Economic (soul) cycle


"I've never seen the speed of change as it is today. If I could go back 10 years, I might have done some things earlier." - Millard "Mickey" Drexler, the 72-year-old CEO of J.Crew, looking back on the fashion chain's fall from grace.



Market Snapshot

  • Stocks reached fresh highs Wednesday, with the S&P 500 and Dow rising for the fifth straight day, the longest winning streak for both indexes since February.
  • Treasury yields and the dollar both fell after new Federal Reserve minutes showed confidence in the economy and muted inflation, despite recent signals of a slowdown.
  • Want Morning Brew Daily Served Fresh to Your Inbox?
    Drop Your Email Below...

How to Make a Pele-Ton of Money

Would you pay $1,995 for a stationary bike? How about another $39 per month for streaming uptempo workouts in your living room?

It sounds crazy right? But 100,000 people have already clipped in for a subscription to Peleton, a vertically integrated, technology-first company (that makes a souped up stationary bike).

And, you better believe investors have taken notice.

The New York-based company's latest $325 million funding round (and likely the last before an IPO) values the boutique fitness startup at $1.25 billion, making it one of 12 companies to reach unicorn-status in April.

Investors range from money managers to media conglomerates, but there is one common thread––a peloton of exec-level cycling enthusiasts.

But seriously…$1,995 for a bike?

Perhaps it makes sense, though. Perhaps our precious Peloton is riding fitness' perfect storm (in third position, of course). Let's take a look.

Health and fitness is a fast-growing market, that is expected to rake in over $30 billion by 2020. At the same time, fitness enthusiasts are only becoming more obsessive, endlessly searching (with fifty fitness fads in the way) for that truly effective yet efficient, community-creating workout.

And Peloton, under Team Leader John Foley, may have struck gold (to the tune of $170 million in revenue).

Like Netflix for fitness, the stationary sensation has given its 100,000+ riders access to 4,000+ quality cardio classes and a tight-knit community, while providing the convenience of consuming content where and when they want.

This is not the time for Peloton to rest on its laurels

Between SoulCycle, who pump faked on an IPO, but still did $99 million of revenue in 9 months, and FlyWheel, who just last week announced an at-home spin bike and video streaming service (sound familiar?), Peloton has a long road ahead if it wants to pedal its way to victory.

China's Credit Crunch

For the first time in almost three decades, Moody's (+0.14%) downgraded China's sovereign credit rating on Wednesday by one notch, from A1 to Aa3 (a major hit to steaks everywhere), over fears that the country can't pay off its debts while maintaining economic growth.

China's growth has been faster than almost every other country in the world. 6.9% last quarter (annualized) to be exact. But with total outstanding credit worth 260% of its GDP that just might not cut it.

Watch Out, Gillette

Here comes Schick. It's no secret that razors can shave dollars off your budget, but online subscriptions have been trying to change that (God bless you Dollar Shave Club and Harry's).

Yesterday, Schick got its digital act together and launched its own subscription service to get in on the shave frenzy. It's great news for our faces, but bad news for Gillette's. Schick's blades will work in any razor...even Gillette's.

It seems like the second largest razor brand in the U.S. is ready to draw blades for space on your face.

Chips and Dip

Nvidia's (+1.12%) shares have surged 202% this year-higher than any other stock in the S&P 500-and Softbank's taking notice.

The Japanese telecom giant dipped into its $100 billion tech fund, and secured itself a $4 billion stake in the California-based chip maker.

Why, you ask?

Self-driving cars. Nvidia's graphic processor units (aka GPU's) are crucial to autonomy-put simply, they're your eyes and ears on the road.

Much of Nvidia's growth has come from supplying Google, which now plans to make its own units. But Nvidia isn't worried: its CEO fired back with a witty blog post abot Nvidia's faster tech.

What Else Is Happening…

  • Minutes from the Fed's May meeting give details about how it plans to shrink its $4.5 trillion balance sheet
  • American Eagle (+2.26%) is reportedly working with a private equity firm to bid for Abercrombie & Fitch (+5.66%)
  • Serena Williams is replacing HPE (+0.32%) boss Meg Whitman on SurveyMonkey's board
  • Volvo's Chinese owner bought a controlling stake in British sports car maker Lotus
Economic Calendar

  • Monday: Booz Allen Hamilton (+) Earnings; National Activity Index (+)
  • Tuesday: Autozone (-/+), Toll Brothers (+), DSW (+), Container Store (+) Earnings; New Home Sales (-), Manufacturing Index (-)
  • Wednesday: Lowe's (-), Tiffany & Co. (-), Advance Auto Parts (-), Williams-Sonoma (+) Earnings; FOMC Minutes, Existing Home Sales (-)
  • Thursday: Best Buy, Abercrombie & Fitch, TD Bank, Gamestop, Nutanix Earnings; Weekly Jobless Claims, Consumer Comfort, Fed Balance Sheet, Money Supply
  • Friday: Big Lots Earnings; GDP, Consumer Sentiment


For Watches, What's Old Is New Again

The luxury watch market is in flux. Records are being broken every day (especially by Rolex), but auction houses aren't what they used to be. The world's foremost timepiece enthusiasts (AKA some very rich folk) converged on Geneva last week at the height of auction season for Switzerland's famous industry. Here's what you need to know:

  • In just three days, four auction houses netted a whopping total of $62.6 million. This is especially good for the industry, which saw exports fall 10% last year, the first drop since the financial crisis.
  • Times may change, but some things stay the same. Of the 1,271 watches for sale, only 230 were from the 21st century. Call us old fashioned.
  • Sotheby's (+2.18%), one of the most famous auction houses, had a rough week. Its sales were down 17%, while competitor Phillips fared the best.


Interview Question of the Day

A zookeeper was asked how many camels and ostriches were in the zoo.

The zookeeper answered: "Among the animals there are 60 eyes and 86 feet."

How many of each kind of animal were there? (Answer)

Startup of the Day

A fully decentralized web, where files aren't beholden to a single server or provider, is the Richard Hendricks' moonshot in HBO's Silicon Valley. Sure, the technology is a long way away. But New York-based Blockstack says it's en route to do just that by using the 'card catalog method.' Unfortunately, it's way more complicated than we can fit in this short blurb.

Stat of the Day

$11.5 Million-that's the median pay for CEO's this year, a 9% increase over last year.

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

Start Discussion

Popular Content See all

IB Sucks. I'm out
+104IBby 1st Year Analyst in Investment Banking - Generalist">Analyst 1 in IB - Gen
IB is not intellectually challenging
+54IBby Intern in Investment Banking - Mergers and Acquisitions">Intern in IB-M&A
Janet Yellen - Unrealized Capital Gains Tax. WTF
+27OFFby 1st Year Analyst in Investment Banking - Generalist">Analyst 1 in IB - Gen
VP Lying
+24IBby Prospective Monkey in Investment Banking - Mergers and Acquisitions">Prospect in IB-M&A

Total Avg Compensation

January 2021 Investment Banking

  • Director/MD (9) $911
  • Vice President (31) $349
  • Associates (141) $232
  • 2nd Year Analyst (89) $151
  • 3rd+ Year Analyst (19) $150
  • Intern/Summer Associate (91) $144
  • 1st Year Analyst (351) $132
  • Intern/Summer Analyst (299) $82

Leaderboard See all

LonLonMilk's picture
Jamoldo's picture
Secyh62's picture
CompBanker's picture
redever's picture
frgna's picture
Addinator's picture
NuckFuts's picture
bolo up's picture
bolo up
Edifice's picture