Mar 16, 2017 - Morning Brew Daily


Car makers will adapt to everything" - Nissan turnaround legend Carlos Ghosn commenting on the potential NAFTA changes and globalization challenges like Brexit and #MAGA.



Market Snapshot

  • The Fed raised interest rates as expected, providing the U.S. market with a sizeable boost on Wednesday. The energy, real estate, and utilities sectors led gains in the S&P 500
  • Oil bounced back following data revealing a drop in U.S. crude stockpiles, which analysts use as an estimator of the global oil supply. After a seven-day decline in the price of oil, the good news drove shares of energy stocks in the S&P up 2.1%
Yahoo Finally Has Answers

After news of its massive Verizon deal broke, headlines haven't been so nice for the troubled internet giant. It all could be coming to an end soon, though. Yesterday, U.S. officials announced four suspects in the hack, Bloomberg reports. One has already been arrested in Canada, and the other three are believed to be in Russia. Here's a brief timeline of the largest internet security breach ever reported:

  • 2013-2014: Hackers steal data from over 1 billion Yahoo accounts.
  • July 2016: Verizon agrees to buy Yahoo for $4.8 billion; 200 million Yahoo logins appear on a black market internet forum.
  • September 2016: The security breaches are first reported; Six senators send a strongly worded letter to CEO Marissa Mayer.
  • December 2016: Yahoo officially discloses two other breaches.
  • February 2017: Verizon lowers its offer by $350 million, to about $4.45 billion, and extends deadline beyond the original March 2017 date.
  • March 2017: Marissa Meyer takes a $14 million pay cut as retribution for the hacks; Yahoo legal chief resigns.
  • Yesterday: Justice Department says the four suspects will face 47 criminal charges including conspiracy, computer fraud, and identity theft.

What's Next? Despite her pay cuts, Marissa Meyer will still get a $23 million parachute as she leaves. But she may never be fully finished with Yahoo: Over 20 lawsuits have been filed, and two are scheduled to be heard this month in California and New York. The Verizon deal is expected to close by the end of June…for now. Stay tuned!

The Votes Are In

…The rates shall be hiked. Yesterday, the Federal Reserve voted to raise interest rates, nudging the benchmark rate up to a range between .75% and 1%. The U.S. economy has been chugging right along lately, so raising rates helps ward off the risk of inflation. Plus, there's more where this came from: the Fed anticipates a few more hikes within the next two years as the economy keeps heating up. In the words of Fed Chair Janet Yellen, "The simple message is the economy is doing well." We'll take it.

Automakers Rejoicing

...Environmentalists mourning. Trump visited Motown, announcing his plans to roll back strict fuel economy standards put in place by the Obama administration. The rules were initially created to reduce foreign oil dependence and CO2 pollution, but in a classic tradeoff between business and environment, they would come at a whopping $200 billion cost to the industry. What does this mean for the auto industry moving forward? Yes, a stronger bottom line, but also an IOU to the Don, who is expected to push automakers to increase domestic investment and add manufacturing jobs. Guess nothing comes free.

The Geese Are Out

...And PETA's on the case. Luxury parka-maker Canada Goose is set to go public today. Although investors are excited (this is the first luxury-goods IPO in the past three years), PETA intends to be the first in line––and the group's not looking for a financial return. PETA's plan? Buy the minimum shares it needs in order to be a part of the annual shareholder meeting, where the group can then propose that the company stop using goose feathers and coyote fur. This is not their first rodeo, as PETA has already bought into luxury brands Hermes and Louis Vuitton with similar intent.

What Else Is Happening…

  • Trump's most recent travel ban was put on hold in Hawaii after Airbnb, Twitter, Lyft and 54 other companies voiced opposition
  • #DeleteUber worked, and Lyft cashed in
  • Vibrator maker is accused of spying on customers' ...personal... data
  • McDonald's will launch mobile ordering in 14,000 restaurants this month
Economic Calendar

  • Wednesday: Oracle (+) Earnings; Consumer Price Index (+/-); Retail Sales (-); Fed Rate Announcement
  • Today: Audi, Adobe, Lufthansa, Dollar General Earnings; Weekly Jobless Claims; Housing Starts
  • Tomorrow (Friday): Progressive, Tiffany Earnings; Consumer Sentiment; Industrial Production


$44 Billion in Unused Gift Cards Since 2008

You read that right––$44 billion, with a "b". A study from CardHub estimated an astounding $44 billion in unredeemed gift card value that has accumulated since 2008. That's more than the GDP of Ghana, currently sitting in people's drawers just waiting to be spent. Before turning your room upside down, give this a read::

  • Where is all this gift card money coming from? Like most retail sales, the holiday season. 80% of shoppers said they were going to buy gift cards this last holiday season, totaling over $118 billion in spending.
  • This equates to roughly each holiday shopper spending $163 each on gift cards. That's a 4% increase from the previous year. Looks like people aren't getting the memo that gift cards don't get used.
  • Companies are taking note at least: startups like Zeek offer a market in which people can sell their old gift cards for discounts of up to 25%. The company advertises that 90% of gift cards on the site sell within 24 hours.
  • So go searching for your old gift cards––they're probably still worth something. A law passed in 2009 ruled that gift cards should not expire less than 5 years after they were issued.


Interview Question of the Day

Can you guess the average bonus size on Wall Street last year? (Answer)

Video of the Day

Nissan CEO Carlos Ghosn has been at the helm for 18 years and is credited with reviving the car company. After 18 years, what's the one thing he's learned never to do? Lose his cool. Check out more from this interesting man here.

Food for Thought

Members of Donald Trump's cabinet are obliged to sell more than $1 billion worth of assets to prevent conflicts of interest. A Wall Street Journal review of those obligatory sales shows almost three-quarters of the total is held in illiquid assets such as real estate, closely held companies and stakes in private-equity funds, likely extending the time necessary to unwind the positions.

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