This feels...familiar
QUOTE OF THE DAY
It’s amazing that we can put a man on the moon, but movies like this still somehow get made."
A Vox film critic. Turns out The Emoji Movie was a steaming pile of
Market Snapshot
- The Dow closed at an all-time high, while the S&P and Nasdaq both finished lower.
- Oil posted its best weekly gain this year (+8.6%) on signs of falling supply.
- Gold hit a six-week high on weaker-than-expected inflation.
- Canadian GDP beat forecasts as oil production jumped.
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This Feels...Familiar
Wells Fargo is getting awfully good at apologies. And on Friday, the big bank looked like a seasoned vet delivering a "We’re sorry. But hey, we swear we were gonna tell you!"
Wells Fargo may have purposefully (or inadvertently) charged over 570,000 customers for car insurance they did not need. Oh, it gets worse.
Up to 25,000 customers may have defaulted or had their cars repossessed because of the loans. In a gesture of good faith, Wells Fargo will fork over $80 million with each affected customer receiving a staggering $140 for their troubles.
Even with the once-in-a-lifetime payday, Wells Fargo is in deepwater. The bank is still playing clean up from last September’s scandal, which affected nearly 2.1 million accounts.
Make Smoking Safe Again
With 480,000 related deaths per year and $300 billion in medical and productivity costs, the burden of smoking is too high to handle.
Now, the FDA is lowering nicotine levels in cigarettes to non-addictive levels. And with any luck, smokers will trend towards healthier forms of smoking, like vaping.
As expected, cigarette companies were shaken by the news. Altria fell 19% (its biggest one-day drop since 1999), British American fell 11% and Philip Morris was down 3.5%.
Regulations and taxes on cigarettes are a fabric of society in the U.S, but they haven’t harmed cigarette companies as much as you’d think.
From 2001 to 2016, the overall number of cigarettes sold in the U.S. fell by 37%, while revenue rose 32% to $93.4 billion.
Fins Up
After 13 years as a private company, Redfin put up the For Sale signs and IPO’d at $15 a share, soaring 45% on day one.
Wait a second. Redfin?
Picture your run-of-the-mill online home broker (think Zillow) with an Instagram-style feed of homes for sale in your area.
Sounds cool, but that’s not why the street is raving about it. Among the many reasons, Fin prides itself on a superior level of customer service.
Unlike most real estate agents, Redfin’s brokers do not make traditional commissions. Rather, they are paid industry-beating salaries with bonuses for exceptional customer service.
It’s this client-facing strategy which offers a unique position in a day-and-age where most companies are hiding behind their screens.
With the $138.5 million raised in the IPO, Redfin has its sights set on a bigger picture: becoming the one-stop shop of all things real estate.
Back with The Frack
With oil hovering below $50 a barrel, it might surprise you that U.S. oil companies are doing well. Just take a peek at Exxon.
Despite a share price that’s been stuck in a rut (down 12% this year), Exxon posted second quarter profits of $3.35 billion, up from $1.7 billion in Q2 last year. So, what’s been the secret sauce?
A shift toward short-term strategies like fracking and deepwater drilling. U.S. oil companies are moving from long-term, high upfront cost productions to "short cycle" operations as they prepare for a world, where oil never returns to $100 a barrel.
And with Exxon posting its strongest quarter since the 2014 price crash, it looks to be paying off.
Tell Me More…
- Uber approached General Electric’s CEO, Jeff Immelt, to fill the CEO role.
- Stitch Fix has filed to go public at a $3-4 billion valuation.
- Air France-KLM will purchase a 31% stake in Virgin Atlantic for $288 million.
- Sprint proposed a merger with Charter Communications.
Economic Calendar
- Monday Earnings: Altaba, Panasonic, Papa John’s, Pandora, Sony
- Tuesday Earnings: Allstate, Apple, Kate Spade, Shopify, Simon Property Group, Sprint, Steve Madden, Thomson Reuters, Under Armour, Xerox
- Wednesday Earnings: 3D Systems, AIG, Cheesecake Factory, JLL, Plug Power, Square, Tesla, Time Warner, Adidas
- Thursday Earnings: Activision Blizzard, Aetna, Berkshire Hathaway, Duke Energy, Etsy, GrubHub, Kellogg, Kraft Heinz, Paramount, Shake Shack, Toyota, Yelp, Viacom, Yum!
- Friday Earnings: No Events Today
Economic Events: Pending Home Sales
Economic Events: Auto Sales, Truck Sales, Construction, Core PCE, Personal Income
Economic Events: Crude Inventories, ADP Employment Change, MBA Mortgage Applications
Economic Events: Natural Gas Inventories, Factory Orders, Initial Claims
Economic Events: Unemployment Rate, Nonfarm Payrolls, Trade Balance
From the Crew
From Michael: Gadfly
Considering my job is to scour the internet and find the best gems to bring you each day, it’s fair to say I’ve seen a TON of different sites. One of my favorites is Bloomberg’s Gadlfy. If you’re looking for a few good reads with some even better graphs that help tell the whole story, Gadfly is the place to go. That being said...
Never stop brewing
From Austin: Red Notice
Add this to your list of must-read finance books. After building the largest hedge fund in Russia, Browder exposes government corruption and gets expelled for doing so. Red Notice details his rise to the top of the finance world and his life goal of avenging the death of the attorney, who investigated the corruption Browder discovered.
From Alex: Slappin’ Da Bass
Sofar is a global community (in 366 cities) of musicians, music lovers and open-minded people looking to meet other open-minded people. It curates "secret, intimate gigs in unique spaces, from living rooms and churches to hoodie shops and fancy furniture showrooms."
Find one in your city now
From Josh: Don’t Watch That Trailer
Startups are all the rage these days with huge fund-raising rounds and pop star CEOs. Yet people undervalue this casual statistic: 90% of startups fail. Collapse.co is the “graveyard” for failed ventures and helps us learn from previous mistakes. See if you recognize any names, pay your respects and hopefully learn a thing or two by using history to your advantage.
Dead, but not forgotten
Question of the Day
Jack is looking at Anne, but Anne is looking at George. Jack is married, but George is not. Is a married person looking at an unmarried person?
A: Yes
B: No
C: Cannot be determined
(Give up?)
Who Am I?
I am the CEO of the largest gaming company in the world (by revenue).
I developed China’s largest instant messaging app with over 938 million monthly active users.
I am the second richest man in China with a net worth of $34.5 billion.
Ever heard of League of Legends? I own that too.
Stat of the Day
$99/month
Twitter is offering a new service that lets businesses choose which tweets get promoted each month. After this quarter’s earnings report, it is time to start reaching into that bag of tricks.