What Maverick's missing

MARKETS

• Trade: Top U.S.-China negotiators negotiated for the first time since July. Investors are hoping a deal, even a mini-deal, will come out of the talks. President Trump said the chats are “going really well," and that he'll meet with China's No. 1 trade guru today.

GEOPOLITICS

This Picture Pretty Much Sums Up the Week

After an exhausting week of controversies, U.S. executives could use a China playbook. If you’re trying to understand why some businesses are bending the knee to Beijing and far fewer are pushing back, here’s a taste of the high stakes.

Tech

Wednesday, Apple pulled Quartz’s app (which included coverage of the Hong Kong protests) from its Chinese App Store, and it removed a Hong Kong mapping app (which Apple says violates App Store policies and local laws). Apple (+1.35%) also deleted the Taiwan flag emoji for Hong Kong and Macau iOS 13 users.

• What’s at stake: CEO Tim Cook’s spent years cozying up to China, which accounted for almost $44 billion in revenue in the year ending June 30. China also handles the majority of Apple’s assembly.

Entertainment

Some foreign movie studios are catering to Beijing by promoting Chinese products and censoring any political red flags in their films. Literally. Cinema sleuths noticed that the Japanese and Taiwanese flags are missing from Maverick’s jacket in the upcoming Top Gun sequel.

• What’s at stake: China’s 60k+ movie screens and 190+ million streaming customers. Next year, it’s expected to become the largest movie-going market with at least $12.2 billion in domestic sales.

Sports

The NBA’s tiff with China comes at a time when basketball’s “never been more popular” in the country, according to the NBA’s China head.

• What’s at stake: tremendous growth in an overseas market that’s gaga for basketball. Nearly 500 million Chinese people streamed NBA content last year (the U.S.' entire population is ~330 million).
• The Nets and Lakers played a preseason game in Shanghai yesterday, but Chinese officials stripped all media availability. "Virtually all corporate signage" was taken down in the arena, reports the AP.

Bottom line: U.S. companies and executives are increasingly taking stands on political issues at home (like DACA and gun control) but have largely ignored China’s free speech and human rights abuses. TBD whether intense scrutiny from the American public this week will force them to change their approaches.

VENTURE CAPITAL

State of the Unicorn Backers

Consider the tables turned. The venture capital industry’s numbers came in Wednesday...and you get to decide if it’s worth your investment.

By that we mean NVCA and PitchBook released their quarterly VC report. And iFundU looks like a promising young firm...

• Overall deal value in 2019 will almost definitely pass $100 billion for the second year in a row, funneled to about 28 startups/day.
• The deal tally’s expected to pass 10,000 for the third consecutive year.
• We’ve seen a huge number of $50+ million deals in 2019, which Axios’s Dan Primack says “might be the industry’s high-volume mark.”

But not everyone’s bullish. Several of this year’s IPO disappointments and no-shows (condolences to readers who were betting on Uber, Lyft, Peloton, or WeWork) have embarrassed some venture capitalists, especially SoftBank.

• Still, those IPOs have helped create over $200 billion in exit value for VCs. That makes 2019 the most lucrative year for exits ever...and we’re less than 80% of the way through the year.

Bottom line: Despite some high-profile misses, the VC engine is humming.

SHIPPING

Can Anybody...Find Me...a Supertanker to Love?

Right now, finding a ship to move your oil is more difficult than finding an Uber in Antarctica at 3am. There just aren’t enough tankers to go around.

That’s sent the cost of shipping oil to an 11-year high, the WSJ reported. So what’s behind the supply squeeze?

• Two weeks ago, the U.S. imposed sanctions on subsidiaries of the Chinese tanker owner Cosco, which were allegedly shipping Iranian oil when they shouldn't have been.
• Cosco has the most capacity of any shipping operator in the world, with over 1,100 vessels in its mighty armada.

So if dozens of Chinese ships being blacklisted is the Antarctica part, here’s the 3am part: As many as 60 other supertankers are also out of commission. They’re hanging out on dry docks waiting to be retrofitted with equipment that will make them compliant with new emissions regulations set to take effect in January.

Bottom line: When reached for comment, shipowners not named Cosco replied . Still, the industry is all shook up from the sudden spike in prices.

AUTO

Dyson Tosses Its Electric Car Plans

Dyson has a message for all you vacuum cleaner moguls looking to get into the electric car business: It’s not so easy.

James Dyson, the billionaire entrepreneur who founded the vacuum cleaner maker, pulled the plug on his company’s plans to build an electric car yesterday. “Though we have tried very hard throughout the development process, we simply can no longer see a way to make it commercially viable,” he wrote in an email sent to staff.

• What went wrong? Well, actually making the thing wasn’t the problem, according to Dyson, who said his team of 500+ employees created a “fantastic car” from the blueprints you can see below.

The issue is the brutal electric vehicle industry, with legacy carmakers and startups alike pouring in billions to create the next generation of cars. Even Tesla, which posted record delivery numbers in the third quarter (97,000), is not yet a sustainably profitable company.

Looking ahead...Dyson didn’t have a deep enough wallet to compete in cars, but it will continue to invest in solid-state battery technology.

QUIZ

Turns Out I’m 100% That Quiz

Amped for the MLB LCS games. Getting into the supertanker business. Will never understand Gen Z. It's the Brew's Weekly News Quiz.

1. What is the name of the northern California utility that cut power across the region as a preventive measure?

2. We have a three-part question for you on Gen Z’s consumption habits. You can get one point per correct answer or 17,000 points if you get all three right.

1. Which platform do teens prefer for watching videos, Netflix or YouTube?
2. What’s the #1 restaurant among teens?
3. What is their most preferred clothing brand?

3. Fill in the blank: New research published in the Journal of the American Medical Association concluded that 20%–25% of U.S. health care spending is _________.

4. This week, Boeing said it would invest in Virgin Galactic to co-develop a hypersonic jet. What does hypersonic mean?

5. Name the company: I’m India’s second-most valuable startup. My founder, who is 25 years old, is spending $700 million to buy new shares. I renovate hotels and train staff in exchange for a cut of every booking.

Answers: 1) Pacific Gas & Electric or PG&E 2) a. YouTube b. Chick-fil-A c. Nike 3) wasted annually 4) Traveling at least 5x the speed of sound 5) Oyo

WHAT ELSE IS BREWING

• Walmart’s (+0.57%) U.S. President and CEO Greg Foran is stepping aside to lead Air New Zealand.
• Mary Barra, the CEO of GM (+1.52%), is taking a more active role in labor negotiations as the UAW strike rolls on.
• Fidelity joined TD Ameritrade, E-Trade, and Charles Schwab in eliminating commissions on U.S. online trades.
• The IRS issued its first formal cryptocurrency guidance Wednesday to mixed reviews from the industry.
• Simone Biles clinched her 5th all-around gymnastics world title yesterday after leading the U.S. team to gold Tuesday.

BREAKROOM

Friday Puzzle
If five = four, six = nine, and seven = five, what does twelve equal? Spend a little time with this one and you'll be rewarded.

Breakroom Answers

fIVe = four, sIX = nine, seVen = five, and tweLVe = 55

Source: NPR