Why you gotta be so crude

MARKETS

• U.S. markets: Indexes got a slight boost ahead of President Trump's decision on the Iran deal.
• Earnings today: DISH, EA, Etsy, Match Group, TripAdvisor, Twilio, Disney, Wendy's.

COMMODITIES

A Crude Awakening for Oil

A perfect storm of basic economics and intense geopolitical pressures pushed oil prices to their highest level since 2014. And will you look at that, the budget for your gas-guzzling summer road trip has just tripled. Bon voyage!

First, the basic economics (aka supply and demand)

• After oil cratered four years ago, the oil-producing posse of OPEC and Russia decided they would cut supply to boost prices.
• Meanwhile, the world's major economies are all on the rise, demanding more fuel to fuel their growth.

But who are we kidding? The latest push is all about geopolitics

Let's start with the Iran nuclear deal.

Remember, in 2015 the U.S. and its allies relaxed sanctions on Iran. In exchange, Iran would dramatically limit its nuclear program. The agreement has been trashed by President Trump, who will announce whether the U.S. will remain in the deal at 2 pm today. Pulling out means the U.S. would re-apply sanctions (i.e. cut off business ties with Iran).

So here's why oil prices are all abuzz:

• The nuclear deal made it much easier for Iran, the third-largest producer in OPEC, to export crude oil.
• If sanctions 2.0 are anything like the original penalty, they could cause 1 million barrels a day to be removed from the global supply.

But while everyone's gossiping about Iran, don't forget about Venezuela

With a teetering government and a flailing economy, the once-proud oil producer went a little overboard with supply cuts. Its output dropped 5x more than OPEC-Russia had agreed upon (we're going to assume that wasn't intentional).

And Venezuela's plunging production could be the No. 1 shock to the market, one analyst told Bloomberg: "If you ask me what the biggest geopolitical disruption risk to oil supply between now and December, I would say Venezuela."

+ Two experts, who live and breathe petroleum, dissect how Trump's decision on the Iran deal will affect the oil market.

FINANCE

Paul Singer Eyes Athenahealth

When Elliott Management's Paul Singer isn't seizing Argentine Navy ships (for business, of course), he's writing strongly worded letters to corporate boards.

And yesterday, he sent one to healthcare tech firm Athenahealth, offering to buy the company for $6.5 billion.

Paul...what gives?
Well, when Elliott initially announced its 9% stake in Athenahealth last year, it agreed to remain relatively hands-off...so long as the struggling company got its act together. Apparently, it hasn't.

• Its stock has significantly underperformed compared to its industry peers.
• It's had five different CFOs in the last four years.

Now Singer is trying to take charge and Athenahealth is weighing the pros and cons.

Connecting the dots: Singer is possibly Wall Street's biggest bully. But he'll meet his match in Athenahealth's outspoken CEO, Jonathan Bush (George W.'s cousin). Last time he picked a fight, he said, "I didn't know 'Mean Girls' had a Wall Street edition."

Don't think he won't peg Singer as Regina George.

FOOD

A Three-Course Menu of Food Deals

Welcome to the M&A Grill, where we've got a trio of food-related deals that'll satisfy even the hungriest of conglomerates. Please tip your investment bankers.

Appetizer: International Flavors & Fragrances (-10.71%) acquired Frutarom for $6.4 billion to create a one-stop-shop for essential oils, extracts, and "Mountain Maple Bark" flavor.

Entrée: Nestle is paying Starbucks (-0.40%) $7.15 billion for the rights to sell its products around the world.

• For Starbucks, it's an opportunity to supply the caffeine needs of Nestle's global customer base (operating in 189 countries) and buy back shares.
• Nestle is in the process of ditching chocolate to secure its coffee empire. It's currently the world's top coffee company, but JAB Holdings is coming for the crown.

Dessert: Mondelez (-0.54%), the maker of Oreos and Sour Patch Kids, bought the crispy cookie wizards at Tate's Bake Shop for $500 million. It's hoping Tate's position in the "fast-growing premium cookie segment" will freshen up its stagnant offerings.

TECH

Microsoft’s Developer Conference: Day 1

Microsoft's Build developer conference kicked off yesterday. And while it didn't dive into dating like Facebook, Microsoft still gave the audience what they came for: Cloud, AI, AR/VR, drones, the works.

Remember: This is a critical turning point for Microsoft as it competes with Amazon and Google. Its recent reorg swapped its focus from legacy Windows to Cloud and AI. Ask anyone from the 90s...it's a big deal.

What you're really here to see—Microsoft's HoloLens update:

Good tech, full hearts, can't lose: "We are putting a $25 million grant...[to] use AI tech to solve some of the accessibility challenges out there."—CEO Satya Nadella is committed to using AI to help people with disabilities.

See @Elon Musk, AI isn't just here to take over the world. It can be used for good, too.

+ More highlights from the Build conference.

WHAT ELSE IS BREWING

• Apple (+0.72%) is getting pretty close to $1 trillion in market cap
• Air France-KLM stock dropped 9.83% after CEO Jean-Marc Janaillac said on Friday he would resign over a labor dispute.
• Fitbit (+0.81%) is introducing a feature that'll allow women to track menstrual cycles.
• Carl Icahn would consider a deal for Xerox (+0.28%) if it was at least $40 per share.
• Snap (+1.68% after hours) CFO Drew Vollero is stepping down in a week. He'll be replaced by Tim Stone, a VP at Amazon.

WATER COOLER

VENTURE THIS

Each Tuesday, we’ll let you know about a startup making waves. We’ll tell you about the company, pitching you the good and the bad. Then we want to hear from you. Would you invest?
We're not sure how to say this, but you're going to die...when you hear about Suki, the AI doctor's assistant. All the doc has to do is speak her notes out loud, and Suki will listen, transcribe, and document them. The only problem? You're not gonna like how much it's raised in total funding...you're gonna love it! Suki's raised $20 million.

Why we're crazy for Suki

• CEO Punit Soni. From Motorola to Google to Flipkart, Soni has the expertise and experience to take Suki to market.
• It's filling a need. Per an Annals of Family Medicine study, physicians spend more than half their day filling out and filing paperwork.

Why we're hesitating

• The tech. Sure, Soni will hardly break a sweat developing the baseline voice recognition tech. But doctors talk at their own pace, use different buzzwords, and employ different documentation systems. Good luck trying to diagnose that.
• If this did take off, how would Suki create a moat against Google or Amazon, which lead the voice recognition space?

But enough from us, we want to hear from you. Would you invest in Suki? Are you IN or OUT?

BREAKROOM

THEY SAID IT
Think you had a rough Monday? Crypto had it worse, being dragged through the mud by some of the most respected business minds out there.

Bill Gates: "I agree I would short it if there was an easy way to do it."

Charlie Munger: "To me, it's just dementia. It's like somebody else is trading turds and you decide you can't be left out."

AROUND THE WORLD
Welcome to Yazd, Iran. A central city and a home to strikes and labor protests against the government. Unemployment is now at 12% and prices of consumer staples are rising at about 10% a year.

Bottom line: Things could get worse with today's announcement on the status of the Iran deal.

BRAIN TEASER
A 4 by 4 square is unusual in that it is the only square, with integral (whole number) length sides, for which the area and perimeter are equal in value.

Find the dimensions of the only oblong (non-square rectangle) with integral length sides, such that the area is equal to the perimeter in value.

(Answer located at bottom of newsletter)

Breakroom Answers