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MARKETS

  • Economy: If it's the first Friday of the month, that can only mean one thing: the monthly jobs report. Want to sound like an insider? Pay attention to wage growth.
  • Rates: The Bank of England raised interest rates to their highest level since 2009, noting that a first-quarter slowdown in the UK's economy was probably only temporary.

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TECH

Apple Joins the Four Comma Club

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The countdown to a $1 quadrillion market cap is ON.

Okay, maybe we're getting ahead of ourselves a little, but Apple did just become the first U.S. company to top $1 trillion in market cap yesterday.

And in honor of hitting a totally arbitrary but very cool number, we're going to do a really quick recap of how Apple (+2.92%) became the juggernaut it is. Ready? Let's time travel.

1976: Steve Jobs and Steve Wozniak (alongside a guy named Ronald Wayne) found the company. Their first product: the Apple I computer, built by Wozniak.

1984: Apple launches the Macintosh personal computer. And if you were watching Super Bowl XVIII, you would have seen an iconic commercial introducing the product.

1985: There's a power struggle between Jobs and CEO John Sculley. Steve Jobs resigns and founds hardware and software maker NeXT.

*Montage of Apple getting beat up by Microsoft and itching for a change...

1997: Apple buys NeXT and brings back Steve Jobs, who becomes interim CEO. Jobs later said the company was 90 days from going bankrupt then (it was worth less than $3 billion in 1996).

1998: This is where things get fun. Apple releases the colorful iMac computer, designed by the legendary Jony Ive.
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2001: Well, hello iPod. And hello first Apple stores in Virginia and California.

*Montage of Apple releasing the iTunes Store, iPod mini, iPod shuffle, MacBook, and more...

2007: Up until this year, there was no such thing as an iPhone. Then, Steve Jobs takes the stage at the Macworld Expo, gives this presentation, and ushers in the smartphone era. Apple is worth $73.4 billion.

2011: Steve Jobs dies after a battle with pancreatic cancer. He is succeeded by the current CEO, Tim Cook. Apple also passes ExxonMobil as the world's most valuable public company.

2018: As global demand for smartphones peaks, Apple looks for other revenue sources to maintain growth. Services (Apple Music, App Store, Apple Pay, etc.)...it's your turn in the spotlight.

MEDIA

The Weather Report for CBS’s Q2 Earnings: Cloudy

That cloud is CEO Les Moonves, who has been accused by six women of unwanted sexual advances over the course of a few decades.

We'll get to him, but first let's talk company performance: CBS (-1.42% after hours) had a sunny quarter, beating top and bottom line earnings. It also said it expects to have 16 million subscribers on its streaming services—CBS All Access and Showtime's direct-to-consumer platform—by 2022.

Okay, back to Moonves

He participated in the earnings call, but didn't address the allegations. And the analysts? They didn't bring them up either.

What it means, per Axios's Sara Fischer: "In letting Moonves lead the call and take questions from investors, CBS sent Wall Street a clear message: He's not going anywhere, for now."

The latest on the investigation: As part of its probe, the CBS board hired two law firms to dig into the allegations.

Further reading: Learn about the "Weinstein Clause," Wall Street's latest response to #MeToo.

AUTO

Fuel Efficiency Standards Could Get Smoked

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The Trump administration is proposing to freeze fuel efficiency standards in 2020 to ease regulations for automakers...and picked a fight with California in the process.

Zoom out: Fuel efficiency standards played a major role in President Obama's efforts to fight climate change. They required all new cars sold from 2025 on to average 50 miles/gallon.

So what's the change? Trump's plan would ease those fuel efficiency targets through 2020, at which point they'd be held steady for six years. The new target: 37 miles/gallon for new cars by 2026.

  • The argument: New, more efficient cars will be more expensive. If consumers can't afford those new cars, they miss out on improved technology that makes roads safer.

The plan also takes aim at California, which was allowed to play by its own (stricter) auto emissions rules.

  • That...didn't go over well. California Governor Jerry Brown called the proposal "a betrayal and assault on the health of Americans everywhere." And nineteen states and D.C. said they intend to sue over the change.

What it means for automakers: More flexibility, especially when gas-guzzling SUVs and trucks account for ~60% of the U.S. auto market.

C-SUITE

U Mad Bro? Scotts Miracle-Gro CEO Goes Off

*Warning: The following story is rated PG-13 for language and poor financial performance.

As one high-strung CEO learns some manners, another gets, uhh...blunt.

