Canceled

MARKETS

• U.S. markets: You might call this the calm before the storm. Stocks hardly moved Monday, but the busiest week of earnings season promises more action is on its way. Are you listening, Game of Thrones?
• Retirement: A government report concluded that Social Security will be insolvent in 2035 and Medicare will be depleted by 2026 (but that's actually a rosier picture than last year). Still, the trustees of the programs urged Congress to take action.

AUTO

No Steering Wheels, no Pedals, no Problems

Tesla detailed its plans for driverless cars at its Autonomy Investor Day, which started 43 minutes late...or if you’re Elon Musk, right on time.

Tesla, but make it driverless

The big news: the Full Self-Driving computer, hardware that took three years to develop, fits behind a Tesla’s glove box, and holds two independent chips that exclusively run Tesla-encrypted software.

• Because if you want something done right, get Samsung to build it for you. Tesla (-3.85%) had previously tapped Nvidia’s computing skills but took issue with its long client list and “generalized solution.”

Musk called this new computer solution the “best chip in the world...by a huge margin” and said today’s Teslas have everything they need for self-driving—aside from the software, which Musk says will undergo a plug-and-play update to make new models fully driverless down the road.

While yesterday was all about looking ahead, Tesla will be forced by its close buddies at the SEC to look back when it reports quarterly results tomorrow afternoon—and they’re all but guaranteed to show a loss.

As the WSJ points out, this week goes to show you…

There are two types of Tesla investors

The believers consider Tesla more tech than car company. Yesterday they got another taste of the Tesla Network, Musk’s vision of a shared fleet of super-efficient driverless cars to roll out as soon as next year.

• ARK Investment says a successful Tesla Network could send the company’s stock to $4,000 per share in 2023. That’s appreciation of about 1,364%.

Then there are skeptics, who highlight severe operational hurdles that have plagued autonomous carmakers from Ford to Waymo. They say Autonomy Day is a tried-and-true play for Tesla, designed to ratchet up excitement ahead of bad news. Mainstay’s David Kudla to the Journal: “I’ve seen this movie before.”

OIL

The Waivers Have Been Waived

Any high-ranking officials in the Chinese, Indian, or Turkish governments read the Brew? If so, listen up (respectfully): The U.S. isn’t renewing waivers to import Iranian oil.

The goal:

• “Bring Iran’s oil exports to zero, denying the regime its principal source of revenue,” the White House explained.
• The U.S. views Iran as a destabilizing force and wants to deprive it of more than $50 billion a year in income.

The backstory: Last year, the Trump administration reimposed sanctions on Iran after pulling out of the 2015 Iran nuclear deal. It had granted waivers to eight countries that purchase Iranian oil to a) buy them time to find other sources and b) not disrupt the global oil market, which, like a sleeping grizzly bear, is something you don’t want to poke.

To keep the bear snoring, the U.S., the U.A.E., and Saudi Arabia said they would make sure global demand was met as Iranian crude exports drop off. Still, oil prices jumped to their highest level since November.

CONSUMER GOODS

Hees Gone from Kraft Heinz

The struggling consumer packaged goods giant announced current CEO Bernardo Hees will be replaced by another management vet, Miguel Patricio, on July 1.

In the 69 days between now and then, Patricio's scheduled two-a-days with the whiteboard:

1. He'll need to boost weak sales, cut costs, handle an SEC investigation, and do something about the 43% drop in Kraft Heinz’s share price in a year.
2. He'll want to prevent more stories with titles like, “Here’s everything that has gone wrong for Kraft Heinz in the last year.”

Quite the to-do list, but Patricio’s got the experience. He’s the ex-CMO of AB InBev, which, like Kraft Heinz (-0.18%), is backed by 3G Capital. The Brazilian investment firm, along with Warren Buffett’s Berkshire Hathaway, helped merge Kraft and Heinz in 2015.

But 3G is “known more for cost-cutting than nurturing brands,” Bloomberg writes. That strategy (of job cuts and rollbacks) faltered at Kraft Heinz after it swung and missed at buying Unilever two years ago. Now, Patricio says his “first concern has to be people.”

PERSONAL FINANCE

Student Debt Is Totally Canceled

Sen. Elizabeth Warren’s latest disruptive policy proposal as a 2020 presidential hopeful? Making student debt as canceled as Kanye.

Warren’s idea:

• Forgive $50,000 in student loans for Americans in households earning under $100,000/year (about 95% of the 45 million Americans with student debt), and partially cancel student loans for anyone making up to $250K.
• She’d also axe tuition and fees for public colleges and expand Pell grants for lower-income students.

Warren’s camp estimates the plan would cost $1.25 trillion over a decade. The funding would come from her proposed $2.75 trillion Ultra-Millionaire Tax (a 2% annual tax on families with north of $50 million in wealth and an additional 1% tax on wealth above $1 billion).

Zoom out: U.S. student debt climbed past $1.5 trillion last year, more than doubling in a decade and keeping millennials from doing adult things like buying homes. But Warren’s plan puts her to the left of some others in the ballooning Democratic field who seek more moderate approaches to tackling the problem.

+ This looks like a geological formation, but it actually shows how student loan debt's grown as a share of total non-housing debt.

MEDIA

Podcasting, You’re All Grown Up

Seems like just yesterday we were watching an infant podcasting industry fiddling around on its training mics. Now, it’s getting a buzzy paid subscription model courtesy of Luminary, a startup that launches its service today. They grow up at 2x speed .

Luminary, flush with $100 million in funding, wants to sell you an $8/month subscription to deliver exclusive podcasts (aka they can’t be found anywhere else). It’s planning to eventually roll out more than 40 ad-free shows, which include the sonorous tones of Guy Raz (of How I Built This fame), Lena Dunham, Trevor Noah, and other future first-ballot Podcasting Hall of Famers.

There’s plenty of skepticism:

• While ads on podcasts are annoying, it might be hard to convince listeners to pay for content they’re used to enjoying for free.
• Luminary also has a free service, but that lacks popular podcasts including the NYT’s The Daily and shows from Gimlet Media, owned by Spotify.

Ask the audience: Are you a bear or a bull on Luminary? Vote here and we’ll share the results tomorrow.

WHAT ELSE IS BREWING

• Samsung is delaying the release of its Galaxy Fold phone after some reviewers reported broken screens.
• Herman Cain asked President Trump not to nominate him for a seat on the Federal Reserve Board.
• Beyond Meat, the plant-based food startup that wants to take humans...beyond meat, plans to raise $184 million in its IPO.
• Sinclair Broadcasting (-2.34%) is reportedly the favorite to buy a package of regional sports networks from Disney after a $10 billion bid.
• Abigail Disney, an activist and heiress whose name gives it away, over the weekend called Disney CEO Bob Iger’s $65.5 million compensation “insane.”

BREAKROOM

Final Jeopardy
This one's dedicated to James Holzhauer, who is on a jaw-dropping run on the show right now. If you're not watching, start tuning in.

Breakroom Answers