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Quote of the Day

They see a huge opportunity and they are moving as fast as they can to attack it.”

Market Snapshot

• U.S. indexes finished at record highs after the Senate voted to end the shutdown.
• Apple ended slightly up after hours despite reports suggesting the company might cancel production of the iPhone X.
• European and Asian markets capped the day mostly up.
• Vanguard's CEO ruled out creating a Bitcoin fund.

Amazon Finally Opens Amazon Go

Bulldozing the traditional brick-and-mortar retail model is no longer good enough for Amazon (+2.53%). As of yesterday, it’s putting the “convenience” back in “convenience store” with its new Amazon Go cashierless store.

Located on the ground floor of Amazon’s Seattle HQ, Amazon Go allows customers to grab any products they’d like and walk right out of the store.

Sure, it sounds like we just promoted shoplifting. But as long as you’re in the store, sensors track when you lift an item off the shelf (and when you put it back), add expenses to your Amazon cart in real-time, and charge your account when you leave through a turnstile exit.

It’s awesome, we know. But this futuristic Wawa didn’t appear overnight

Amazon first announced the project in December 2016 with a rollout date set for early 2017. Why the delay until 2018? As it turns out, tracking erratic hand motions—like deciding whether we want to grab a yogurt from the top shelf or eggs from the bottom shelf—is harder than it sounds (even for Amazon).

It takes an orchestra of sensors embedded in the ceiling to precisely interpret each person’s movements—and after a year of testing and three pikachu-costumed “customers” simultaneously attempting to trick the technology (they didn’t), Amazon knew it got it right.

In China, Jack Ma yawns and says, “It’s about time”

Like everything else, cashierless shopping experiences have “Made in China” stamped all over them. Credit Alibaba, which opened a similar shop-and-go style store, called Tao Cafe, last year.

Then there’s BingoBox, which doesn’t sport all the high-tech AI Amazon Go promises, but it has raised over $80 million in funding to launch over 200 cashier-free convenience stores across China.

No, we’re not saying go to China—we’re warning traditional retail

Right now, Amazon says it has no plans to release this feature in Whole Foods or open other Amazon Gos. But we’ll ask anyway: what if it does? The cashierless trend is clearly on the rise. So what happens to the 3.5 million cashiers in the U.S. if Amazon leases the tech to other retailers and makes this model the standard for brick-and-mortar shopping?

Supposedly, no jobs were harmed in the making of Amazon Go—but that’s one store, and this is one question definitely worth asking.

Malala and Apple Pair Up in the Classroom

It isn’t enough for Malala Yousafzai to take a stand (and survive a Taliban assassination attempt) for her own right to education. Now, the Pakistani activist and youngest-ever Nobel Peace Prize laureate is advocating for more than 100,000 girls in the Middle East and Latin America. And she’s putting an Apple on all those desks with the help of none other than CEO Tim Cook.

1 + 1 = change

The partnership between Apple and the Malala Fund—co-founded with her father to support 12 years of accessible, safe, and comprehensive education for all girls—will help deliver on the fund’s goal to provide secondary education opportunities for young women in countries including Afghanistan, Pakistan, Lebanon, Turkey, and Nigeria.

Apple’s contributions to the organization will extend from technology and curriculum assistance to researching policy improvements to open even more doors for girls’ education. Cook will also join the fund’s leadership council.

Yousafzai will speak this week in Davos at the World Economic Forum—and we’re taking notes.

Biotech’s $20 Billion Day

The doctor is in—and prescribing a heavy dose of M&A in the biotech industry.

French powerhouse Sanofi (-3.14%) made a deal to buy hemophilia specialist Bioverativ for $11.6 billion to add newer treatments to its medicine cabinet. Hours later, U.S. giant Celgene acquired Juno Therapeutics with a $9 billion bet on a revolutionary cancer technology.

Something’s in the (healthc)air

The deals may be the first signal of recovery in healthcare M&A after a clammy 2017. Or is it a symptom of intense market pressure? Large companies have to hedge against declining sales of older treatments and find in-house upgrades. Celgene (+0.25%) is ailed by generic competition for its top-shelf cancer treatment Revlimid.

