Star Wars

Quote of the Day

The strengthening in the near-term economic outlook increased the likelihood that a gradual upward trajectory of the federal-funds rate would be appropriate.”

The Fed minutes hinted at an impending uptick in interest rates. On the bright side, the economy is looking strong as ever.

Market Snapshot



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Bump Stocks Find Themselves in Crosshairs—Again

President Trump’s announcement re: exploring a bump stock ban sent gun enthusiasts running for the hills—to buy more bump stocks.

Refresher: A “bump fire stock” is a device that increases the rate of fire of a semi-automatic weapon to mimic a fully-automatic one. It’s what was used in last October’s Las Vegas massacre to kill 58 concert-goers from a 32nd-floor hotel window—the most fatal shooting in modern American history.

Under resumed pressure to regulate—following last week’s Parkland, FL high school shooting that left 17 dead—President Trump signed a memorandum directing AG Jeff Sessions to determine whether or not the devices are illegal. And if so, institute a ban. Trump expects “that these critical regulations will be finalized…very soon.”

Gun owners wasted no time flocking to sites like Slide Fire, a manufacturer of the device, and crashing it. And auction site Gun Broker found bump stock prices quickly…bump up. One auction for $399.99 (vs. retail price of less than $200) included a description of “get them while you can guys.” Other listings ranged from just over retail price to $1,000. Bump stock prices also rose after Las Vegas.

What hasn’t risen? Gun sales.

Mass shootings typically send buyers clamoring for more guns because they’re worried about tighter gun control. But not during President Trump’s time in office. A possible reason: those fears have been mostly assuaged by a Republican-controlled (and NRA-backed) White House and Congress.

Actually, gun sales last year were the worst they’ve been since 1999. FBI background checks (a rough metric for licensed purchases) dropped 8% in 2017. Even Remington, one of the world’s oldest gunmakers, is planning to file for bankruptcy.

Activist Investor Makes Big Order on Bloomin’ Brands Menu

Bloomin’ Brands (+5.41%), operator of Outback Steakhouse, is the latest casual dining joint to be targeted by activists. And not the picket sign-wielding kind, the “listen to my suggestions or we’ll come and overthrow your board” kind.

This time, Barington Capital Group suggested Bloomin’ Brands should spin off three smaller brands—Bonefish, Fleming’s, and Carrabba’s—into one company and let Outback spread its wings.

In the letter to the Bloomin’ CEO, Barington didn’t hold back:

“Over the last five years, we believe that management lost their focus and has ceded leadership in the steakhouse category to Texas Roadhouse.”

To restore it to its former, medium-well glory, Barington wants Bloomin’ to cut unnecessary costs, shake up board processes, and appoint an independent board chair.

Zoom out: Barington has less than a 0.5% stake in Bloomin’, so we’ll see if this holds weight. But the casual dining industry has recently seen one victory from activists looking to order up some change. Case in point: Buffalo Wild Wings.

Change the Priceline Group’s Name in Your Address Book

“If I’m gonna tell a real story, I’m gonna start with my name.”—Kendrick Lamar

The Priceline Group (-0.74%) hasn’t been telling a real story, so it’s changing its name to Booking Holdings.

According to CEO Glenn Fogel, the shift highlights that the travel conglomerate is far bigger than its Priceline.com brand. In fact, subsidiary Booking.com is its largest business unit “by far,” averaging ~1 million bookings per day.

A global portfolio: Americans are familiar with Priceline.com (thanks William Shatner), but newly-christened Booking Holdings is the parent of many international travel-oriented companies. It owns OpenTable, Kayak.com, Rentalcars.com, Singapore-based Agoda.com, and more.

Booking Holdings is going to need all those brands—especially Booking.com—to maintain a lead in a travel industry that’s facing disruption from Airbnb and Google. Meanwhile, it’s still chasing Expedia for the No. 1 spot in global market share.

