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MARKETS

• U.S. markets: The Dow decided to join the party, following the S&P and Nasdaq to its own record high yesterday. That’s the benchmark index’s first all-time high since mid-July.
• U.S. economy: Plan your fake sick day now—Fed Chair Jerome Powell will testify on the economy before Congress on Nov. 13.

ELECTIONS

Welcome to Seattle Where the Megadonors Donate

Today, the fine people of Seattle will take a break from making buffalo plaid look good to cast their ballots in local elections—elections so dramatic we nearly confused Seattle with Forks, WA.

What’s causing the drama: Big Business. This year, independent groups on the receiving end of hefty donations have spent $4.1 million on City Council elections, more than they spent in the last two decades of elections combined.

You can thank the usual suspects. Overall, tech donors have dished out well over $1 million on ballot initiative campaigns.

• Microsoft employees have spent double what they did in the 2015 election, with some 200 employees pitching in about $40,000.
• But Amazon employees—from rank-and-file to “you can call me Jeff”—have spent over 8x what they did in 2015. This year, employee and company contributions to City Council candidates via a local business organization hit $1.6 million.

What’s driving the change

After sitting out politics for decades, Amazon, Microsoft, and other large companies see Seattle at a crossroads.

• On one hand, it’s a beacon of progressivism home to a $15 minimum wage, abundant union support, and public campaign funding.
• On the other, it’s a bona fide company town home to plenty of people with pro-business leanings.

Today’s election highlights the divisions over what comes next. Some Council candidates have proposed taxes on corporations to fund programs that combat homelessness and soaring housing prices. Others, which Amazon has backed, promise more business-minded solutions.

Why it matters: All politics is local. And local regulations have the power to hamstring gigantic multinational companies. When Seattle councilmembers tried to implement a now-scrapped per-employee tax on big business in 2017, Amazon would’ve been out $10+ million per year.

CRYPTO

Bitcoin Gets Weirder Every Day

Back in late 2017 when bitcoin spiked to nearly $20,000 seemingly overnight, we felt like Ice-T trying to bag a perp: Was it Adam Smith’s ghost, or something more mischievous?

We’ll take something more mischievous. A new study in the Journal of Finance suggests 2017’s price surge was the doing of an unknown manipulator operating from a single account at Bitfinex, then the largest crypto exchange.

• The nitty-gritty: The study’s finance professor authors argue the so-called whale used a dollar-pegged cryptocurrency called tether to ratchet up demand for bitcoin when bitcoin fell below certain price thresholds. That misconduct may have led to this:

So who's the whale? Unclear, but the authors suggest Bitfinex execs were clued in.

• FYI, Bitfinex and Tether are run by the same people, and both are being investigated for alleged fraud.
• Bitfinex said the study “lacks academic rigor.”

Why it matters: You might remember that bitcoin’s premise from the get-go was decentralization. A singular entity wielding that much influence over prices undercuts that premise.

MARKETS

A Tweet That Makes You Go "Wow"

If you didn't read the tweet: On Sunday, the combined market value of all listed German companies was smaller than that of Apple and Microsoft.

+ Bonus stock market fact: According to Reuters, the median stock return of unprofitable U.S. companies holding IPOs this year is...

...wait for it...

0%.

LUXURY

Is Ferrari a Real Luxury Company?

We’ll find out soon. Yesterday, Ferrari announced a fashion collaboration with Giorgio Armani as part of the sports car maker’s quest to become a multidimensional luxury company.

That takes a certain level of brand equity, but Ferrari thinks it’s got the horsepower. The goal is for branded goods to contribute 10% of earnings before interest and tax in 7–10 years, primarily from three target categories...

• Apparel: Tapping Armani to luxury-fy its handbag and clothing lines
• Entertainment: Theme parks, museums, and driving experiences
• Luxury services: Fancy hotels and restaurants

And any good luxury brand knows that less is more. It’s why Morning Brew only offers phone wallets in one size, and it’s why Ferrari is cutting its number of licensing agreements by half and its product categories by 30%.

We have to end with the cars, right? If you’re wondering how many people actually buy Ferraris every quarter, the company reported it delivered 2,474 cars in Q3.

WHAT ELSE IS BREWING

• Uber’s third quarter beat expectations on the top and bottom lines, but losses topped $1 billion during the three months.
• Under Armour shares fell 18.9% a day after it confirmed a federal investigation into its accounting practices. Q3 earnings beat estimates, though.
• Apple is committing $2.5 billion to help CA’s housing crisis. Facebook and Google have each pledged $1 billion to the cause this year.
• McDonald’s chief people officer left the company just a day after CEO Steve Easterbrook was fired for inappropriate behavior.
• De Beers, the world’s biggest diamond producer, has reportedly cut diamond prices by about 5%.
  Boeing’s 737 Max will likely return to service in Europe during Q1 2020, an EU regulator said yesterday.

GUESS THE LOGO

A tech company just released a refreshed logo for its new internet browser. For 10 points, name the company. For 1 million points, name the browser.

Breakroom Answers