So it’s looking to beef up. In addition to the Juno acquisition, earlier this month Celgene agreed to pay $1.1 billion for another cancer company, Impact Biomedicines.

Brew Rx: take two biotech takeovers and call us in the morning (with the bullish expectation of more to come).

Bacardi Walks into a Bar, Orders Patron

Bacardi is reaching for the top shelf and grabbing Patron tequila at a $5.1 billion valuation. To which we say: please merge responsibly.

The acquisition joins two spirits heavyweights: Bacardi, known best for its rum, is the No. 1 private alcohol company in the world, while Patron leads the premium tequila market.

And while it’s never smart to mix rum with tequila, the two are old drinking buddies—Bacardi has controlled a 30% stake in Patron since 2008. But with demand for high-end tequila on the rise, Bacardi figures now is the perfect time to down the entire thing.

Actually, “on the rise” understates the surge of agave-based spirits. U.S. volumes of super-premium tequila grew by more than 700% from 2002-2016. And to drive home the point, look no further than George Clooney...take a good look, we’ll wait…who sold his own tequila brand, Casamigos, for up to $1 billion.

What Else Is Happening…

• Third Point hedge fund manager Daniel Loeb is pressuring Nestle to make changes faster.
• The largest oil refiner on the East Coast, Philadelphia Energy Solutions, is now bankrupt.
• Paying subscribers for YouTube TV (300,000) and Hulu's live service (450,000) are filing in.
• With one eye on China, the U.S. is imposing tariffs on imported solar panels and washing machines.

Economic Calendar

• Monday     Earnings: Netflix (+/-), UBS (-)

                    Economic Events: Chicago Fed National Activity Index (+)

• Tuesday    Earnings: Capital One, Johnson & Johnson, LG, P&G, Travelers, Verizon

                  Economic Events: Rich Fed Mfg Index

• Wednesday    Earnings: Comcast, Discover, Ford, GE, Novartis

                        Economic Events: PMI, Existing Home Sales

• Thursday   Earnings: 3M, American Airlines, Caterpillar, Celgene, FCA, Intel, Northrop Grumman, Raytheon, Southwest, Starbucks

                   Economic Events: Jobless Claims, New Home Sales

• Friday       Earnings: Honeywell, Rockwell Collins

                 Economic Events: Durable Goods, GDP

Venture This: Bolt Threads' High-Tech Solution for Apparel

Bolt Threads is a high-tech fabrics startup producing a material nearly identical to spider silk by fermenting corn with specialty yeast.

It’s impressive technology

How do we know? Others have taken stabs at making spider silk—a sought-after material known to be extremely durable yet soft. But there was one tiny issue with their schemes: the territorial spiders they used killed each other before they had the chance to make the silk.

Bolt Threads’ process eliminates the problem by replacing spiders with microorganisms more disposed to pacifism, and it’s got an actual product to show for it: a $314 limited-edition necktie. And VCs are digging Bolt Threads’ style. The startup recently announced a huge $123 million Series D, bringing its total fundraising haul to $213 million.

But is it worth the risk?

We’ve never tried, but by all accounts it’s pretty difficult to coax an army of bacteria to produce human apparel at a reasonable cost. That’s why it took almost seven years for Bolt Threads to make its first product. And even then, it could only produce 50 neckties.

So you can bet we’re worried about scalability.

But forget us, we want to hear from you. Vote whether you’re IN or OUT on Bolt

The Breakroom

Question of the Day

Which is greater: the number of seconds in a week or the number of minutes in a year?

(Answer located at the bottom of newsletter)

Business Trivia

With the government shutting down for three-and-a-half days, we felt it appropriate to ask: when was the last time the government shut down?

Bonus Question: Over or under 10: the number of times the government shut down since 1976 (the year the new process was instituted).

(Answer located at the bottom of newsletter)

Stat of the Day

$40 million—The estimated value of a diamond dug up in Lesotho, a small African country. To put that into perspective, the GDP of Lesotho is roughly $2.2 billion, which means this diamond could be worth 1.8% of the country’s annual output.

Breakroom Answers

Question of the Day: The number of seconds in a week. 604,800 seconds vs. 525,600 minutes. (Explannation)

Business Trivia: 2013. Bonus Answer: 19 times.