Trump the builder

Quote of the Day

We cannot continue to prop up a digital supply chain...which at times is little better than a swamp in terms of its transparency."

Market Snapshot

• U.S. indexes put last week’s turbulence in the rearview mirror with a strong day.
• Shares of dollar store chains fell after the White House’s spending plan proposed shaking up SNAP benefits.
• GE was the only Dow stock to finish down.
• 10-year Treasury yields briefly jumped over 2.9%, hitting a four-year high.

The White House Infrastructure Plan: A Road to Nowhere?

As part of its $4.4 trillion spending plan, the White House released its infrastructure strategy. The plan hopes to leverage $200 billion in federal funding to spark $1.5 trillion in total investment from local governments and private industry.

Even if you don’t trust that math, it’s clear our country’s roads, bridges, tunnels, and transit are failing. Well...pretty darn close, at least. The American Society of Civil Engineers gave our infrastructure a “D+” grade in 2017 and recommended we change our national symbol from the bald eagle to the pothole.

How the White House hopes to boost that score

* Grant competitions: Dangle $100 billion in matching grants to local and state governments to pitch their own projects. Extra credit if the applicants can secure other revenue streams to fund the project (i.e. tolls or taxes).
* Rural infrastructure: Distribute $50 billion among state governors to close the widening economic gap between urban and rural areas.
* Streamlined permitting: Toss out the current environmental review model, which requires projects to get approval from multiple federal agencies. Instead, they’ll go through one lead agency, and the entire process has a “firm deadline” of 21 months.

The one thing to know: This plan represents a major shift in how the federal government approaches infrastructure, delegating much of the financial burden to the local level and the private sector.

So is this thing going to happen or what?

Probably not, given the plan needs bipartisan support and manages to tick off both sides. Democrats think the plan doesn’t provide even close to enough funding (not to mention it guts environmental oversight), while Republicans won’t be able to stomach even more government outlays (following the passage of a $300 billion spending bill).

We won’t call it “science fiction” like some observers, but if an infrastructure bill is passed by Congress, don’t expect it to look like this one.

Meanwhile, in China: 1,500 workers built an entire train station in nine hours.

Unilever Raises the Stakes With Facebook and Google

Consumer goods giant Unilever (+1.83%) is giving Facebook and Google two options: scrub out the Fake News and divisive content with this Dove soap, or it’ll take its ad dollars elsewhere.

And that’s a lot of ad dollars—behind P&G, Unilever is the world’s biggest ad spender with an annual budget of $9.8 billion. Of that, 25% goes toward digital platforms.

Zoom out: Facebook and Google have been on the “explain yourself” tour this past year, answering inquiries about 1) election meddling by Russian operatives, 2) ads appearing near violent, illegal, or sexual content, and 3) teenage mental health concerns due to addiction.

All important questions considering the near-monopolistic power the two have. Forty-five percent of American adults receive their news from Facebook, and combined, Facebook and Google control 60% of all digital ad spend.

How they’ve responded: Larger teams for monitoring content and third-party fact-checkers, for starters. But the biggest change has come from Facebook, which switched up its algorithm to promote friends and family posts over third-party content.

The bigger picture: Unilever is one of the first to swing its Axe—the company’s status will likely give others the confidence to speak up.

Instacart Checks Out With $200 Million in Funding

Meet us in the grocery store, it’s going down. On the heels of Amazon’s announcement that it would offer free two-hour Prime delivery for Whole Foods, Instacart raised a $200 million Series E, valuing the delivery startup at $4.2 billion.

Prior to Amazon’s program, Instacart had an exclusive five-year partnership with Whole Foods. So, the funding round feels like the retaliation of a scorned lover. At the very least, a competitive one. “We raised it because we want to win,” said Instacart co-founder and CEO Apoorva Mehta.

Instacart is already competing by inking deals with Albertsons and Costco—chains concerned with Amazon’s encroachment into grocery. The $200 million will also help Mehta cross a few things off his shopping list:

* Expand outside Instacart’s current 190 markets in the U.S. and Canada
* Hire 200 employees this year

Despite being a major partner and shareholder, Whole Foods stayed home for this fundraising round.

