See you in health

MARKETS

  • Markets: The Dow posted its biggest single-day jump since April. Strong earnings from Walmart (more below) and a little optimism on the China trade front propelled stocks.
  • We'll clarify: Beijing announced it accepted an invitation from the U.S. to revisit trade talks later this month. Asian stocks weren't quite feeling it—they still closed lower.

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HEALTH

Take Three Health Stories and Call Us in the Morning

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Let's start with Teva Pharmaceuticals (+7.31%), which received some good news heading into the weekend: the FDA approved its generic competitor to the EpiPen (the emergency allergy treatment made by Mylan).

Quick vocab break: Per the FDA, a "generic" drug is one that's the same as its brand name counterpart in safety, strength, how it's taken, quality, and other metrics. Think ibuprofen and Advil.

There's some important history here:

  • In 2016, the FDA rejected Teva's generic version, partly because the medicine is what's known as a "complex generic," involving both a drug and a device.
  • But prices for the EpiPen skyrocketed to above $600 (for a two-pack), the public took Mylan to task, and the FDA committed to offering a smoother pathway to approval. You know, for competition's sake.

Next, President Trump took on opioid makers

In a cabinet meeting, he called on AG Jeff Sessions to sue pharma companies that make the opioids contributing to the country's epidemic. And not only that, he asked the DOJ to look into fentanyl (a synthetic pain reliever) arriving from Mexico and China.

Remember: Dozens of states have already filed 1,000+ suits against companies like Purdue Pharma and Johnson & Johnson for understating the risk of these drugs in their marketing.

New data: The CDC estimates that 72,000 Americans died from drug overdoses in 2017, a record...and up ~10% from 2016.

And finally, NYU made medical school free for all

Yeah, you read that right. It's going to be free for all students, current and future, regardless of need or merit.

Why? America's best and brainiest are going into more lucrative fields (like banking) because skyrocketing tuition and enormous loan balances make med school less-than-attractive.

  • 72% of 2018 grads had debt from med school, with a median of $195,000 in loans.
  • More than 33% of med students also have loans from previous academic programs.

It had help: NYU raised more than $450 million of the ~$600 million it'll need to fund the free tuition (thanks in part to a $100 million donation from Home Depot's founder Kenneth Langone).

RETAIL

Have a Quarter, Walmart

Don't call it a comeback, but the world's biggest retailer just scored its strongest growth in more than a decade in Q2.

To the numbers:

  • Q2 revenue of $128.03 billion trounced expectations and grew 3.8% from last year.
  • Same-store sales in the U.S. climbed 4.5%, topping forecasts.

So, what's driving Walmart's (+9.33%) success? Robust sales in grocery and apparel (FYI, grocery sales rose the most in nine years). Hate to be a broken record, but strong consumer confidence, a booming economy, and low unemployment don't hurt, either. Walmart had its biggest quarterly gain in customer traffic in more than six years.

But what about that e-commerce threat...what's it called again? Amazon? Walmart's answer: online sales in the U.S. rocketed 40% higher in Q2. Looks like Walmart's investment in a new website and grocery delivery are paying off.

Instead of a champagne toast, Walmart boosted its outlook for sales and earnings through the rest of the year.

+ While we're here: Fellow retailer J.C. Penney is drowning in unsold inventory. Shares cratered 27% after it reported dismal financials and slashed forecasts. Nordstrom, on the other hand, blew Wall St. away in Q2.

ENERGY

Tech Leads the Pack on Clean Energy

Thanks to new research from Bloomberg NEF, we learned that corporations have already purchased 7.2GW (gigawatts) of clean energy globally this year. Which may sound completely meaningless...

...until you realize 2017's total (a record at the time) was 5.4GW.

And guess who's leading the pack? Facebook is the biggest corporate buyer so far in 2018.

  • One reason why: Back in July, it said it would partner with Pacific Power to run its Oregon data centers on 100% renewable energy.

Here's the best of the rest:
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Via BloombergNEF

TECH

Google Employees Sound Off on China Project

Google CEO Sundar Pichai's probably regretting putting that suggestion box outside his office right about now. About 1,000 employees signed a letter demanding more details on Google's possible effort to build a search engine in China that'd be censored by the government.

The employees' concern? "Currently we do not have the information required to make ethically-informed decisions about our work, our projects, and our employment."

  • Remember, Google pulled out of China eight years back to protest government hacking.

