- Jackson Hole: What better way to spend a relaxing late-summer Friday than to watch Fed Chair Jerome Powell's big speech at the Jackson Hole symposium?
- U.S. markets: As the U.S. and China slapped more tariffs on each other, stocks ended lower.
- Housing: Surprise! New home sales unexpectedly fell to a nine-month low in July.
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Trump Says Impeachment Would Be Disaster for Markets
"If I ever got impeached, I think the market would crash. I think everybody would be very poor," President Trump said on Fox & Friends yesterday.
An interesting comment from the president...
- FYI: Many analysts think Trump's safe in the Oval Office barring evidence from the special counsel investigation directly implicating him in alleged Russian collusion during the 2016 election.
But it makes us wonder: does he have a point about the stock market? Well, there's no denying that during (as well as before) Trump's tenure, the market has been on a great run.
- The S&P 500 has risen at an annualized rate of 20% since Election Day (the annual historical return since 1927 is just 9.4%).
- Trump-era yearly market returns are about 1 percentage point higher than those during the Obama administration.
What are the experts saying?
Impeachment could mean speedbumps, as Trump suggested, but not the kind that tear off your front fender...or make everybody "very poor":
- "If an impeachment did happen, we'd experience volatility and perhaps a significant selloff, but I believe any such market moves would be short-term in nature," said Kristina Hooper, chief global market strategist at Invesco, to Bloomberg.
Others think the markets would throw a house party:
- "If Donald Trump resigned tomorrow I think the Dow would go up 1,000 points," said Jeremy Siegel, Wharton School finance professor, to CNBC last year.
And here are a few more takes:
- Some say a Trump impeachment would mute the threat of the ongoing trade war with China. But don't discount investors' uncertainty of what a Pence-led White House would mean for markets.
- An alternative view says it doesn't matter who's in the Oval Office--all that matters is the resiliency of the economy and the strength of corporate earnings.
We could look to history...but it's not a very good teacher
1974: When impeachment proceedings began for Richard Nixon, stocks were already in a bear market and the oil crisis was upon us. No surprise that the S&P 500 slumped ~30% through the fall of that year.
1998: When the House voted to impeach Bill Clinton, stocks continued to ride the internet boom higher for several more months.
WeWork's Taking Over NYC
WeWork is just one lease away from becoming the biggest private office tenant in Manhattan.
All the shared workspace startup needs to do is sign one more lease for ~74,000 square feet (which is the typical size of a WeWork space) to beat out JPMorgan, currently the largest Manhattan tenant.
WeWork has 57 locations throughout New York City--a footprint that represents ~3% of all office space in the Big Apple. Oh, and it's only been around for eight years.
Zoom out: You can thank WeWork for the free cold brew and comfy new couches in your non-WeWork office, too. According to Cushman & Wakefield, coworking spots like WeWork have upped the ante for more traditional landlords. After all, some dense markets could see coworking space make up 5% to 10% of office inventory in the near future.
For Tech Platforms, the Purge Continues
Google (-0.05%) has uncovered a coordinated misinformation (read: fake news) attack connected to Iran's state media on a number of its platforms.
No, you don't have deja vu. Just this week, Facebook and Twitter disclosed similar misinformation campaigns related to Iran on their own platforms. But Google was the first to find a direct link to the country's state media.
So what's the damage over at Google? It terminated 39 YouTube channels, six blogs, and 13 Google+ accounts associated with the misinformation campaign.
- Digging deeper: Facebook said it deleted 652 accounts, groups, and pages earlier this week after finding they were linked to fake news campaigns stemming from both Iran and Russia. Twitter axed 284 accounts (many from Iran) for similar reasons.
Bottom line: Midterms are just 74 days away. The big dogs of Silicon Valley are working overtime to wipe out "bad actors" looking to influence U.S. elections and abuse social platforms.
+ One company that's benefitting? Cybersecurity firm FireEye, which has helped tech companies spot trouble. Shares shot up about 6% yesterday.
Here Are Your Q2 Earnings Superlatives
Earnings season is just about over, so it's time to award our senior superlatives to some Q2 standouts. Without further ado...
Most changed since freshman year--Retail
- A strong economy and stellar consumer confidence helped retailers (like Target and Walmart) snag impressive sales growth...and prove the "Amazon Effect" isn't necessarily fatal.
