it last?

This bull market has earned the title of longest on record, which makes any good skeptic wonder how long we’ve got left.

There’s the earnings thing. “As long as corporate profits are growing, that’s usually the oxygen for further gains in the stock market,” UBS’s David Lefkowitz told the AP.

• Profit growth for S&P companies averaged 25.6% in the first three quarters of 2018, but that growth stumbled to 13.4% in Q4.
• In 2019, analysts expect earnings to decline in Q1 and grow in the mid-single digits for the full year.

And the economy thing. It’s been showing signs of wear and tear (wait ’til you read the next story). But we’ll take some gray hairs knowing that this economic expansion will become the longest in U.S. history by the end of July.

While some forecast a roughly 50% chance of a recession over the next year, one CFRA analyst told the AP he and his colleagues “currently see no quarterly GDP declines through the fourth quarter of 2020.”

ECONOMY

You Can't Always Get What You Want, Economists

Like the 180,000 new jobs you were expecting the U.S. added last month. So how far off were you? Payrolls grew by only 20,000 in February, the weakest month for job growth since September 2017.

It wasn’t all a letdown at the Labor Department

The unemployment rate ticked lower to 3.8%, shrinking from the 4% jobless rate back in January. And average hourly wages grew 0.4%, up from 0.1% growth a month earlier. The year-over-year wage gain is now 3.4%, the highest in a decade.

Plus, February was just one piece of a much larger picture. We know you’re not supposed to compare yourself to others...but payroll gains in January were astronomical. And February’s gain (no matter how anemic) marks the 101st straight month of job creation for the U.S.

And the three-month average for job gains? 186,000—not too shabby for this point in the decade-long expansion.

REGULATION

Break It Up, You Three

Elizabeth Warren, 2020 Democratic presidential candidate and Massachusetts senator, is proposing “big, structural changes” to the tech sector, including breaking up Amazon, Google, and Facebook.

Yes, it would look dynamite as a bumper sticker on a Prius. But the proposal is also significant in that it formalizes swirling anti-tech giant sentiment. Well, as formal as a Medium post can get.

Big picture: Warren believes that Big Tech has amassed too much power, citing statistics showing almost half of e-commerce goes through Amazon, and more than 70% of all internet traffic goes through sites operated by Google or Facebook. “They’ve bulldozed competition, used our private information for profit, and tilted the playing field against everyone else,” Warren alleges.

So what does she propose?

• Restricting any company with $25 billion or more in annual global revenue that owns a platform from being a "participant" on that platform (think Amazon Marketplace and Amazon Basics)
• Unwinding some very high-profile mergers, such as Facebook’s acquisitions of WhatsApp and Instagram and Google’s purchases of Waze, Nest, and DoubleClick

Zoom out: Warren’s policies, while far from becoming a reality, confirm some of the darkest fears in Silicon Valley.

BEVERAGE

Is La Croix Cursed From Above?

Shares of National Beverage Corp. (-14.65%), parent of incredibly meme-able beverage La Croix, fell the most in two decades yesterday after the company posted a quarter so weak not even a cold Pamplemousse could fix it.

The company reported a 39.6% drop in profit to $24.8 million in the last quarter. And you know things are serious when you can’t even blame divine intervention for your poor performance.

• “We are truly sorry for these results stated above. Negligence nor mismanagement nor woeful acts of God were not the reasons—much of this was the result of injustice!” CEO Nick Caporella said.

The alleged injustice: A lawsuit filed in October—which gained traction on social media—accused La Croix of mislabeling its products as “all-natural.” In January, National Beverage said an accredited lab found no synthetic additives in La Croix.

But making matters worse, National Beverage got hit with a “sell” rating from Guggenheim, which cited growing competition in the flavored carbonated water space and waning social media buzz around La Croix. *Cue joke about this stock going flat.*

MANUFACTURING

So That's How They Make It

WHAT ELSE IS BREWING

• Most of Venezuela was still in the dark yesterday after a power outage left 70% of the country without electricity. Authorities pointed fingers at anti-government groups, but the U.S. blamed the Maduro regime.
• The U.S. women’s soccer team has sued U.S. Soccer for gender discrimination. Twenty-eight members of the women’s team are named as plaintiffs.
• Tesla (+2.73%) CEO Elon Musk is facing another lawsuit from institutional investors who really just want the guy to quit with the tweets, or as they call them, “repeated misstatements.”
• The owners of NYC’s Chrysler Building have reportedly reached a deal to sell the iconic skyscraper for a little more than $150 million—a fat loss, per the WSJ.
• Volkswagen’s emissions problems reportedly cost the carmaker $4.04 billion last year.

BREAKROOM

Saturday Headlines
Today’s headlines have a little bit of everything: Potatoes, GDP, antidoping, and something called “Mayocue.” Which one isn’t real?

• "Limited-edition russet potato comes with certificate of authenticity"
• "Heinz announces two new mayo-mashups: Mayocue and Mayomust"
• "China’s economy is 12% smaller than official data say, study finds"
• "Top bridge player suspended under antidoping rules"

Breakroom Answers