It's March Madness all over again

MARKETS

• U.S. markets: The Dow shed about 100 points as bank stocks fell following...you guessed it, a Fed rate hike (keep reading for more on that).
• Trade: The U.S. is expected to release a new trade deal with Mexico as soon as tomorrow. It might allow Canada to join at a later date...but President Trump said yesterday he rejected a meeting with Canadian PM Justin Trudeau on trade this week.

BIZ IN D.C.

D.C. Takes Center Stage

Washington, D.C. may be over 200 miles (and a $192 Amtrak ticket) away from NYC...but sometimes? It definitely outshines the Big Apple in influencing the business world. Here's the latest from the nation's capital.

The Fed yanks interest rates higher

We hope you weren't getting too wild playing Fed Bingo to catch the news: the FOMC hiked the benchmark interest rate for the third time this year.

• Remember: The Fed is in charge of controlling the country's money supply. And it does that in part by tinkering with the rate at which other banks can lend to each other overnight (called the "federal funds rate"). Everything from employment to the prices of goods and services is affected.

Here's what Fed Chair Jerome Powell had to say...

• On the economy: "Growth is running at a healthy clip. Unemployment is low, the number of people working is rising steadily, and wages are up."
• On trade: "We've been hearing a rising chorus of concerns from businesses all over the country..." but if you look at the economy on aggregate, "it's hard to see much happening at this point."

Looking ahead: The Fed wants to strike the tricky balance of keeping the economy from growing too fast, but not killing growth altogether by raising rates too quickly. We'd put money on one more hike in December and three in 2019.

Plus...the Kavanaugh hearing could slow markets

What do March Madness, Black Friday, and today (when Brett Kavanaugh and Christine Blasey Ford are scheduled to testify on Capitol Hill) have in common? They're all slow days for stock traders.

We'll explain. Two weeks ago, Ford went public with allegations of sexual assault against Kavanaugh, the Supreme Court nominee, from the 1980s (he's denied the claims).

But with all eyes glued to C-SPAN today, prep yourself for typically-manic traders to shift focus.

• "Markets are going to be...watching this reality TV show play out, rather than looking at the monitors wondering if the euro can move higher and break out here," Weeden's Michael Purves told Bloomberg.

If history's any indication...more than 20 million watched Anita Hill's Senate testimony in 1991, when she alleged now-Justice Clarence Thomas sexually harassed her.

CRYPTO

Bitmain Opens Its Books

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With bitcoin stuck below $7,000 and the Coinbase app stuck on the ninth page of your phone, we were due for some big crypto news. And our wishes were granted: Bitmain, the Chinese crypto goliath, is prepping to IPO in Hong Kong.

What does Bitmain do? It sells and operates mining equipment. No, not excavators, crushers, and drills...but the powerful chips that allow crypto miners to do their jobs: solve really hard math problems to verify digital currency transactions.

The public disclosure is also a rare opportunity to look at the financials of a crypto giant. Here's what's inside:

• Revenue came in at $2.8 billion for the first six months of 2018. Profit over the same time span was $742 million. Those are about 10x and 9x increases YoY, respectively.
• Mining hardware sales accounted for 94% of its revenues.

Zoom out: Bitmain isn't the first crypto mining firm to prep a Hong Kong IPO (that would be rivals Canaan Inc. and Ebang). But dominating 85% of the market for crypto mining chips, it would be the largest...by far.

MEDIA

Fox Agrees to Sell Sky Stake to Comcast

If you're going to lose, $15+ billion for the silver medal doesn't hurt. That's what 21st Century Fox (+1.02%) will get for its 39% stake in European broadcaster Sky when it sells it to Comcast (-0.09%).

Remember: Comcast and Fox had been locked in a battle royale for Sky, a London-based broadcaster. Over the weekend, though, Comcast outbid Fox for the grand prize.

• One more recap for the people in the back: Sky sells TV/phone/internet services to 23 million European households, plus it produces its own news, entertainment, and sports content.
• Translation, with an assist from C.S. Lewis: Sky is the wardrobe transporting Comcast into a Narnia of international expansion.

So when Comcast claimed the W, Disney (which agreed to acquire Fox assets in a separate deal earlier this year) allowed Fox to let go of the 39% stake in Sky it already owned pre-bidding war.

Why that makes Disney's the happiest c-suite on earth: "The transaction...will significantly reduce the amount of debt Disney will incur in acquiring [Fox], and enable Disney to maintain its strong balance sheet as it continues to invest in content creation for its direct-to-consumer platforms."