Class clown--Scotts Miracle-Gro
- CEO Jim Hagedorn hasn't been known to hold back, even on conference calls: "And, dude, those bastards [at subsidiary Hawthorne Gardening] are gun-shy as s-- right now, OK...I'm just telling you real-time, living my life."
Biggest teacher's pet--Tesla
- Tesla CEO Elon Musk apologized for some harsh comments aimed at analysts back in Q1. "There's no excuse," Musk said. Aww.
Most likely to go cliff diving--Facebook
- Even Harvard kids can go a little crazy sometimes. Facebook stock plummeted 24% on a revenue miss and news of an expected slowdown in growth.
P&G Wants to Trademark Your Favorite Texting Acronyms
Procter & Gamble (-0.18%) has applied to trademark a handful of all your favorite acronyms (LOL, WTF, FML, and NBD) to use on soaps and dishwashing detergents.
If you're wondering wtf P&G is thinking, it's the conglomerate's latest bid to attract the important but hard-to-reach millennial age group. One way to sell hard surface cleaners to young shoppers? Incorporate the lingo they use all the time.
Remember: This should come as nbd for anyone who followed activist investor Nelson Peltz's ascent to the P&G board earlier this year.
- Peltz lobbied the consumer packaged goods company for months to do more to attract younger shoppers. According to Peltz, they're more likely to buy things when they feel "emotional attachment."
The Brew's Weekly News Quiz
Hope you've been paying attention...
- Name the company: I make countertop devices that carbonate drinks. I was just bought by PepsiCo for $3.2 billion. I am based in Israel.
- Which country has the largest sovereign wealth fund in the world?
a) UAE b) Norway c) United States d) China
- Which upcoming event did British politicians call "sickening," "disgraceful," and "in bad taste"?
- Fill in the blank: IBM filed a patent for a system using drones, cameras, and biometric sensors to deliver ______.
- What does this symbol represent?
- This week, the animals on the package of Nabisco's animal crackers were finally set free from their cages. Do you remember the name of Nabisco's parent company?
- Speed round: This week's question is in honor of an Eagles "Greatest Hits" album passing Michael Jackson's "Thriller" as the No. 1 best-selling album of all time. So gather up a few co-workers, set the timer to :60, and...name every Michael Jackson song you can think of (house rules: you can include the Jackson 5).
Answers: 1) SodaStream 2) Norway 3) Lehman Brothers reunion 4) coffee 5) the petro 6) Mondelez 7) You're on your own
WHAT ELSE IS BREWING
- Kroger (+1.80%) said it's eliminating single-use plastic bags from its 2,800 locations by 2025.
- David Pecker, chairman of National Enquirer publisher American Media Inc., was granted federal immunity in the case against former Trump lawyer Michael Cohen.
- Sears (-5.93%) will close another 46 locations in November.
- Eventbrite will raise up to $200 million in a planned IPO on the New York Stock Exchange.
- Earnings roundup: L Brands (-13.21%), the parent company of Victoria's Secret, slumped to a seven-year low after reporting weaker demand for lingerie. Alibaba (-3.16%) grew sales 61%, but missed Wall St. expectations.
LET US PLAN YOUR WEEKEND
- Read: Give People Money by Annie Lowrey. This book is your best bet for understanding the heated (and relevant) debate around universal basic income.
- Listen: The Freakonomics Radio episode, "How to Be Happy." You'll travel to Denmark to learn why Nordic countries dominate the U.N.'s World Happiness Report.
- Watch: Two very different movies. "Minding the Gap" is an emotional documentary (on Hulu and in theaters) about three young skateboarders. And "To All the Boys I've Loved Before" on Netflix is "The Breakfast Club" for a new generation.
Okay, this one is admittedly on the zanier side...but it could be useful as a party trick one day: Take six different letters. Repeat them in the same order. Then repeat them again--making 18 letters altogether. Finally add "tebasket" at the end. If you have the right letters and you space them appropriately, you'll complete a sentence. What is it?
(Answer located at bottom of newsletter)
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H-E-R-W-A-S. The sentence is: "Her washer was her wastebasket" (h/t Will Shortz).
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