The New Frontier: Trump’s Space Race 2.0

Earlier this month, SpaceX successfully launched its Falcon Heavy rocket, firing initiatives for privately-owned space exploration into the spotlight. And the Trump administration has announced steps to cut through the red tape and further clear the way for a new Star Wars between Jeff Bezos (Blue Origin), Richard Branson (Virgin Galactic), and Elon Musk (SpaceX).

The first step? Restructure the Federal Aviation Administration’s Office of Commercial Space Transportation. “There’s no reason our government should stand in the way of private companies that are trailblazing,” said Vice President Mike Pence (who also chairs the rehabilitated National Space Council).

Cooking up some healthy competition: The overhaul started with the formation of a 29-member advisory board comprised of key players in the space to facilitate industry deregulation and public-private collaboration. It met yesterday for the second time.

CEOs from the United Launch Alliance (Boeing’s Dennis Muilenberg and Lockheed’s Marillyn Hewson) sit on the board, as does SpaceX President Gwynne Shotwell, the CEO of Sierra Nevada Corp, and a group of former astronauts including Buzz Aldrin.

Together, they’ll aim to thrust the commercial space race into orbit on free-market ideas.

What Else Is Happening…

  • Uber launched Uber Express Pool which allows for shared rides to also share more direct routing.
  • AT&T’s (-1.22%) mobile 5G launch has found homes in Atlanta, Waco, and Dallas.
  • General Motors (-0.52%) wants to invest $2.8 billion over 10 years into its South Korean operations.
  • JPMorgan (+0.42%) is renovating. The bank is rebuilding a 2.5-million-square-foot HQ at its Park Avenue address to house up to 15,000 employees.
  • Media HR alert: The Atlantic is hiring up to 100 new staffers, while Vox is laying off 50 employees.
  • Snapchat will make a few more tweaks on its redesigned app in response to your petition.
  • Broadcom (-0.40%) cut its offer to Qualcomm (-0.92%) to $117 billion after Qualcomm raised its NXP bid.

Economic Calendar

  • Monday     Earnings: No Events
  •                     Economic Events: No Events

  • Tuesday    Earnings: Domino’s (+/-), Home Depot (+), HSBC Holdings (-)
  •                   Economic Events: No Events

  • Wednesday    Earnings: Pandora (+), Roku (+/-)
  •                         Economic Events: PMI (+), Existing Home Sales (-)

  • Thursday   Earnings: Barclays, HPE, HP, Intuit, Wayfair
  •                    Economic Events: Jobless Claims

  • Friday       Earnings: No Events
  •                  Economic Events: No Events

The Bigger Picture: Cobalt’s Time to Shine

What’s dwindling faster than your iPhone battery? The global supply of cobalt—the metal that’s a critical component of your iPhone’s battery.

Supply levels are low enough that Apple is now in talks to secure long-term deals for cobalt directly from miners for the first time (before, it left this role to its battery suppliers).

About ~25% of cobalt is used for lithium-ion batteries in smartphones. Another chunk is used for batteries in electric vehicles. And unfortunately for Apple, these car batteries use 1,000x more cobalt than smartphone batteries. So, it’s now finding itself in heated competition with BMW and Volkswagen (as well as Samsung) to lock in a steady stream of cobalt for the next decade.

Unsurprisingly, the price of cobalt has tripled over the past 18 months.

Picture

Need some cobalt? (We won’t ask why.) Head to the Democratic Republic of the Congo, which accounts for 58% of global cobalt production.

The Breakroom

Question of the Day

There are three blocks on a table: a 1 kilogram block, a 500 gram block, and a 2 kilogram block. What is the weight of the heaviest block on the table?

(Answer located at the bottom of newsletter)

Business Trivia

Yahoo! is actually an acronym. What does it stand for?

(Answer located at the bottom of newsletter)

Stat of the Day

94%—The percentage of 843 Hollywood women—“producers, actors, writers, directors, editors and others”—who have experienced some form of sexual harassment or assault.

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Breakroom Answers

Question of the Day: About 19.6 Newtons. (Explannation)

Business Trivia: Yet Another Hierarchical Officious Oracle

 

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