TOGETHER WITH
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Good morning and Happy Festivus. Quick poll...does anyone actually celebrate the holiday? Would love to hear stories if you do.
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NASDAQ
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12,793.20
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+ 0.40%
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S&P
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3,690.58
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- 0.12%
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DOW
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30,075.00
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- 0.47%
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GOLD
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1,867.00
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- 0.84%
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10-YR
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0.920%
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- 1.60 bps
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OIL
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46.89
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- 2.25%
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*As of market close
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Markets: The S&P dipped
for the third straight day, and futures dipped some more after
President Trump posted a video saying he wanted Congress to amend the
$900 billion Covid-19 bill before he signed it. Keep reading for more on
that.
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Pardons: President Trump pardoned 15 people,
including former campaign aide George Papadopoulos and former Rep.
Chris Collins, who pleaded guilty to charges of conspiring to commit
securities fraud.
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Francis Scialabba
On Monday, Reuters reported
that Apple's self-driving car unit, in the shadows for years, is
revving up to produce an electric passenger vehicle by 2024. The Silicon
Valley colossus reportedly plans to implement innovative new battery
tech to maximize range and minimize cost.
The takes were swift and they were hot
The bears were perhaps best summed up by Barron’s Senior Writer Al Root, who wrote,
"making cars is hard." The iCar haters say no amount of sleek
minimalism can make up for the vast capital and manufacturing capacity
it takes to churn out automobiles.
- It took 17 years for Tesla to turn a profit making cars.
- Skeptics of the move also pointed to the lower profit margins and valuations in the auto industry compared to tech.
Root
suggested it would be wiser for Apple to pursue the route Alphabet's
Waymo has taken: developing self-driving tech to sell to automakers.
Apple hasn't ruled out that approach.
The bulls argue that while auto manufacturing takes a lot of cash, Apple is the rare company that has...a lot of cash ($192 billion at last count). Also, Apple investors are used to eye-popping growth—to keep its stock price on a roll, Apple needs to pursue new markets.
- As for manufacturing logistics, Apple has managed to reliably move its products from factories to consumers, the bulls say, while Tesla hasn't always checked that box.
- Plus...you know you want to see what that design team comes up with.
Zoom out: While
we don't have a final verdict on the Apple car, we know it would be a
challenge to Tesla. The EV maker's shares slid in its first two days in
the S&P 500 index, and Morgan Stanley analysts wrote
that the news of Apple's entry was "perhaps the most
credible/formidable bear case for Tesla's stock that investors have had
to consider for some time."
Tesla CEO Elon Musk seems ready for a fight. He tweeted
yesterday that when the Model 3 was floundering, he approached Apple
CEO Tim Cook about an acquisition at about 10% of Tesla’s current price.
Cook “refused to take the meeting,” Musk said.
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Know Your Meme
Last night, in a video posted to Twitter, President Trump criticized
the $900 billion relief package Congress passed on Monday, calling it a
“disgrace” and saying it has “almost nothing to do with Covid.” It
wasn’t clear whether he would sign it.
Trump’s
opposition was a complete surprise. The president had stayed on the
sidelines of negotiations as a bipartisan group of lawmakers compromised
on a bill that would provide relief to Americans and businesses
suffering from the pandemic.
- The highlights of the
package were more than $300 billion for small businesses, direct
payments of up to $600 for individual Americans, and added unemployment
insurance until mid-March.
That wasn’t enough for Trump
The
president said, “I am asking Congress to amend this bill and increase
the ridiculously low $600 to $2,000, or $4,000 for a couple.”
Democrats...don’t
hate it. Having fought for a more generous bill in the first place,
House Speaker Nancy Pelosi tweeted, “Democrats are ready to bring this
to the Floor this week by unanimous consent. Let’s do it!” A vote on
$2,000 checks could come Thursday.
Zoom out: We don’t know yet whether President Trump will derail the bill. Aides told the WSJ
this statement was more Trump celebrating Festivus one day early by
airing his grievances, rather than a legitimate threat to block the
stimulus package.
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Francis Scialabba
Did you
spend yesterday afternoon sneaking in one last batch of Christmas
cookies instead of answering emails? Let's catch you up on the most
important numbers from the news.
2.2+ million: The number of people globally who have been vaccinated against Covid-19, per Bloomberg estimates. In the U.S., we're at 614k and counting.
115,000+: Americans currently hospitalized with the coronavirus. