Spoofed

MARKETS

• Global economy: Economic activity in China slowed (again) in August. The real tortoise was industrial production, which grew at its weakest clip in 17.5 years.
• U.S. markets: Pair that with a surge in oil prices and the Dow snapped an eight-day winning streak.

MISC

News Stories Age Like a Fine Argentinian Malbec

The news cycle moves at lightning speed, but some stories stand the test of time. Here are updates on three humdingers of headlines from the past few days.

Oil disruptions

Energy markets went wild following a weekend drone attack on a major Saudi Aramco facility. Brent crude futures, the global benchmark for oil, rose as much as 19.5% in a record-setting day.

• But prices settled on a 15% gain, possibly because traders remembered there's a lot of extra oil sloshing around the world right now.

Still, gas prices in the U.S. could increase 10–25 cents in the next few weeks, according to OANDA analyst Ed Moya. That’s not great timing. A rise could hamper U.S. consumer spending, the economy’s brightest light.

Aramco itself is in damage control: Execs for the state-owned oil giant are reportedly debating whether to delay plans to go public until after it gets production back on track—which could take weeks.

GM workers walk out

About 46,000 GM (-4.25%) employees who are members of United Auto Workers (UAW) walked off the job 11:59pm Sunday night in the union’s first nationwide work stoppage since 2007. The strike impacted 52 facilities in nine states.

• With no cars rolling off the lines, GM’s daily earnings losses could hit at least $50 million, per Credit Suisse.
• The UAW’s sitting on $850 million in its strike fund and will pay strikers $250/week.

A UAW negotiator told Bloomberg they’ve only settled 2% of about 1,000 outstanding proposals with GM, so...don’t hold your breath.
Purdues and don’ts

On Sunday, OxyContin-maker Purdue Pharma officially filed for Chapter 11 bankruptcy in New York as part of its settlement plan to resolve the 2,000+ lawsuits currently filed against the company and its owners, the Sackler family.

The company will be passed off to a trust controlled by the many states, cities, counties, and intergalactic colonies currently suing Purdue over its alleged role in the opioid crisis.

TECH

Is That a PSL in Your Pocket, or a New Phone?

Fall means three things...pumpkin spice lattes, cringey jokes about pumpkin spice lattes, and new tech hardware. All your favorite tech giants are coming out with new tiny computers to stare at during your commute.

From Axios’s useful breakdown…

• Google said yesterday it will debut "a few new things" (probably hardware) at an event on Oct. 15 in New York. You might’ve already seen a leaked version of the Pixel 4, but this will likely be the official close-up.
• Apple’s newest iPhones and Watch hit stores this Friday, but expect more shiny things from Cupertino next month.
• Microsoft has a Surface event planned for Oct. 2. It might unveil a new Harry Potter character dual-screen device codenamed “Centaurus.”
• Facebook promised additions to its Portal line at Code Conference back in June. One possibility? A TV set-top version.
• Amazon’s event is right around the corner. Judging by the past, we’re likely to get new Echo- and Fire-related gizmos next Wednesday.

Zoom out: Axios reminds us that demand for tiny computers has waned over privacy concerns and spending-$1,000-for-a-phone concerns.

BIZ LAW

JPMorgan Turns Up the Racket

U.S. prosecutors have charged a group of bigwigs at JPMorgan’s (-0.87%) precious metals desk with “conspiracy to conduct the affairs of an enterprise involved in interstate or foreign commerce through a pattern of racketeering activity.”

Running that through Brewgle Translate...the traders allegedly manipulated prices of metals like gold, silver, platinum, and palladium from 2008–2016 using a technique called “spoofing.”

What’s spoofing? It’s when traders make buy and sell orders for precious metals futures contracts with zero intention of actually executing the orders...but with every intention of influencing prices in their favor.

This spoofing is more serious than its name implies, though. Those charged this week allegedly generated millions in trading profits for themselves and Mother Morgan while triggering millions in losses for customers.

And prosecutors’ decision to characterize the alleged price fixing as a “criminal” enterprise within JPM puts it under scrutiny typically reserved for organized crime rings. As Bloomberg points out, that could mean JPM—one of the world’s largest gold traders—is at risk of broader legal trouble.

MUSIC

Madonna’s Shiny and New Pricing Strategy

Today, Madonna—Queen of Pop and Protector of On-Stage PDA—kicks off her 11th tour, “Madame X.” And the ticket price changes this time around are...material.

Madonna’s new strategy: play smaller venues and charge more for tickets, the WSJ reports. But that’s the kind of market power you earn when you hold the record for highest-grossing concert tour for a woman.

• Madame X tickets average about $300, up from about $160 for Madonna’s last tour.
• The uptick is due primarily to a price hike for upper-tier tickets. The priciest non-VIP Madonna tickets go for about $750 this time around before fees, compared to $350 during her last three tours.

Zoom out: The digitization of music has put pressure on margins. If you’re Madonna, you try smaller venues and lengthier trips in certain cities. If you’re Taylor Swift or Jay-Z, you raise prices. If you’re Ed Sheeran, you just play...more.

STARTUP

Checkout Lines May Trigo the Way of the Dodo

Welcome to Venture This, where we toss out a startup generating buzz...then ask: would you invest?

The only thing worse than forgetting your parka before heading to the ice cream aisle is watching your ice cream melt while you wait in the checkout line.

That’s why Israeli tech startup Trigo is trying to jumpstart cashierless grocery store tech. And it just raised $22 million to bring that tech to the U.S. and Europe.

Trigo’s plan: provide grocers with cameras, 3D computer vision, and cloud computing to track what customers take from shelves. It’s already inked a deal with Tesco, the U.K.’s largest grocery chain.

• One downside? Trigo’s piloting in stores ≤ 5,000 sq. ft. For context, the average Trader Joe’s is closer to 20,000 sq. ft. and the average Trader Joe’s checkout line can reach 40,000 ft.

The big picture: Call this the Amazon Go effect, seeing as Bezos may open up to 3,000 checkout-free stores in the U.S. alone. Other chains are increasingly looking to automation to employ fewer people and trim costs.

Now, we open the floor to you, Brewemmer Venture Partners. Would you invest in Trigo’s next round? Let us know here.

WHAT ELSE IS BREWING

• The We Company, parent of WeWork, is likely delaying its IPO until October at the earliest, reports the WSJ.
• Sen. Elizabeth Warren won a key endorsement from the Working Families Party, a progressive group.
• Amazon (-1.71%) has allegedly manipulated its search algorithm to prioritize listings that are most profitable for the company, per the WSJ.
• Netflix (+0.05%) may have lost the streaming rights to The Office and Friends, but yada yada yada...it said it’s bringing all 180 episodes of Seinfeld to the platform in 2021.
• Blackstone (-0.06%) is reportedly in advanced talks to buy (then lease back) the Bellagio and MGM Grand casinos in Las Vegas. Can’t wait for Stephen Schwarzman’s residency.

BREAKROOM

Guess the Logo
No image today, just a series of interesting facts about a specific logo that will help direct you to the right answer.

• This tech company is named after a colorful 10th century Danish king.
• This king managed to unite people in both Denmark and Norway, similar to how this company’s technology allows devices to communicate wirelessly.
• The logo is the combination of the king’s initials, “H” and “B,” in an ancient alphabet.

Breakroom Answers