Wednesday, May 6, 2020

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  • Massive fire shoots up UAE high-rise tower; multiple injuries reported
    Massive fire shoots up UAE high-rise tower; multiple injuries reported
    SPONSORED BY
    		UBS
    Good morning. Yesterday, Elon Musk and Grimes welcomed the birth of a son who is maybe named X Æ A-12? Either way, he begins his first shift at SpaceX on Monday.

    MARKETS


    NASDAQ
    8,809.12
    + 1.13%
    S&P
    2,868.44
    + 0.90%
    DJIA
    23,883.09
    + 0.56%
    GOLD
    1,713.80
    + 0.03%
    10-YR
    0.663%
    + 2.30 bps
    OIL
    25.01
    + 22.66%
    *As of market close
    • Energy: U.S. oil prices extended their winning streak for a fifth straight day with a razzle-dazzle trading session. The hope is that lockdown restrictions will gradually wind down and people will need fuel to get moving again.
    • Markets: The economy remains a disaster zone yet stocks keep climbing. Chicago Fed President Charles Evans said it’s “reasonable” to expect economic growth in the second half of the year, but that’s far from a guarantee.
    Francis Scialabba
    After reporting earnings yesterday, Disney might be looking to downgrade from castle to fifth-story walkup. Revenue for the quarter edged out expectations at $18 billion, but COVID-19 cost it $1.4 billion in operating profit. 
    Bottom line at the top: COVID-19 has caused “considerable disruption,” but keep in mind Disney was reporting the quarter ended March 28. This quarter is expected to be worse.

    The foot traffic

    Revenue in Disney’s parks segment fell 10% to $5.5 billion while operating income dipped 58%. Execs pegged COVID-19 losses at $1 billion. 
    • The parks division was the company's profit driver before. Now, it’s feeling like an anchor. 
    Disney’s attractions in Asia felt COVID-19 earlier, with parks in Shanghai and Hong Kong closing down in late January.
    • But as things return to “some semblance of normalcy in China,” the reopening of Shanghai Disney on May 11 could provide clues as to how parks will bounce back elsewhere. 
    • Disney will limit attendance and practice containment measures including masks, temperature screenings, and contact tracing.

    The eyeballs 

    Revenue in Disney’s Direct-to-Consumer & International segment was a bright spot, growing to $4.1 billion last quarter from $1.1 billion a year earlier. No fairy godmothers there, just the addition of streaming platform Disney+, which now has 54.5 million subscribers—an increase of more than 20 million since the quarter ended.

    Big picture

    Prior to the pandemic, Disney was coming off a remarkable year, but the last few weeks have stung. It furloughed 100,000+ workers and delayed major releases. One analyst estimates it’s losing at least $30 million a day.
    While brand affinity is as strong as ever...Disney was built around Dole Whips, not La-Z-Boys. Lightshed Partners’ Rich Greenfield downgraded Disney stock ahead of earnings, noting “Disney is built on shared group experiences. Until there is global comfort health-wise with that behavior again, Disney’s earnings are fundamentally impaired.”
    + For more background on Disney, read our 4-minute history of the company.
            

    FOOD

    When There's a Meat Shortage, It's Good Not to Sell Meat

    Get your spatulas and Steve Miller Band, it’s time for burger news. The big takeaway? The coronavirus-related meat shortage is a boost for some and food poisoning for others.  
    First up is Beyond Meat. The plant-based meat company beat top and bottom-line expectations in earnings reported yesterday. 
    • Beyond may be plant-based, but Q1 net sales of $97 million packed plenty of protein. Its stock has jumped more than 85% since mid-March. 
    • The company is angling to benefit from animal meat’s woes. Founder Ethan Brown told Yahoo Finance, “this is the industry’s moment.” 
    Rival Impossible Foods agrees. Grocery chain Kroger, which had to limit meat purchases per customer to deal with the shortage, inked a deal to sell Impossible Burgers in 1,700 stores. 

