TOGETHER WITH
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Good morning. This and next week at the Brew are all about audience participation (promise it'll be more fun than at an a cappella concert).
We have more
than 2 million smart, hilarious readers, and we want to showcase your
smartness and your hilarity to the entire Brew community. So, keep an
eye out for sections of the newsletter where you can contribute. For
example, today we're accepting submissions to create the Brew Crossword
for next Monday. Scroll down for details.
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NASDAQ
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10,745.27
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+ 19.76%
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S&P
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3,271.12
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+ 1.25%
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DJIA
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26,428.32
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- 7.39%
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GOLD
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1,994.00
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+ 31.18%
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10-YR
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0.535%
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- 138.50 bps
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OIL
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40.43
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- 33.95%
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*As of market close
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Markets: We summited the earnings
mountain last week with dozens of big names and are now on the way back
down, which should give stocks a bit of a breather. So far, reporting
S&P 500 companies performed better than expected in Q2 (though "expected" was a profit drop of more than 40%).
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Crypto: Bitcoin had itself an eventful weekend, rising above $12,000 before dipping slightly. It’s significantly outpaced gold and the major equities indexes this year.
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Francis Scialabba
This
weekend, it became clear that TikTok as we know it is coming to an end
in the U.S. Treasury Secretary Steve Mnuchin said yesterday there’s a general consensus among American leadership that “TikTok cannot stay in the current format” because of risks over Americans’ personal data.
- TikTok is owned by
Chinese tech company ByteDance, which could be compelled by law to hand
over user information to the Chinese government.
So what happens next?
There seem to be two options: 1) ban or 2) sell to an American company.
This weekend, President Trump said he was choosing door number one—banning Tiktok
from operating in the U.S. But...he didn’t, which adds further
speculation to the idea that his “ban” announcement was a negotiating
tactic to extract further concessions from ByteDance in the event of a
sale.
So what about a sale? Microsoft, which is as American as subscribing to too many newsletters, confirmed
last night it's been talking to ByteDance about acquiring TikTok's
service in the U.S., Canada, Australia, and New Zealand. The company
said it'll "move quickly" to reach a deal, and will finish up
negotiations by Sept. 15 latest.
What an acquisition would mean for Microsoft
It’s worth
noting Microsoft was the only member of “Big Tech” that was absent from
last week’s antitrust hearing. The company has focused on business customers rather than individual customers, and, with a market value of nearly $1.6 trillion, that’s been a pretty successful strategy.
A TikTok acquisition would change that. Yes,
Microsoft does have consumer-focused units already, most notably Xbox,
which reported 65% sales growth last quarter. But its recent
acquisitions—LinkedIn, GitHub, and a crowd of smaller startups to
support its cloud business—were a play for the enterprise segment.
- A deal for TikTok would put Microsoft in unfamiliar—but also exciting—territory. TikTok has only just begun to monetize its exploding user base.
Bottom line: With several Republican senators, including China hawks, comfortable
with a sale to an American company, the smart money is on Microsoft
pulling this one off. But the decision is President Trump's to make.
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The single
most important factor for the health of the global economy is how well
countries contain the virus. Here’s the latest…
The U.S.: not containing it well. White House coronavirus task force coordinator Dr. Deborah Birx told CNN yesterday the coronavirus is more widespread than before, impacting rural as well as urban areas.
Australia: Officials in the state of Victoria declared a “state of disaster”
yesterday after recording record numbers of new cases over the last
week. That means the city of Melbourne will be placed under a curfew
from 8pm to 5am for the next six weeks.
Norway: The first company to start up international cruises since they were all canceled reported 36 crew members tested positive for the coronavirus. Nearly 400 guests on two cruises have been asked to self-quarantine.
Vietnam: The country will test all 1.1 million residents
of the city of Danang after it was linked to a new outbreak. The number
of coronavirus deaths in Vietnam, a country of 95 million people,
remains in the single digits.
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Giphy
Bob Behnken
and Doug Hurley—the astronauts aboard SpaceX’s Dragon Endeavour
capsule—executed the world’s highest cannonball yesterday. They splashed down in the Gulf of Mexico off the coast of Florida after spending the last two-ish months aboard the International Space Station.
It’s a big deal, because rockets, SpaceX, Elon Musk, etc. But it’s also historic: This is the first time in 45 years that astronauts from any nation have returned to Earth via splashdown.
While any
homecoming from space is complicated, SpaceX and NASA had to contend
with the additional challenge presented by Tropical Storm Isaias, which
was lashing Florida’s east coast around the same time the craft landed.
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But if there’s one good thing about Florida...it’s a peninsula, so the astronauts splashed down on the opposite coast where the weather was much calmer.
Zoom out:
The astronauts’ safe return was the final step in certifying Musk’s
SpaceX to begin routine, operational spaceflights to the ISS. He had
this to say about it:
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Giphy
Now that August is here a clearer picture
of July’s #StopHateForProfit movement, in which 1,000+ brands including
Unilever, The North Face, Heineken, and Chipotle staged a public
advertising boycott of Facebook, is coming into focus.