Google's semi-famous, unofficial motto is "Don't Be Evil." Some employees are concerned the project goes against that credo in giving in to China's demands.

  • Activism's nothing new at Google. It was just a couple months ago when thousands of Googlers protested its contract with the Pentagon. Worked then.

For perspective: Even if the China project's a go, the government hasn't approved it yet. And some Googlers don't mind the idea, saying that a return to China means giving the country's ~1.4 billion citizens better access to better information.

ENTERTAINMENT

Amazon: More Than Just a Pretty Retailer/Grocer/Cloud Provider

Amazon's (+0.21%) been quiet lately...too quiet. That's why we weren't surprised to learn it could be considering a deal that could do to movie theaters what its Whole Foods acquisition did to grocery stores.

Per Bloomberg, Amazon's in the running to acquire Landmark Theaters from Wagner/Cuban Cos. (yes, that Cuban).

  • Landmark? It's focused on independent/foreign films. It has 50+ (often highbrow) theaters in 27 markets. Think nibbling some farm-fresh burrata before enjoying your favorite French Expressionist animated short.

A deal could do more than prove Bezos is a movie buff. Remember, Amazon already has a film/TV studio and a music service. Snagging Landmark's physical locations could be its ticket to broader film distribution.

The coming attractions don't stop there, though. Reuters reported Amazon's also feeling out top European insurance firms to see if they'd consider pitching in on a UK price comparison website for insurance products.

QUIZ

The Brew’s Weekly News Quiz

  1. Fill in the blanks: _______ invested $375 million in ______, a healthcare startup.
  2. Acquisitions worth more than $540 billion were scuppered so far this year, per the FT. What does the word "scuppered" mean in this context?
  3. Name the company: I have a ~$180 billion stock portfolio. Last quarter, I increased my stake in Apple by 5%. I also bulked up on stocks in two of my favorite sectors for investing: airlines and banking.
  4. Which country is represented by the blue line?
  5. Picture

  6. Who said this? "Yesterday's events will push us to learn what we can from this tragedy so that we can help prevent it from ever happening again, at our airline or any other."
  7. What was podcast ad revenue in 2017?

    a. $314 million b. $623 million c. $990 million d. $1.3 billion

  8. Speed round: Gather up your team competition and set a timer to :60. It's time to show your co-workers you're the most worldly of all. The question? With the Turkish lira in the news this week...list every foreign currency you can think of (repeats, like the euro, only count as one point). Good luck!

Answers: 1) Alphabet and Oscar 2) "To defeat or put an end to" 3) Berkshire Hathaway 4) Iceland 5) Alaska Air Group CEO Brad Tilden 6) $314 million 7) You're on your own

WHAT ELSE IS BREWING

  • Nvidia beat earnings, but its stock fell more than 3% after hours because it lowered guidance for the year.
  • Best Buy (+0.71%) acquired health tech company GreatCall for $800 million.
  • Hershey (+0.03%) CFO Patricia Little will step down in 2019 after four years on the job.
  • Citigroup (+1.34%) was charged $10.5 million by the SEC on allegations employees engaged in unauthorized proprietary trading.
  • Chipotle (-4.41%) confirmed bacteria that forms when food's left out caused 647 people to get sick in Ohio last month.
  • Netflix (-1.21%) signed a deal with "black-ish" creator Kenya Barris to produce a new series.

BREAKROOM

LET US PLAN YOUR WEEKEND

  • Read: How to Change Your Mind by Michael Pollan. Pollan's known for his books on food, but his latest explores the fascinating new research around psychedelic drugs. He ended up taking LSD "for research." Go deep.
  • Listen: Well, listen to anything by Aretha Franklin (the "Queen of Soul") who died yesterday at age 76. We dug up this great track, perfect for Sunday groovin'.
  • Cook/watch: We're hooked on "Binging with Babish," a YouTube channel recreating dishes found in all your favorite movies and TV shows. In this video, he'll teach you how to make spinach puffs from The Emperor's New Groove.

BRAIN TEASER
Solve this one, and you're a real puzzler: Take a certain 7-letter word. Remove the first letter and you get a 6-letter synonym of that word. And the letter you removed is an abbreviation for the opposite of both words. What words are these? (via Will Shortz).

(Answer located at bottom of newsletter)

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Breakroom Answers


Brain Teaser
Factual --> Actual. The letter you take away is "F"

 

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