Your move, Canada

MARKETS

  • U.S. markets: Hear that bull market roar. The Nasdaq climbed over 8,000 for the first time ever, and the S&P 500 also hit a new record on the U.S.-Mexico trade news. For that, you'll have to read on...
  • More trade: The Trump administration said it'll pay U.S. farmers $4.7 billion to offset the negative impact of ongoing trade tensions. The USDA was authorized in July to offer up to $12 billion in aid to the agricultural industry.

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TRADE

The U.S. and Mexico Shake Hands on Trade

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In: The United States-Mexico Trade Agreement

(Probably) out: NAFTA

Still missing: Canada

We'll explain. President Trump announced that the U.S. and Mexico agreed to a preliminary trade deal. That means that NAFTA, the free trade agreement instituted in 1994, could be on its way to the junkyard.

Anyone have questions?

Okay that's a lot of hands...let's take it one at a time.

What happened to Canada? It wasn't involved in these negotiations, but right now the ball is in its court to hash out differences with the U.S. and join the pact.

  • Maybe a start: President Trump spoke with Canadian Prime Minister Justin Trudeau over the phone, agreeing to "continue productive conversations.”
  • Still, getting Canada on board will be anything but straightforward, given President Trump's repeated attacks on its trade practices.

What's in the agreement? In case you don't want to dive into the fact sheet (it's the perfect beach read), here are a few of the provisions:

  • Autos: The new deal will require at least 75% of auto content to be sourced in North America in order to qualify for zero tariffs (the current level is 62.5%). Plus, 40%-45% of auto content must be made by workers earning at least $16/hr (that could boost wages in Mexico, where workers earn less than $3/hr on average).
  • Digital trade: Unsurprisingly, the original NAFTA didn't have much to say about digital products like e-books, software, videos, etc., so this deal modernizes the language on those goods.
  • How long it'll last: 16 years, with a review penciled in every 6 years.

Does Congress get to have a say? Oh yeah. Each country's legislature will need to sign off for any pact to become a reality...and it won't be easy to get the votes here in the U.S.

What are the main takeaways here? 1) Renegotiating (or scrapping) NAFTA was a big part of Trump's pitch on the campaign trail, so he'll consider this a promise fulfilled 2) Business groups are relieved that some progress has been made but... 3) The participation of Canada and the reception by Congress are both huge question marks.

+ Trade fact of the day: Canada and Mexico are the top two destinations for U.S. exports of goods.

AUTOS

Uber and Toyota Show Self-Driving Is All About Partnerships

Another Monday, another deal in the self-driving car space. This time, Toyota (+2.95%) is investing $500 million in Uber to utilize its autonomous software in Sienna minivans. The valuation? A new high for Uber at $72 billion (up 15% from its last deal).

Remember: For Uber, the path to an autonomous nirvana (when it won't have to pay drivers) hasn't been easy.

  • In March, one of Uber's self-driving vehicles struck and killed a pedestrian in Arizona...which slowed the program's progress to a crawl.

It also hasn't been cheap: The self-driving unit was losing Uber $100 million to $200 million a quarter.

But enough about Uber...what's Toyota's play?
Compared to other traditional automakers, it's been slow to put a robot behind the wheel (in 2016, GM invested $500 million in Lyft to co-develop self-driving cars).

But here's a life hack: Give yourself an artificial deadline, and you'll get things done. Tokyo's hosting the Olympics in 2020, so Japan-based Toyota is really hoping to debut a self-driving car by then.

TECH

Apple’s Next Big Reveal Shouldn’t Be Revelatory

Hope you like the feel of the iPhone X...because, aside from a few tweaks, Apple's (+0.82%) betting big on that design.

Per Bloomberg, Tim Cook's team is prepping for a September release of three new phones, all of which are expected to keep the edge-to-edge screen design and Face ID tech of the iPhone X.

What's new? Prices, features, and sizes. Look for...

  • A high-end iPhone with a 6.5-inch display (making it the biggest iPhone yet) and the capacity for viewing content side-by-side in apps like Calendar and Mail.
  • An updated iPhone X with better processing speeds and camera specs.
  • A cheaper phone that'll come in several colors and trade in stainless steel casing for aluminum casing.

Zoom out: With global demand for smartphones leveling out, Apple's banking on the fact that you're *still* willing to fork over north of $1,000 for their flagship product.

