Endgame

MARKETS

• U.S. markets: Stocks closed at record highs Tuesday. They did not do that on Wednesday...thanks to some mixed earnings weighing down the big indexes.

MEDIA

Is There a Movie Coming Out Tonight?

Monoculture (n.): A culture dominated by a single element; a prevailing culture marked by homogeneity.

Media insiders like to say there exist no more monocultural events outside of sports and Game of Thrones. But the levels of hype surrounding tonight’s release of Avengers: Endgame show that this jolly gang of superheroes still dominates the global consciousness like no other.

At the Brew, we like to measure hype in $$$$

• Deadline estimates domestic ticket sales could brush up against $140 million...before the movie comes out tonight.
• There’s a chance Endgame could rake in close to $1 billion globally this weekend. When the movie opened in China yesterday, it posted an opening day record of $107.2 million in ticket sales.
• Over a dozen AMC locations will be open 96 hours straight because there's so much demand. Q: How much movie theater soda is acceptable to consume during a 7:30am showing?

And just when you thought we couldn’t have it all...the reviews are glowing.

Zooming out on Disney’s MCU

Endgame is the final chapter in a run of 22 movies in the Marvel Cinematic Universe (MCU), starting with Iron Man in 2008. Collectively they’ve earned $18.6 billion at the box office and smashed one Hollywood record after the other.

But as much of a slam dunk as it seems now, the MCU was originally a risky, experimental play. The NYT sets the scene:

• “Marvel’s prosperous future was hardly a certainty a decade or so ago.”
• “In the mid-2000s it was a smaller, inexperienced company that controlled the film rights for only a few of its lesser-known characters...at a time when no one in Hollywood was yet contemplating the idea of an interconnected universe of superhero movies.”

That interconnected universe of superhero movies is culminating this weekend in the cinematic event of the decade. And it’s up to Disney to make sure the monoculture doesn’t stop there.

TECH

Facebook's Doing Just Fine

Emphasis on the fine. Facebook (+7.7% after hours) divulged in its earnings report yesterday that it’s earmarked $3 billion to pay an expected Federal Trade Commission fine over privacy issues.

• The FTC launched a probe into FB following the Cambridge Analytica scandal.
• The “matter remains unresolved,” but the final charge could be up to $5 billion.

That cut into FB’s profits, which totaled $2.4 billion on revenue of $15.1 billion. While Zuck’s top line number jumped 26% annually, earnings shrank and missed estimates. If not for the $3 billion set aside for the FTC, Facebook would’ve easily topped profit estimates.

Still, Zuck’s underlying business is doing...fine. Across its family of apps, Facebook tallied 2.7 billion monthly users and raked in an average of $6.42 in revenue per user, up 16% from a year ago.

Bottom line: Facebook is staring down an avalanche of scandals and international probes. But Zuck is like the Energizer Bunny—no matter how many memes we make of him, he just keeps winning ad dollars and adding users.

AVIATION

Boeing Gives Up

The company opened its books for the first time since last month’s Ethiopian Airlines disaster, which a) marked the second deadly crash of Boeing’s 737 Max in five months and b) exposed safety practices that worried some aviation experts. There was significant financial damage as Boeing (+0.36%) tried to contain a growing crisis:

1. Boeing missed earnings estimates for only the second time in five years. Q1 revenue fell 2%. Pair that with the growing costs of lawsuits and investigations, pilot training, and a delayed software update, and you get core earnings of $3.16/share, down 13% annually.
2. Widespread groundings of the 737 Max cost Boeing. Its commercial airplanes segment suffered a $1 billion decline in revenue without the bestseller shipping
3. Boeing is abandoning its forecast for the rest of the year. The guidance it previously issued “does not reflect 737 Max impacts,” Boeing said. “New guidance will be issued at a future date” because of “uncertainty of timing and conditions.”

ENERGY

One Big Energy Deal, Endless Clichés

Earlier this month, Chevron (-3.04%) inked a deal to buy Anadarko Petroleum (+11.58%) for $33 billion, putting primo access to the lucrative Permian Basin within Chevron’s reach. We knew then that rival Occidental Petroleum (-0.56%) had previously pitched a deal to Anadarko...

But yesterday, things got serious. Occidental unveiled a new $38 billion takeover bid for Anadarko. Now, we’re left wondering a) who will dominate the U.S.’ most productive oil field and b) how many clichés can we use to describe one potential bidding war?

1. It’s David versus Goliath. Chevron is four times the size of Occidental. But Occidental slid quite the deal across the table, promising about 17% more for Anadarko than Chevron did.
2. Persistence is key. Occidental first started courting Anadarko in July 2017 and just made its fourth bid. But Anadarko is head-over-heels for Chevron’s international influence.
3. Don’t count your chickens. It’s not clear if Chevron will sweeten the deal (and spark a bidding war). But Anadarko would have to pay a $1 billion breakup fee if things with Chevron fell apart.

AUTO

How Many Automakers Does It Take to Change an Industry?

Some things in life are best accomplished solo, like meditation or climbing El Capitan. For other tasks, such as building electric vehicles, you need all the help you can get.

That’s why Ford (+0.74%) is investing $500 million in electric truck startup Rivian. Because even though Ford’s already committed $11 billion to electric vehicles, the transition to battery-powered cars is so darn expensive that it nearly demands automakers team up with one another to get the job done.

To kick off the partnership, the two will co-develop an electric pickup truck. What will Rivian bring to the assembly line?

• Rivian knows that a truck is only as cool as the canoe you stick on the roof. So it’s building some electric trucks with outdoor adventures in mind—a range of 400 miles per charge and off-road capabilities.
• But think more Patagonia glamping than Bangkok backpacker hostel. Rivian’s pickup truck and SUV will likely start at $68,000 each, putting them in competition with models from Porsche and Tesla.

Speaking of which...Tesla (+0.41% after hours) reported a wider-than-expected adjusted loss and missed revenue forecasts for the first quarter.

WHAT ELSE IS BREWING

• Microsoft (+4.7% after hours) revenue grew 14% last quarter as its critical cloud business continued to rack up new customers. Plus, it got an unexpected assist from Windows.
• NBCUniversal has reportedly had “internal discussions” about removing The Office from Netflix (-2.01%) when its contract expires in 2021, per the WSJ.
• Walmart (+0.45%) is developing its own supply chain for Angus beef at about 500 of its stores, cutting meat processors out of the equation.
• Venmo has 40 million users, according to parent PayPal (+0.3%). Why does it feel like every single one of them requests money from us?

BREAKROOM

MCU After the Colon
When you have as many sequels as Marvel, you gotta get creative with the subtitles (aka those dramatic flourishes after the colon in the film’s title). So here’s the challenge: We’ll give you the subtitle, you have to determine the name that precedes it in the movie title.

Ex. Infinity War --> Avengers

1. The Dark World
2. Homecoming
3. Age of Ultron
4. Civil War
5. Ragnarok

Breakroom Answers