    As for traditional meat purveyors...

    They're purveying less meat. Yesterday, Wendy’s announced some menu items aren’t available due to the meat shortage. To clarify that “some,” 18% of Wendy’s U.S. restaurants are not serving meat-based items, the financial firm Stephens estimates.
            
    Francis Scialabba
    Step 1: Flatten the curve. Step 2: Resume blows with your favorite punching bags. Yesterday, California sued Uber and Lyft for allegedly failing to reclassify contracted workers as employees under AB5, a new law that went into effect in January. 
    • AG Xavier Becerra is accusing the ride-hailers of depriving drivers of the minimum wage rights, overtime pay, and other benefits they'd be entitled to as employees. 
    • The lawsuit seeks millions in penalties and unpaid wages for drivers. 
    The backstory: After AB5 went into effect, Uber, Lyft, and other gig economy companies refused to comply, then went on the offensive.
    • They started talking to lawmakers about creating a new category of workers, essentially contractors with benefits. 
    • Uber and Postmates filed a lawsuit challenging AB5. And gig companies poured $100+ million into a November ballot measure that would exempt them from the law. 
    Looking ahead...legal battles will be a problem for another week, since Lyft reports earnings this afternoon and Uber's up tomorrow. Both are teetering from the pandemic. Lyft recently announced plans to lay off 17% of workers, and Uber is reportedly considering a 20% reduction in headcount.
            

    SPONSORED BY UBS

    Get in on These Insights

    UBS
    As our crafting, pottering, puzzling, cooking, bird-watching, and crocheting has proven, we are no experts. So when an expert is spotted in our midst, our little ears perk up like our poor dog who we tried and failed to groom. 
    Enter UBS: The investing and banking powerhouse who has deemed the Brew faithful worthy of their Investor Sentiment Survey.
    On this thankfully simple yet comprehensive page, you’ll learn quite a few things about how the world’s best investors are viewing our current situation:
    • 32% of investors say it’s a good time to buy stocks
    • 33% even plan to invest more during this time
    • 78% of US investors have a positive long-term outlook on the economy
    Nice to have a little sunshine between all the doom and gloom. Exhibit A: While concerns over the pandemic’s effect on the economy still loom large, UBS also found that 24% of business owners polled will continue to hire. Music to a business newsletter’s ears.

    ECONOMY

    State Reopening Tracker

    Reopening tracker2
    Jenny "Kahlo" Rothenberg/Samir "Monet" Sheth
    Green: Green means go...with extreme caution. Governments have allowed many nonessential businesses to reopen (with heavy restrictions) in these states.
    Yellow: Restrictions will start to ease in the next week or two. 
    Blue: Broader reopenings have a slightly longer timeline than the yellow states, but there's movement and already some easing of lockdowns.  
    Gray: These states are still watching, waiting before putting more aggressive opening plans into place. 
    Important to note...just like U.S. states aren't easing restrictions at the same time, neither are local jurisdictions within those states. Pennsylvania, for example, has a color-coded system that guides strategy. 
    Also important to note...COVID-19 cases are still rising outside of the NYC metro area, and experts warn reopenings could lead to a surge in cases.
    Production Club
    You’ll take it any way you can get it. The neon-clad raver community is finding creative ways to vibe while respecting social distancing. 
    In the U.S., LA design studio Production Club created the Micrashell, a post-pandemic form of concertwear. 
    • How it works: The suit goes on the top half of your body, can be disinfected, and features a ventilation system and an audio setup that lets you mute people IRL. Production Club plans to partner with venues to distribute the suit and ensure epidemiologically responsible vibing. 
    In Germany, ravers are simply doing what nature intended—going to raves, in their cars. At drive-in raves in Schüttorf, Lower Saxony, partygoers could listen either to the stage soundsystem or tune in to an internet broadcast. 
    • Attendees showed their appreciation for the DJs by laying on their horns. Yes, it was a bizarre scene.
    Online, rave culture is flourishing in the absence of physical music festivals. Here's a list of upcoming EDM live streams.
            

