The Last Laugh

QUOTE OF THE DAY

“Stormy weather in Shortville…”—Elon Musk, CEO of Tesla (+7.27%), in a not-so-subtle jab at short sellers. After Tesla’s big day yesterday, short sellers lost an estimated $488 million. Oof.

MARKET CORNER

Market Snapshot

• Disappointing auto sales numbers led to declines in all three major American indices, with fiat Chrysler falling almost five percent, trailed by GM and Ford. Earnings season is fast approaching, so the movement in stocks is anybody's guess
• Inflation has finally crept up to the Fed’s two percent target ahead of the bank’s March minutes release on Wednesday, which could suggest several more interest rate hikes this year

Tesla Is Now Worth More Than Ford

...but sold 521,000 less cars in the first quarter of this year. Elon Musk’s electric vehicle sales may pale in comparison to what the major automakers are able to churn out, but Tesla’s delivery of 25,000 cars last quarter is a 69 percent increase over the previous year. In turn, the Palo Alto-based company’s market cap passed $48.2 billion on Monday.

Delays plagued Tesla deliveries last year, but yesterday’s numbers are a much-needed positive omen for the Model 3’s production, planned to start in July at Tesla’s new Nevada 'gigafactory.' Musk has a long way to go, but he’s starting to catch up with Detroit. As one analyst put it: "People that would normally buy a Porsche are buying Teslas right now."

Panera’s Dough is Rising

...thanks to rumors that the $6.5 billion bread chain is mulling a sale. Bloomberg reports that the St. Louis-based eatery’s potential suitors range from Domino’s (+1.03%) to Starbucks (+0.09%), which sent the stock soaring Monday morning. Food mergers are hot and greasy right now: with Burger King acquiring Popeye’s and Tim Hortons last year for roughly $1.8 billion, Olive Garden buying Cheddar’s, and a private-equity firm snapping up Checkers.

But it goes beyond buyouts: 2016 was a terrible year for fast food chains thanks to ever-evolving health trends. McDonald’s is McDouble-ing down on it’s futuristic ‘McCafe’ concept with touchscreen ordering and more customization options, while Chipotle continues to hawk its antibiotic-free, ethically sourced ingredients list. May the greenest grease win…

Starbucks Has a New Leader

...as Kevin Johnson takes the reins from Howard Schultz. For the first time in nine years, someone other than Schultz helms the Seattle-based coffee empire (+0.09%) this week. Believe it or not, Schultz is actually quite the rags-to-riches story. From his humble beginnings in Brooklyn, Schultz was able to overcome adversity and help build one of the world’s most iconic and beloved brands.

How’d he do it? Long story short, he was able to understand the personal relationship people could have with coffee. That realization helped turn a small pacific northwest coffeehouse into the largest caffeine chain on the planet. Now Johnson, who previously served as COO, is the new coffee chief. The chain’s plans include more expansion of its ‘reserve’ stores, as well as opening 12,000 new locations worldwide this year. BRB, need more coffee...

The End Of An Era

…as J.Crew’s iconic creative director and president of 26 years, Jenna Lyons, steps down. Lyons has worked at J.Crew for 26 years, spending most of the past decade at the helm of the preppy retailer. Her tenure undoubtedly breathed new life into the brand by making it trendy again, but the numbers don’t lie. Amidst declining sales and increasingly brutal retail conditions, Lyons and J.Crew CEO Mickey Drexler have agreed it’s "time for a change". Over the years, Lyons has become emblematic of J.Crew, so her departure at the end of the year will signal the start of a major strategic shift. So long, Lyons. Gone but never forgotten.

What Else Is Happening…

• Would you let your employer implant a microchip in your skin? That’s what one Swedish company is doing
• Marijuana companies could finally legally operate under federal law, thanks to a new bill introduced in Congress last week
• Amazon introduces ‘Cash,’ a way to pay for online purchases without a card by depositing money in stores
• How much is an Apple supplier contract worth? A British chipmaker found out the hard way—losing 70 percent of its revenue

Note From The Brew Crew

Morning Brew is in the finals of a startup competition at the University of Michigan of Michigan and we need your help to win! All you need to do is click on

Economic Calendar

• Monday: Motor Vehicle Sales, PMI Manufacturing Index (-), Gallup US Consumer Spending Measure (+/-)
• Tuesday: Redbook; Earnings: Jamba Inc.
• Wednesday: FOMC Minutes; Earnings: Bed Bath & Beyond, Monsanto, Walgreens Boots Alliance
• Thursday: Fed Balance Sheet, Money Supply; Earnings: Neiman Marcus
• Friday: Employment, Baker Hughes Rig Count, Consumer Credit; Earnings: Cargill

WATER COOLER

Which Brands Teens Adore—and Which They Deplore

Google yesterday published "It’s Lit: A guide to what teens think is cool," a study commissioned from British political data firm YouGov. Its results paint the picture of a mobile-first generation with wildly different perceptions of brands than their older peers. This shift is impacting sales, brand perception and overall consumption by young people, too. Here are just a few of the findings:

• Despite its extremely young target audience, Vice is one of the least cool companies
• Tesla is cooler than any other automaker, BUT… cars were more popular with the previous generation than teens
• Teens think Google and YouTube are cool. Suspicious, given that the search giant commissioned the research. Whatever you say...

THE BREAKROOM

Interview Question

There are three boxes, one contains only apples, one contains only oranges, and one contains both apples and oranges. The boxes have been incorrectly labeled such that no label identifies the actual contents of the box it labels. Opening just one box, and without looking in the box, you take out one piece of fruit. By looking at the fruit, how can you immediately label all of the boxes correctly? (Answer)

Stat of the Day

How much more are you willing to pay for a good view? Well, in the case of Japan, $6.8 billion is the lucky number. In advance of the 2020 Olympics, Tokyo Electric Company, Tepco, is being made responsible for removing hundreds of thousands of utility poles that block views of Japan’s famous cherry blossoms and neon lights. But maybe for good reason—at about 35 million, there are almost as many utility poles as cherry trees.

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