It's just a flesh wound
On its earnings call Thursday, Facebook said ad revenue grew 10%
annually in the first three weeks of July. Zuck said, “some seem to
wrongly assume that our business is dependent on a few large
advertisers.”
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Some numbers: Throughout most of July in 2019, the top 100 advertisers on FB spent $251.4 million. In 2020, that number was 12% lower, according to data from Pathmatics.
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Some perspective: Facebook raked in $18.7 billion—with a “B”—in revenue in Q2. The top 100 spenders contributed 16% of those sales.
Bottom line: The leaders of the boycott said it won’t formally continue past July
because of the strain it puts on businesses that rely on the platform
for marketing. But the movement as a whole “will get bigger and broader”
until they feel Facebook takes meaningful action “to mitigate the
damage it causes.”
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Monday: ISM Manufacturing Index; earnings (Clorox, Tyson Foods, HSBC); 1 year anniversary of mass shooting in an El Paso, TX, Walmart
Tuesday: Earnings (Disney, Sony, Activision Blizzard, Planet Fitness); new Twilight novel
Wednesday: ADP
employment report; Samsung will unveil lots of new hardware at its
Unpacked event; earnings (Wayfair, New York Times, Square, Humana, Etsy,
Wendy’s)
Thursday: Jobless
claims; PGA Championship begins; earnings (Bristol-Myers Squibb,
ViacomCBS, Booking Holdings, Uber, Zillow, Adidas, Siemens, Nintendo,
Toyota)
Friday: July jobs report; earnings (Berkshire Hathaway)
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Marathon Petroleum
will sell its Speedway convenience store chain to the owner of 7-Eleven
for $21 billion. It would be the biggest corporate acquisition since
the pandemic began.
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Lord & Taylor, the U.S.' oldest department store, filed for Chapter 11 bankruptcy.
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Siemens Healthineers
(a German medical tech company, not a minor league baseball team)
agreed to buy Varian Medical Systems for about $16.4 billion.
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Eastman Kodak’s
executive chairman was granted options for 1.75 million shares last
Monday based on a previous “understanding” with the board, Reuters
reports. Those options are now worth tens of millions after last week’s
stock surge.
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MLB
drew much higher ratings for its first week than a year ago.
Commissioner Rob Manfred is determined to keep the season alive in spite
of some players testing positive for the coronavirus and others ghosting the Mets.
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Green may be gettin’ legalized; put some in your wallet. This little-known Canadian company
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legalization boom. If you want to get in on the green action, sign up
for Motley Fool Stock Advisor.*
Donation suggestions: Mackenzie
Scott (formerly Bezos) is the fourth-richest woman in the world and has
pledged to donate the majority of her wealth. She listed the 116 organizations she’s given back to already.
Quarantine idea: Build a labyrinth in your backyard. This guy is one of the world’s leading experts, or learn more about the labyrinth community here.
*This is sponsored advertising content
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On Mondays,
we'll present some of the thorniest business topics of the day, give you
a jumping-off point, and encourage you to debate it with friends,
family, and coworkers.
This week’s topic: As
Democrats and Republicans continue to debate a new round of COVID-19
relief, one point of contention is whether businesses should be held
liable if someone contracts COVID-19 on premise. For Senate Majority
Leader Mitch McConnell, a relief bill without liability protections is a
nonstarter.
- What they’re both arguing (Vox)
- Proving a business acted negligently won’t be that easy (NPR)
- More employers are requiring COVID-19 liability waivers anyway (Roll Call)
- How effective are liability waivers? (ABA Journal)
- The U.S. Chamber of Commerce and nearly 500 business associations say COVID-19 lawsuits could deter businesses from reopening (U.S. Chamber)
 Audience participation alert: Got
a controversial business topic you want to see covered in Start Talking
next week? Reply to this email with the topic and we'll select one from
a reader for next Monday's edition.
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Crossword lovers, read this: We are now accepting submissions for the Brew Crossword next Monday. The details:
Now onto today's puzzle...sample clue: prickly critter (8 letters).
Aug 03 - Matt Vespa,Kurt Schlichter,Scott Morefield,Gabriella Hoffman,Rachel Alexander and More
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| ADVERTISEMENT |
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Breaking News
| Michigan Asshole Award: Maskless GOP ‘Whitmer Hate |
| Mon, 03 Aug 2020 10:47:21 +0000 |
| PatriotsNews |
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| ADVERTISEMENT |
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| FEATURED EVENT
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| 1492
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| Columbus's first transatlantic voyage begun
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| FEATURED BIOGRAPHY
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| Stanley Baldwin, 1st Earl Baldwin of Bewdley
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August 03
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| MORE EVENTS ON THIS DAY
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| 1941: American entrepreneur and domestic lifestyle innovator Martha Stewart was born.
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