    WHAT ELSE IS BREWING

    • Airbnb is laying off a quarter of its employees as it braces for a revenue drop to 50% of 2019 levels. 
    • Norwegian Cruise Line said it might seek bankruptcy protection and warned there is “substantial doubt” about its future as a company.
    • Starbucks expects to open 85% of its U.S. stores by the end of this week.
    • U.S. household debt increased to a record $14.3 trillion in the first quarter of 2020. 
    • Pickup trucks outsold sedans in the U.S. for the first time ever in April.
    • An interior design service was launched...in the video game Animal Crossing: New Horizons...offering more than $50/hour...

    BREW'S BETS

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    Water you still drinking tap water for? That pun was low-hanging fruit—but not as low-hanging as the fruit-infused and delicious Hint Water you could be getting delivered straight to your door. Brew-favorite flavors include Blackberry and Peach. Only $1 per bottle and free shipping for new customers.*
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    Two fun blogs: 1) The best images from Google Street View and 2) the so-called largest product placement database on the internet
    For Potterheads: Listen to famous fans of the Wizarding World, including some of the character actors themselves, read chapters from Harry Potter and the Sorcerer's Stone here or on Spotify. This week, Daniel Radcliffe’s reading “The Boy Who Lived.”
    *This is sponsored advertising content

    GOOD BOY TRIVIA

    For the 29th year running, one dog breed was named the most popular in the U.S. by the American Kennel Club. What’s the breed? And if you’ve got some extra time, can you guess the top 10?

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    GOOD BOY TRIVIA ANSWER

    1. Labrador Retriever
    2. German Shepherd
    3. Golden Retriever
    4. French Bulldog
    5. Bulldog
    6. Poodle
    7. Beagle
    8. Rottweiler
    9. German Shorthaired Pointer
    10. Pembroke Welsh Corgi
    May 06, 2020 Read in Browser
     
    May 06
    Sigmund Freud
    FEATURED BIOGRAPHY

    Sigmund Freud

    ALSO BORN ON THIS DAY
    1915
    Orson Welles
    American actor, director and writer
    1961
    George Clooney
    American actor and director
    1856
    Sigmund Freud
    Austrian psychoanalyst
    1953
    Tony Blair
    prime minister of United Kingdom
    1758
    Maximilien Robespierre
    French revolutionary
    1895
    Rudolph Valentino
    American actor
    SEE ALL BIOS ON THIS DAY
    MORE EVENTS ON THIS DAY
    the cast of Friends
    2004: The final episode of the television sitcom Friends aired and was watched by more than 52 million viewers.
    Marlene Dietrich
    1992: German American actress Marlene Dietrich—whose beauty, voice, aura of sophistication, and languid sensuality made her one of the world's most glamorous film stars—died in Paris. [Take our women in classic cinema quiz.]
    George Clooney in Up in the Air
    1961: American actor George Clooney—who emerged in the 1990s as a popular leading man, known for his good looks and versatility, and who later became a respected director and screenwriter—was born. [Sort fact from fiction in our actor quiz.]
    Roger Bannister
    1954: Roger Bannister of Britain became the first athlete to run a mile in less than four minutes.
    Tony Blair
    1953: British Labour Party leader Tony Blair, who in 1997 became the youngest British prime minister since 1812, was born. [Test your knowledge of British culture and politics .]
    Corregidor Island
    1942: The American garrison on Corregidor Island, under the command of General Jonathan M. Wainwright, surrendered to Japanese invaders after a 27-day standoff during World War II. [ Do you know your World War battles?]
    SEE ALL EVENTS ON THIS DAY
         		 READ MORE
    		 
    Hindenburg
    FEATURED EVENT
    1937
    Hindenburg disaster

    READ MORE
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