IPO

SurveyMonkey: The Latest IPO to…

Using its official name SVMK Inc. (and trading under the no-nonsense, consonant-heavy ticker "SVMK"), SurveyMonkey made its Nasdaq debut yesterday. Did it:

A) Trade mostly flat

B) Soar as much as 60%

C) Jump at the bell, then trade lower

D) Drop ~10% immediately

If you responded B, congrats! You've won yourself a lifetime supply of free Morning Brew newsletters. (Btw, SVMK shares surged about 42% by the close.)

In listing 15 million shares priced at $12 each, SurveyMonkey raised ~$180 million in its IPO...but as the NYT put it, "Question marks still hang over SurveyMonkey's business." While it reported more than 16 million active users last year, only about 3.8% of those users actually paid for the service.

Unanswered questions aside, SurveyMonkey's bullish listing continues a trend of strong IPOs heading into the home stretch of 2018. In the past two weeks alone...

• Farfetch (a luxury online retailer) finished 42% higher the day of its $855 million IPO.
• Eventbrite (a ticketing company) gained 59% on its first day on the public markets.

TRAVEL

Before You Look at This Chart, We’ll Need to See Your Passport

Each week, the Brew is partnering with the infographic wizards at Statista to visualize the most interesting stories happening in business and the economy.

Happy World Tourism Day! Let's recap some tourism trends from last year, per the World Tourism Organization:

• It was the highest growth for int'l tourist arrivals in seven years, up 7% to 1.32 billion. Total receipts? Up 5% to $1.34 trillion.
• What drove the growth: A strong global economy and higher demand in emerging markets, like Brazil and Russia.

Now, we're going to show you a fun chart on tourism, but before you look, give yourself 60 seconds to ponder: What are the 10 most Instagrammed landmarks in the world?

Okay, you can look.

SPORTS

Thursday Night Football Is Tired of Being the NFL’s Black Sheep

Last Thursday, the Cleveland Browns won their first game in 635 days (#prayfortheBudLightfridges). And this week's game between the Vikings and the Rams should also be special...

1. It marks the beginning of Amazon's (+0.02%) NFL streaming deal this season (it'll stream 11 total games through December 13 to Prime members).
2. One streaming option will feature veteran sports journalists Hannah Storm and Andrea Kremer in the booth. It's the first time in the league's history that an all-woman broadcast team will cover an NFL game.
3. The other choices from Amazon? You can listen to Joe Buck and Troy Aikman, catch it in Spanish, or enjoy it with U.K. commentators.

What about the broadcast TV option? Fox just signed a 5-year deal with the NFL for the rights to Thursday Night Football. And it wasn't cheap...the package is worth over $3 billion.

Should be a fun game—we'll certainly be watching.

Via @Andrea_Kremer

WHAT ELSE IS BREWING

• Papa John's (+8.50%) founder and ex-chairman, John Schnatter, has reportedly reached out to PE firms to assist him in buying the company, per CNBC.
• Facebook (+1.24%) announced a new standalone VR headset called the Quest. It retails for $399 and is set to drop this coming spring.
• Uber will pay $148 million in connection with its 2016 data breach scandal and the cover-up that followed.
• Bed Bath & Beyond swung and missed on earnings and revenue estimates, sending shares down 15% after hours. Same-store sales dropped for the sixth straight quarter.
• Stripe, the fast-growing payments startup, is now worth $20 billion. What comes after decacorn again?
• Yale University is being investigated over potentially discriminating against Asian-American applicants.

BREAKROOM

From the Crew
We've received a few requests to use some newsletter real estate to explain confusing, not-at-all-obvious acronyms that may appear in the Brew. So let's start off with one especially relevant for today: the FOMC.

The FOMC stands for the Federal Open Market Committee. Composed of 12 members, it's the unit of the Federal Reserve System that makes monetary policy decisions (like the one from yesterday).

Brain Teaser
A tennis championship is played on a knock-out basis (i.e. a player is out of the tournament when he or she loses a match).

(a) How many players participate in the tournament if 63 matches in total are played?

(b) How many matches are played in the tournament if 28 players in total participate?

(Answer located at bottom of newsletter)

Breakroom Answers

Brain Teaser
Brain Teaser: (a) If 63 matches are played in total, then 64 players participate in the tournament.
(b) If 28 players participate in the tournament, then 27 matches are played in total.
(Explanation)