Sincerely, Jeff

MARKETS

• U.S. markets: Stocks were mixed on a day when the Fed released its Beige Book business survey (tl;dr: economy's good, tariffs aren't). A horrible day for IBM (-7.54%) anchored the Dow.
• Oil: U.S. WTI crude hit a three-year high, responding to shrinking U.S. stockpiles. We could see prices exceed $70 at some point.
• Earnings today: BNY Mellon, Philip Morris, Novartis, The Blackstone Group.

AVIATION

Apparently Jet Engines Get Tired, Too

After a passenger died following a chaotic (and live-streamed) Southwest Airlines (+2.86%) emergency landing on Tuesday, we're in full-on debrief mode about what exactly happened.

And it looks like "metal fatigue" might have a lot to do with it.

• Cracks forming on an engine's fan blades could have caused the 737-700's left engine to explode, sending shrapnel through a window and depressurizing the cabin. The victim was nearly sucked out of the window before other passengers reeled her back in.
• There are 24 fan blades in the engine. When investigators took a first glance, one of the blades was snapped off.

And it all comes back to the CFM56-7B engine.

The CFM56-7B? I feel like I've seen that before...

If you've looked out of a plane window recently, odds are you have.

• It's one of the most popular engines in the industry, especially among single-aisle Boeing and Airbus jets (the planes you take on most domestic flights). Per the WSJ, a plane with a CFM56 engine takes off every two seconds.
• It's the handiwork of CFM International, a joint venture between GE and Safran Aircraft Engines.
• It's been in some trouble before. In 2016, a CFM56 engine failed on another Southwest flight, although no one was hurt.

Still, flying commercially in the U.S. is remarkably safe...

...and that shouldn't change. Tuesday marked the first fatality on a U.S. airline in almost a decade. But to make sure that track record remains squeaky clean, Southwest is starting enhanced inspections across its fleet of more than 700 planes. United is taking a look, too.

And finally, know this name: Tammie Jo Shults, the pilot who successfully landed the plane in Philadelphia. If you listen to the audio from the cockpit, Captain Shults calmly discusses the situation with Air Traffic Control, all while maintaining "nerves of steel," according to one passenger.

Turns out, that's what you learn as one of the first female fighter pilots in the Navy.

RETAIL

Amazon’s Best Deal for Best Buy

Amazon (+1.60%) and Best Buy (+3.64%) are on fire. Sorry—that came out wrong. Amazon and Best Buy are teaming up to sell Amazon Fire TV-powered television sets. There we go.

They're putting their differences aside to offer 11 different models from Toshiba and Insignia, Best Buy's private-label brand. But the TVs won't just be sold on Amazon.com. You can also fill up your shopping cart at your local Best Buy.

Amazon's angle here: The showroom appeal of "see it, touch it, smell it" hasn't gone the way of the antenna yet. And harnessing Best Buy's in-person sales force could mean more Alexa in more living rooms.

Because here's a surprise: Bezos might have the smart speaker market cornered, but Fire-TV has been a giant dumpster fire. At least, compared to Roku. In 2014, Roku began licensing its operating software to TV manufacturers. The result? As of last year, 1-in-5 TVs ran its software.

But Amazon's...Amazon. It already has 190 providers (think Netflix, Hulu) synced with its Fire-TV software, and on the very announcement of the deal, Roku stock dropped 11%.

ECONOMY

The Global Economy Is Working on Its Credit Score

Whatever debt you've got, we assure you, the global economy can top it. The International Monetary Fund (IMF) said worldwide debt totaled $164 trillion—coming in higher than financial crisis levels.

The culprits: Japan, the U.S., and China accounted for half of the debt. Our bad.

The IMF singled out the U.S.

• It's the only country not actively trying to lower debt levels.
• The $1.5 trillion tax cut and $300 billion spending bill will only exacerbate problems come the inevitable recession.

Quick trivia: For the world's advanced economies, the only time debt levels have been higher was...any guesses? That's right, WWII, when debt reached 124.1% of GDP.

The IMF says: If the U.S. keeps this up, by 2023 debt-to-GDP levels could hit 117%, sliding it just behind Japan (230%).

REGULATION

Facebook Readies for Its Second Regulation Showdown

If Zuckerberg's testimony last week was the warm-up round, then May 25 will be the main event. The EU is officially cutting the ribbon on General Data Protection Regulation (GDPR). This massive data privacy overhaul is specifically tailored to protect European consumers' information.

And leading up to the event, Facebook (-1.36%) released a preview of what to expect:

• More personalized settings to choose which data you share with Facebook.
• Asking users whether they want their data shared with advertisers.
• Greater transparency around its facial recognition technology. Facebook scans pictures and uses AI to more easily tag your pics. It'll be much easier to opt out of this.

Regulation 101: (Take notes, Congress). These are just a few of Facebook's updates. And, it has rallied its largest cross-functional team ever just to comply with GDPR.

So how's the EU holding them accountable? Simple. Failure to adhere to the rules could cost Facebook 4% of its previous year's global revenue in fines. Seriously—take notes, Congress.

WHAT ELSE IS BREWING

• Time Warner (-0.32%) CEO Jeff Bewkes defended a potential merger with AT&T (-0.40%) in court.
• A casualty of the crusade against bump stocks: manufacturer Slide Fire is shutting down operations May 20.
• California is investigating worker protections at Tesla's (+1.97%) Fremont auto plant.
• The New York Times interviewed Marissa Mayer.
• An Ernst & Young partner brought a sexual harassment claim against the firm, alleging she was assaulted by a male colleague in 2015.
• President Trump spoke about North Korea at a joint presser with Japanese Prime Minister Shinzo Abe.

WATER COOLER

FROM THE CREW

From our office, to your inbox. We’ll keep you in-the-know about all the latest happenings from our perspective.

We've got another nickname for Jeff Bezos: "the Bard."

In his annual letter to shareholders, Bezos displayed some nifty writing chops to complement his sterling reputation as a businessman (hey Jeff, we got a writing spot open...).

Without further adieu, here are some highlights from the letter...which we're going to make Alexa read to us every night 'till next year:

• On innovation: "We didn't ascend from our hunter-gatherer days by being satisfied. People have a voracious appetite for a better way, and yesterday's ‘wow' quickly becomes today's ‘ordinary'."
• On a culture of high standards: "A culture of high standards is protective of all the "invisible" but crucial work that goes on in every company. I'm talking about the work that no one sees. The work that gets done when no one is watching. In a high standards culture, doing that work well is its own reward—it's part of what it means to be a professional."

And a few company milestones...

• It topped 100 million paid Prime members around the world.
• Hardware sales reached an all-time high in 2017.
• Amazon Web Services is a $20 billion revenue run rate business.

For a mic drop, we'll end this story the way Bezos ends his annual letters: it's still Day 1.

THE BREAKROOM

SIP ON THIS

Rob Gronkowski purchased a minority stake in Gronk, the $400,000 racing horse competing in the Kentucky Derby. Gronk told Belichick he wants to bring him in for training camp, but we think the horse would be a better fit on the Colts.

TALK LIKE THE CREW
Expense Ratio—The annual fee ETFs and funds charge their shareholders each year, expressed as a percentage. It reflects the costs associated with operating and managing each fund. When investing in funds, you always want to pay close attention to the expense ratio as it'll affect your overall returns.

BRAIN TEASER
Takashi took part in a marathon race. At half-time, he is 6th last. After that, he is overtaken by three more contestants, but then he overtook 10 in a row, getting himself the bronze medal (3rd place).

How many contestants were there in total?

(Answer located at bottom of newsletter)

Breakroom Answers