Amazon Puts HQ Employees On Chopping Block

If you’re working at Amazon’s (+3.48%) HQ1 in Seattle, keep your head down and vibes up—otherwise, you might be one of the hundreds of employees to get the boot.

It’s not often we hear tales of Amazon firing employees—last year alone the company hired 130,000 people. Not to mention it’s grown its Seattle HQ from 5,000 employees to 40,000 since 2010.

But times, they are a (kinda) changin’

At least for Amazon’s consumer retail business. The company will now trim any excess in that division and shift hiring efforts towards growth areas like Alexa, AWS, and digital entertainment.

That said, these layoffs reflect yearly budget evaluations more so than any sweeping strategy changes—unlike when Microsoft laid off thousands of employees to reorganize its sales operation last year.

But if that still doesn’t sit well with you, repeat after us: “Alexa, I’d like to file a complaint.”

What Else Is Happening…

• Inside President Trump’s $4.4 trillion budget.
• WSJ: Walgreens has approached AmerisourceBergen (+15.68% after hours) about a takeover (paywall).
• Defense contractor General Dynamics (-1.21%) is buying little brother CSRA for $6.8 billion (+31.05%) to boost IT capabilities.
• Xerox (+1.15%) investors Carl Icahn and Darwin Deason are not fans of of the $6.1 billion Xerox-Fujifilm deal.
• So you won’t fall asleep at the wheel, Uber will require drivers who drive 12 straight hours to rest for the next six.

Why you shouldn't trust the Dow (Morning Brew).

Economic Calendar

• Monday     Earnings: Heineken (+/-), Restaurant Brands International (-)

                    Economic Events: Treasury Budget (+/-)

• Tuesday    Earnings: PepsiCo

                  Economic Events: Small Business Optimism Index

• Wednesday    Earnings: Cisco, Marriott, Credit Suisse

                        Economic Events: CPI, Retail Sales, Business Inventories

• Thursday   Earnings: No Events

                   Economic Events: PPI, Industrial Production

• Friday       Earnings: Allianz, Kraft Heinz

                 Economic Events: Consumer Sentiment

Venture This: OCD? There’s an App for That

We’re all “obsessed” with our phones, but for people with actual diagnosable obsessive-compulsive disorder, there’s the free app nOCD. It’s already available on iOS and planning to launch on Android soon, courtesy of its new $1 million seed round.

What we like

OCD affects an estimated 2.3% of Americans, and the World Health Organization describes it as one of the most disabling conditions. nOCD is free and easy to use, addressing the barrier to inaccessible or expensive traditional treatment.

The app uses a type of cognitive behavioral therapy—exposure and response prevention (ERP) —that is especially effective in OCD treatment. These exercises expose sufferers to images and situations that trigger an obsessive-compulsive episode and then guide users through steps to manage the symptoms.

It doesn’t hurt that founder and CEO Stephen Smith started working on the app—currently boasting 80,000 users—after his own OCD symptoms threw a wrench in his college life.

What’s got us stuck

Numerous self-help mental health apps (e.g. In Flow, Happify, Koko) have been launched over the past few years, which raises the question: can an app be a successful substitute for real, live therapy?

Now it’s time to hear from you: when it comes to nOCD, are you IN or OUT?

The Breakroom

Question of the Day

Three co-workers would like to know their average salary.

However, they are self-conscious and don't want to tell each other their own salaries. How can they find their average salary, without disclosing their own salaries?

(Answer located at the bottom of newsletter)

Business Trivia

Which of the following is NOT the name of an actual cryptocurrency?

Garlicoin, Kanyecoin, Unobtanium, Pandacoin

(Answer located at the bottom of newsletter)

Stat of the Day

$200 million—How much a fund manager named “50 Cent” made thanks to the market’s volatility last week. The nickname comes from the price the fund paid for options on the VIX—yep, 50 cents.

Breakroom Answers

Question of the Day: Person 1 adds a constant to her salary and tells person 2. Person 2 adds his salary and tells Person 3. Person 3 adds her salary and tells Person 1. Person 1 subtracts the original constant and then divides by 3 to get the average.

Business Trivia: Kanyecoin