Robot revolution
MARKETS
- U.S. markets: Stocks fell across the board as concerns over a trade war with China continued to grow...
- And in China: The Shanghai Composite dipped to its lowest level since 2014. More on the trade dilemma below.
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TRADE
President Trump’s Tariffs: The Ins and Outs
After a summer-long preview of a Mayweather/Pacquiao-level brawl between the world's two biggest economies, President Trump has again ramped up the trade war with China.
Here's what happened
Last night, Trump announced a 10% tariff on $200 billion in Chinese goods set to take effect next Monday. The kicker? That rate will more than double to 25% on the first day of 2019. Time will tell if it's the New Year's hangover cure the U.S. economy is hoping for.
- The reasoning: Trump's camp is reportedly waiting until 1/1/19 to give American businesses a chance to find alternative supply chains before the year's up.
Wondering how Beijing feels about all this? Not great. It's vowed before to retaliate against U.S. farmers and other industries. And if it does...Trump said he'll immediately go after more tariffs on $267 billion in Chinese imports.
Trump's take
"We have been very clear about the type of changes that need to be made, and we have given China every opportunity to treat us more fairly. But, so far, China has been unwilling to change its practices," the president said.
What's being taxed?
After a public comment period, about 300 products were removed from the tariff list the Trump administration initially targeted back in July, including smart watches, Bluetooth devices, bicycle helmets, high chairs, children's car seats, playpens, and some industrial chemicals, to name a few.
- No items were added. But, thousands of goods will be affected and it could raise prices for electronics, housewares, food, tools, and more.
Is it too late to say sorry? Not sure yet. China had previously said it would turn down new trade negotiations if Trump went ahead with the tariffs.
The bigger picture
Remember: The U.S. already imposed 25% tariffs on $50 billion in Chinese goods earlier this summer (with China hitting back). The new round brings the total for Chinese imports subject to tariffs to roughly half the value of all goods China shipped to the U.S. last year.
FOOD & BEVERAGE
Coca-Cola Eyes Cannabis
Coca-Cola's reportedly in "serious talks" with Canada's Aurora Cannabis to launch CBD-infused drinks, per BNN Bloomberg.
What's CBD, you ask? It's the nickname for cannabidiol, a non-psychoactive chemical found in marijuana plants...aka it won't get you high, but it might just be the new "it drug."
- Coke (+0.72%) is reportedly interested in developing CBD-infused recovery/wellness beverages to ease inflammation, pain, and cramping (hear that, Pepsi-owned Gatorade?).
So is it legal? Kinda, but the laws are iffy. Many industry experts say as long as your CBD product contains less than 0.3% THC (the chemical in marijuana that does get you high), you're good.
And the business potential? The Hemp Business Journal estimated that the consumer CBD market will explode to $2.1 billion by 2020, up from just $202 million back in 2015.
Coke's non-statement: "We are closely watching the growth of non-psychoactive CBD as an ingredient in functional wellness beverages around the world," a spokesman said.
INTERNATIONAL
What’s Saudi Arabia up to These Days?
Quite a lot, it turns out.
First up, an $11 billion loan
The country's heavyweight sovereign wealth fund, known as PIF, is gathering loans to help cover funds (~$100 billion worth) it had been counting on from the now-stalled IPO of oil titan Aramco.
The specs: PIF signed an $11 billion syndicated loan from banks, and it's discussing selling a 70% stake in state-owned Aramco for ~$70 billion.
Zoom out: The Saudi government has hiked borrowing to more than $50 billion in the last three or so years.
- But keep in mind, with consolidated government debt of ~14% its GDP, it's still got one of the world's smallest government debt loads, per Fitch Ratings.
Plus, it struck a major investment
PIF said that $11 billion loan was bigger than it expected due to strong interest from lenders. Maybe that's because PIF has flexed some serious muscle sourcing deals. You might recognize some of these names...
The latest of those deals? PIF just invested more than $1 billion in California-based Lucid Motors, an electric vehicle startup. Call it another step toward diversifying Saudi Arabia's oil-heavy economy.
HEALTH CARE
DOJ Greenlights Cigna/Express Scripts Deal
The Justice Department has approved Cigna's $52 billion purchase of Express Scripts. The deal's set to be inked by the end of the year.
Cigna (+1.40%) is a health insurer. Express Scripts (+3.71%) is a pharmacy benefit manager (PBM). Putting the two together, the companies argued, means better care and lower costs for patients.
- But remember, not everyone gave his blessing. Activist investor Carl Icahn spent the summer urging shareholders to reject the deal...but they approved it last month.
Zoom out: The merger comes as the health care space faces mounting pressure from everyone's favorite disruptor, Amazon, which will jump into health through a joint venture with fellow heavyweights JPMorgan and Berkshire Hathaway.
There's also plenty of health-focused scrutiny coming out of Washington
President Trump tweeted yesterday in favor of prohibiting "gag clauses."
Raise your hand if you're not sure what a gag clause is. Okay, here it goes...they're orders from PBMs preventing pharmacists from telling patients when paying out-of-pocket may cost less than relying on insurance.
FUTURE OF JOBS
When You Watch Robots Do This...
..it's not that hard to imagine a future when AI replaces millions of jobs across industries—not just GoPro influencers.
And thanks to new research from the World Economic Forum, we can put this anxiety to the test. Condensing a 147-page report into 60 words...
- Machines and algorithms could displace 75 million jobs by 2022...but demand for new tasks might create 133 million over the same time period. That's 58 million net new jobs (happy to report we didn't need AI to do that math).
- The most urgent challenges include..."providing reskilling opportunities, enabling remote work and building safety nets to protect at-risk workers and communities."
Bottom line: A robot jobs apocalypse is preventable, as long as businesses are proactive.
+ Bonus infographic, because...why not?
TECH
Headline of the Day
Per CNBC, some of these devices could be announced later this month. One thing is clear: Amazon (-0.79% after hours) wants Alexa to be your go-to voice assistant...whether you're hanging out in the kitchen or the car.
WHAT ELSE IS BREWING
- DowDuPont (+0.35%) CEO Edward Breen will take over as executive chair of soon-to-be-formed DuPont when the company splits into three separate entities.
- Oracle shares dropped as much as 5% after hours on news that it fell short of revenue expectations for the quarter. Its cloud services unit was a disappointment.
- Macy's (-3.06%) supplier Sunham Home Fashions is under scrutiny in Texas. The alleged crime? Marketing sheets as having a 1,400-thread count when they actually had a 505-thread count.
- Elon Musk is being sued for at least $75,000 by the rescue diver he called a "pedo guy" and a "child rapist" earlier in the summer.
- Tyson Foods (-0.54%) CEO Tom Hayes will step down from his role at the end of the month for personal reasons.
- The 70th Primetime Emmys saw an on-air proposal, a big night for streamers Netflix and Amazon, and a heartfelt tribute to those Hollywood's lost this year.
BREAKROOM
Brain Teaser
What common English word has the letters "WSP," in that order, without any letters between?
(Answer located at bottom of newsletter)
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Breakroom Answers
Brain Teaser
Newspaper (via Braingle)
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Repudiandae vitae officiis sunt. Molestias quia odio necessitatibus rem quisquam necessitatibus. Aspernatur repellat molestiae voluptatem voluptatibus molestiae nesciunt nihil nam.
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