Congrats on 35th place

MARKETS

  • U.S. markets: The Dow topped 28,000 for the first time. Why does that number matter? It doesn’t. Also, the S&P extended its weekly winning streak to six.
  • U.S. economy: Retail sales rose 0.3% in October, pushed along by the Halloween trifecta of e-commerce, gas stations, and autos.

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INTERNET

Can I Interest You in Free Internet?

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If there’s one thing that’ll make you yearn for Brexit news, it’s British Labour Party leader Jeremy Corbyn announcing a plan to nationalize part of the digital infrastructure of phone carrier BT.

But yearn not. With elections slated for Dec. 12, the plan to give all consumers free fiber broadband within a decade became a major talking point in the U.K. yesterday.

Lay of the land

Britain’s mean download speed of 22.4 megabits per second put it in 35th place globally last year—not great, especially compared to other European countries. The current government acknowledges more investment is needed to better connect the rural parts of the U.K. to the internet.

But Corbyn is taking things up 22.4 notches with a proposal to provide free, full-fiber connectivity across the U.K.

  • “What was once a luxury is now an essential utility,” Corbyn said. “I think it’s too important to be left to the corporations. Only the government has the planning ability, economies of scale and ambition to take this on.”
  • The other side: Conservative Prime Minister Boris Johnson thinks the policy is a “crazed communist scheme.” And Chancellor of the Exchequer Sajid Javid quipped, “Labour are on track to beat their last manifesto record of using the word ‘free’ 39 times.”

How nationalization works

Labour would turn BT’s broadband operations and related units into a state-run company called British Broadband. Current BT shareholders would be compensated in government bonds, but analysts expect the assets to be undervalued during the transaction.

  • And when you build a great, big broadband network on your digital border, who pays for it? Big Tech. Labour plans to partially fund the $26 billion project with a tax on internet giants like Facebook, Amazon, and Google.

Zoom out: History is repeating itself. Labour governments went on a nationalizing spree after WWII, until Margaret Thatcher’s Conservative government went on a privatizing spree in the 1980s. Now, Corbyn and Labour want to nationalize the water companies, the postal service, and some railways.

Reality check: Labour is trailing in the polls and isn’t expected to gain much power in the election.

INVESTING

Hedge Funds: The Biggest Risk Is not Taking One

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With $3.2 billion in new holding value, Chinese e-commerce giant Alibaba was the top buy for hedge funds in Q3, according to Bloomberg. That’s surprising given the uncertainty around the U.S.-China trade war.

Break it down: Bloomberg sorted through the data hedge funds traditionally publish 45 days before the new year (today) to determine who’s investing and who’s not.

And we learned risk, not Freeman, is Stan Druckenmiller’s middle name. Uber was a popular buy with $2.2 billion in new holding value. FYI, Uber shares are down ~14% since last quarter.

  • Traditionally “safer” bets like Disney (down $1.4 billion in holding value) and Microsoft (down $1.7 billion) made Jillian Michaels proud.

Zoom out: FAANG stocks are still a faan favorite, but hedge funds also bet big on the broader market in Q3. The market-tracking SPDR S&P 500 ETF banked $2.3 billion in new holding value.

SOCIAL MEDIA

Twitter Changes Color Scheme to Gray

Things that sound simple in theory but are complicated in practice: being the big spoon, waxing, and Twitter’s ban on political advertisements.

When Twitter announced that ban last month, it earned wide praise mostly for not being Facebook, which still allows political ads. Yesterday, Twitter revealed fresh details...

What’s banned: “Content that references a candidate, political party, elected or appointed governmental official, election, referendum, ballot measure, legislation, regulation, directive, or judicial outcome.”

  • Twitter’s also limiting micro-targeting, or serving ads based on things like ZIP code or political affiliation, on issues-based ads related to civic engagement, the economy, etc.

Who’s banned: Candidates, parties, government officials, PACs, and political nonprofits. For-profit companies can run ads to raise awareness around issues, but those ads can’t advocate for specific political outcomes.

  • "Scientists say exercise is good for you" is fine.
  • "Vote for my law abolishing school and enshrining 24/7 recess"...not so much.

The line is fine. Twitter’s policy leaves room for interpretation defining ads for issues vs. ads for outcomes. And it doesn't do much to address disinformation.

HEALTHCARE

Trump Admin Wants Healthcare to Fight Fair

Raise your hand if you’ve had this experience: twist ankle → go to doctor → get told it’s probably fine but might have foot diarrhea → receive $4,372 bill.

Yesterday, the Trump administration said it plans to fix that by requiring hospitals to publicize the rates they negotiate with insurers.

  • Those rates have been the most closely guarded secret in the healthcare industry, aside from whether or not coffee is good for you.

If passed, the move would turn the industry upside down

The administration says disclosing the rates would generate competition among doctors and push prices down.

  • The administration also floated a rule that would force insurers to inform people about their estimated out-of-pocket costs prior to seeing a doctor or going to a hospital.

Zoom out: The 2020 election is at the next exit, and some of President Trump’s Democratic rivals are polling higher on the issue of healthcare.

Looking ahead...expect the industry to wage a legal fight.

MEDIA

The Future of Streaming Is on Your Phone

With two new competitors this month and two more in the on-deck circle, streaming feels like it’s reached a saturation point.

So...what’s next?

We’ve seen experiments in interactive content (Netflix’s Black Mirror: Bandersnatch, a choose-your-own-adventure movie) and virtual reality, but the next wave of streaming might happen on your phone.

The startup to watch: Quibi, short for “quick bites,” arrives in April under the leadership of former Disney Chairman Jeffrey Katzenberg and former HPE CEO Meg Whitman.

Users will pay $5/month for ad-supported streaming or $8/month for an ad-free version on Quibi’s app. The target audience? 18–35-year-olds who want a few minutes of entertainment while scarfing down Sweetgreen at their desks.

  • Each video will log around 10 minutes.
  • The confirmed list of creators includes heavyweights like Steven Spielberg, Queen Latifah, and Trevor Noah.

The goal: Katzenberg told Fortune that “five or 10 years from now, we’ll look back and go, ‘There was the era of movies, there was the era of television, and there’s the era of Quibi.’”

He’s not lacking confidence, and Quibi’s not lacking advertisers. Six months before launch, Quibi said it sold out all $150 million of its first-year ad inventory.

WHAT ELSE IS BREWING

  • T-Mobile CEO John Legere won’t take over WeWork’s top position, per CNBC. It was fun while it lasted. Plus…
  • WeWork is reportedly getting the wrong kind of attention from the SEC over how it approached financial rules ahead of its disastrous non-IPO.
  • The U.S. Supreme Court will hear a contentious copyright case pitting Google and Oracle against one another. Google petitioned SCOTUS to step in earlier this year.
  • Hulu is raising prices for its online cable TV package, Hulu Live, by $10 to $55/month.
  • The Oklahoma judge who ordered J&J to pay $572 million to address the state’s opioid crisis lowered that total bill by $107 million.

SATURDAY HEADLINES

Here are some Saturday Headlines to warm you up after a frigid week. We’ll give you three real headlines from the week and one we conjured out of thin air. Can you spot the fake?

  1. “JetBlue rolls out ‘Ok boomer’ promotion for $39 flights to Florida”
  2. “Two people diagnosed with pneumonic plague in China”
  3. “Twinkies cereal is now in the works”
  4. “What it takes to maintain the biggest hedges in the U.K.”

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Breakroom Answers


SATURDAY HEADLINES ANSWER
JetBlue is not currently offering an "Ok, boomer" promotion.

 

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