  • Remember, the average selling price of an iPhone last quarter was $724, up 19% annually.

RETAIL

J. Crew’s Getting a New Look

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J. Crew, a brand once reserved for Kennedy-wannabes, is pivoting from Midtown Manhattan to Middle America to reverse 15-straight quarters of slumping comparable sales.

The numbers at J. Crew are, well, bleak ahead of earnings today. It's carrying ~$1.7 billion in debt, plus it closed dozens of stores last year and hemorrhaged market share. Even the mannequins are looking for new gigs.

J. Crew's subsequent turnaround strategy is two-pronged, CEO Jim Brett told the WSJ.

  • First, make prices more affordable. Basic tees started at $29.50 at J. Crew last year—now they start at $14.50.
  • Second, make sure sizing includes more people by extending women's sizes up to 24 and adding more fits. FYI, Plunkett Research estimates 68% of American women now wear a size 14 or larger.

Big picture: J. Crew may be the latest, but retailers from Target to Nordstrom to REI have been forced to look in the mirror and better cater their offerings to the everyday American—not Kate Moss.

EDUCATION

Venture This: Like College, If College Were on an iPad

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This week, we're celebrating students heading back to school with features on education. Today, we'll give you the lowdown on a startup making waves...and then ask: would you invest?

This isn't your parents' Back to School Week (and we don't just mean trading in a slide rule for a TI-83). Thanks to streaming tech, just about anywhere can be a classroom.

Enter: Coursera, the online learning startup offering thousands of courses from computer science to creative writing—think mobile learning and online degrees, minus the major costs of in-person higher education.
The pros

  • Scale: 35 million learners. 150+ university partners. 4 degree programs. All on a platform Coursera says is for anyone, anywhere.
  • Momentum: Coursera was recently valued at $814 million. Plus, it has raised ~$210 million in eight funding rounds, with a crew of investors including GSV Asset Management, the Lampert Foundation, and Kleiner Perkins.

The cons

  • Competition: If you've ever struggled through high school chemistry, you've probably heard of Khan Academy. It's one of several other upstarts, including Udacity and edX, looking to become the next big thing in MOOCs (massive open online courses) and outpace Coursera.
  • Is it...effective? Brookings says there's little evidence to determine how taking a class online or in-person might change students' outcomes.

You've got the lowdown. So would you invest in Coursera?

WHAT ELSE IS BREWING

  • Seth Frotman, the top government official overseeing the student loan market, resigned in protest of the CFPB's current leadership.
  • Berkshire Hathaway (+1.24%) invested in the parent company of India's largest mobile payments firm, Paytm.
  • Legg Mason (+1.11%), an investment management firm, will pay the SEC more than $34 million to settle charges that its former subsidiary helped bribe Libyan officials.
  • A federal judge extended last month's ban blocking Defense Distributed from publishing the blueprints for 3D-printed guns.
  • CBS (+1.05%) is facing a class-action lawsuit alleging it misled shareholders by withholding details about sexual misconduct accusations against CEO Les Moonves.

BREAKROOM

BACK TO SCHOOL TIP
Become an active member of your campus community. How one reader explains it:

  • "Your educational experience is like running your own business. Networking is key. It may be frightening at first, but it pays off. Step into the classroom with confidence. Speak up when called on. Meet your classmates for lunch/coffee."

BACK TO SCHOOL TRIVIA
We're reminiscing about the good ol' days in Ms. Cherry's 1st grade class, when we started the day coloring outside the lines with a Crayola crayon...and finished it off with a scoop of Ben & Jerry's ice cream.

Which (naturally) leads us to this question: Each of the following is the color of a Crayola crayon or the name of a Ben & Jerry's ice cream flavor. Can you tell which is which?

  1. Banana Split
  2. Pink Sherbert
  3. Cotton Candy
  4. Pistachio Pistachio

(Answer located at bottom of newsletter)

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Breakroom Answers


TEXT
Back To School Trivia
1) Ben & Jerry's 2) Crayola 3) Crayola 4) Ben & Jerry's

 

This is a fucking gold political move. This will be big news for the forseaable future and if it doesn't make it through congress it is likely to get blamed on the democrats. It's almost as if Trump actually knows what he is doing.

Follow the shit your fellow monkeys say @shitWSOsays Life is hard, it's even harder when you're stupid - John Wayne
 

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