Scotts Miracle-Gro (+0.01%) boss Jim Hagedorn aired a few frustrations (and let a few expletives slip) in a conference call this week. His beef? Scotts's cannabis-growing subsidiary Hawthorne Gardening isn't meeting financial goals.

  • Some context: Hawthorne is in the process of acquiring Sunlight Supply...and it's not expected to meet Scotts's self-imposed growth targets for a while.

Here's a sampling of Hagedorn's most impassioned quotes as he got very real, very fast.

  • "Hawthorne's on their own long-term plan and they're clearly off their first year."
  • "And, dude, those bastards [at Hawthorne] are gun-shy as s--- right now, OK...I'm just telling you real-time, living my life."
  • "When people ask me what do you think about those numbers that came back from Hawthorne, I said 'it's a f---ing negotiation' – sorry for the language. It's a f---ing negotiation and they're gun-shy at the moment...do not over-commit. Our credibility matters."

STOCKS

A Big Day for IPOs

This summer's proven that, like eggnog or the McRib, there's a season for everything. An early-2018 IPO slowdown gave way to a surge of high-flying initial public offerings (read: Spotify, Dropbox, DocuSign), and two more rang the bell yesterday.

First on the docket? Sonos, the high-brow speaker company now trading under the ticker "SONO" on the NASDAQ.

  • Shares opened at $16, valuing Sonos at ~$1.5 billion. And it seems like day 1 went well...shares rocketed higher 33% by the close.

Who else IPO'd? Commercial real estate giant Cushman & Wakefield, which raised ~$765 million in the offering.

  • Ticker "CWK" started trading on the NYSE at $17 a share.
  • It'll use the IPO proceeds for the very unsexy purpose of reducing debt and addressing general corporate expenses.

Cushman stock jumped as much as 7% early in the day before closing up 5%.

QUIZ

The Brew's Weekly News Quiz

Nothing like reading a week's worth of business news...and then reliving it all over again. See how closely you read the Brew this week by answering the following questions:

1. Which of these did not happen to Chipotle on a disastrous National Avocado Day?

  1. Its app and website crashed for some customers
  2. People got sick after eating at an Ohio store
  3. It had to borrow guac from Qdoba after running out
  4. Fraudsters offered fake social media ads for free gift cards

2. Fill in the blank: According to new research by Richard Kerby, 40% of venture capitalists ________.

3. Who is this guy and what did he do this week?
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4. True or false: Per new research, ride-hailers decrease the amount of congestion in major cities.

5. What is the most common land use in the 48 contiguous U.S. states?

a) Urban b) Cropland c) Pasture/range d) Timberland e) Walmarts

6. Extra credit....What company am I?

  • I own a platform with over 3 million users.
  • I recently paid back an emergency loan of $6.2 million, which I received after my service hit an outage.
  • My stock price currently sits below $1.

Answers: 1) It did not have to borrow guac from Qdoba after running out 2) Attended Harvard or Stanford 3) Virginia Senator Mark Warner, who rolled out a blueprint to regulate Big Tech 4) False 5) Pasture/range 6) Helios and Matheson Analytics, the parent of MoviePass

WHAT ELSE IS BREWING

  • Brookstone filed for Chapter 11 bankruptcy and said it'll close all 101 of its mall stores due to a "continued deterioration of traditional mall traffic."
  • Papa John's (+0.21%) founder and ex-CEO John Schnatter told CNBC he has "no confidence" in the new management team that took over following his ouster.
  • Cisco (+1.60%) will pay $2.35 billion to acquire Michigan-based cybersecurity firm Duo Security.
  • AIG shares fell more than 5% after hours after missing earnings. Profit fell 17%, and it seems like its restructuring plan has a long way to go.

BREAKROOM

LET US PLAN YOUR WEEKEND

  • Drink: For all readers 21+, there's nothing more refreshing on a summer weekend than Anyday Rosé, a crisp blend of West Coast apples, rosé wine and cascade and citra hops.
  • Watch: The top 100 best TV episodes of the century, as compiled by The Ringer. Some of these will bring back memories...
  • Listen (or read): The WSJ and The Information unearthed a 2008 interview with Steve Jobs, right after the release of the App Store. Little did he know what would happen yesterday.

BRAIN TEASER
Here's a fun one from puzzle wizard Will Shortz: Name a person with a certain kind of disorder. Drop the first two letters and the last letter of the word, and you'll name a country. What is it?

(Answer located at bottom of newsletter)

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Breakroom Answers


Brain Teaser
pyromaniac ---> Romania

 

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