Musk's big reveal
- Energy: Oil prices plunged again Tuesday, falling to a more than 15-month low. The U.S. and Russia pumping at record levels isn't helping prices.
- Housing: Single-family housing starts fell more than 13% annually last month. Plus, homebuilder sentiment is at the lowest point in three years. We wish we had better news...
- Economy: With a rate hike (probably) being announced today, we're wearing our lucky Fed socks.
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Musk the Multitasker
Boring Co., you're up first
Elon Musk revealed a "proof of concept" underground tunnel at an event in Hawthorne, CA last night, offering rides to VIPs sadly not named Morning Brew. Funny enough, it's been almost exactly two years to the day since Musk fired off the tweet that sparked the creation of the Boring Co.
A lot has happened since. Musk has made progress on his vision of a transportation system utilizing autonomous electric vehicles to whisk passengers from place to place at speeds of up to 155 mph. Current projects include...
- Dugout Loop: A plan to shuttle baseball fans between LA neighborhoods and Dodger Stadium.
- The Chicago Express Loop: This route will take you between downtown Chicago and O'Hare International Airport.
- A third project in LA was scrapped following opposition from neighborhood groups.
Okay, SpaceX...your turn
Musk's rocket company is set to raise $500 million at a $30.5 billion valuation, reports the WSJ.
- Who's taking part: Existing investors plus newbie Baillie Gifford & Co., a big Scottish money manager (which owns a ~7.6% stake in Tesla).
The $500 million is earmarked for a project called Starlink. It won't fund the entire project (which could cost more than $10 billion), but...wait. What is Starlink again? Well, the goal is to deploy 11,000+ satellites to deliver cheap high-speed internet access across the globe.
And wrapping it all up...a little controversy
Another WSJ scoop revealed some SpaceX investors (including Peter Thiel's Founders Fund) are reportedly "alarmed" that Musk has been using rocket company resources...for tunnel company projects.
Bloomberg's Matt Levine weighs in:
- "At a normal (public) company...there'd be a special committee of independent directors to vote on whether to devote corporate resources to the chief executive officer's personal side project..."
- "At SpaceX, the CEO just told employees to dig a tunnel for him, and they got digging."
Jerome Powell's Horoscope
The Federal Reserve is set to give its last update of the year today, but what will Chairman Jerome Powell say? Let's take a peek into our crystal ball-which, admittedly, is really murky.
Set the scene: The Fed's main tool to 1) maximize employment and 2) monitor inflation is tinkering with interest rates...but lately, it's been cornered by a worse-for-wear stock market and attacks from the White House.
- Rising interest rates can be tough for smaller companies with lots of debt. But holding off on a hike could spook investors into thinking the economy's on the brink.
So what are the experts saying?
- In one corner, Investing.com's Darrell Delamaide: "It cannot now forgo an interest rate hike at the meeting...because it would then look like Trump had bulldozed the policymakers into submission."
- In the other, the WSJ's editorial board: "Follow the signals that suggest a prudent pause in raising rates."
Still, the market is putting the odds of a rate increase today close to 70%. The real question is whether Powell will signal a slowdown in hikes after the New Year.
Stats That Make You Go: 'What the…???'
- Less than $1: Blue Apron's share price after another bad day (down 10.28%). Not much has gone right for the meal kit company since it went public in June 2017-actually, warning signs emerged just before its IPO when Amazon announced its plan to buy Whole Foods. Blue Apron's been losing customers and watching its share price decline ever since.
- Every 30 seconds: How often female journalists and politicians were abused on Twitter in 2017, per Amnesty International and Element AI. The researchers write that "Twitter's failure to effectively tackle violence and abuse on the platform has a chilling effect on freedom of expression online and undermines women's mobilisation for equality and justice."
- More than $3.6 billion: How much the South Korean boy band BTS is worth to the country's economy every year (equivalent to 26 mid-sized companies), according to the Hyundai Research Institute. BTS is also the reason 1 in 13 foreign visitors traveled to South Korea in 2017. With music videos like these...we kinda get the hype.
The Man Behind Netflix's Movie Ambitions
Why? Because having achieved excellence on the small screen (112 Emmy nominations in 2018), Netflix (+3.10%) is moving to dominate the silver screen. Stuber's leading that charge, making him one of the most influential execs in the industry.
All roads lead to "Roma"
The highly acclaimed film is generating serious Oscars buzz. We haven't seen it yet, mainly due to a unique distribution plan Stuber advocated:
- Netflix released "Roma" in movie theaters exclusively for one to three weeks before it became available to stream on the platform.
- Stuber to the NYT: "In a world where consumer choice is driving everything...we're trying to get to a place where consumers have theatrical viewing as a choice."
The big question: What role do theaters play in a world where Netflix has major pull in the film industry?
+ While we're here: Peter Jackson's Mortal Engines bombed at the box office last weekend, and it could end up losing more than $100 million.
The Blue Checkmark of Pot Partnerships
What's better than getting verified on Twitter? Getting verified by a respected pharma company.
Well...if you're Tilray (+16.10%). The marijuana firm inked a global partnership with a division of Novartis (-0.43%), the Swiss drug giant. Remember, Tilray was the first pure-play cannabis company to IPO on a U.S. exchange.
Xs and Os: Tilray's working with Novartis's generic drug business Sandoz to increase availability of medical marijuana globally (and grow an existing tie-in with Sandoz Canada).
- On the to-do list? Boost Tilray's non-smokable weed options, co-brand products, develop new items, and work with pharmacists and physicians on education.
Like a blue checkmark, but better: "If a product comes into a pharmacy with the Sandoz logo co-branded on it...it lends credibility to that product," Tilray CEO Brendan Kennedy told Bloomberg.
Bottom line: Tilray gets some much-needed supply chain logistics, sales know-how, and global distribution insights...while Novartis gets a "hedge" against the growing threat marijuana poses to old-school drugmakers.
WHAT ELSE IS BREWING
- Facebook's (+2.48%) internal documents show it gave tech giants (including Microsoft, Spotify, and Amazon) more access to user data than it previously disclosed, per a NYT report.
- The DOJ is banning bump stocks, the firearm attachments that allow semiautomatic rifles to fire almost as rapidly as fully automatic machine guns (one was used in the 2017 Las Vegas massacre).
- FedEx cut its earnings guidance and watched its stock fall more than 6% after hours. Slowing global trade is taking a toll on its international business.
- Tesla (-3.27%) global sales head Dan Kim is leaving the company for Airbnb, per multiple reports.
- ExxonMobil (-2.76%) filed a letter with the EPA supporting methane gas emissions standards put in place under the Obama administration. Trump's team has proposed weakening them.
- Spirit (+0.71%)-the airline everyone loves to hate-is currently ranked No. 1 for on-time arrivals.
Guess the Logo
Okay, so maybe we aren't asking you to "guess" this logo...considering that we're giving you the name of the institution. Instead, we're here to admire a clever design that includes not just a tree, but also a gorilla and a lion. Can you see the animals?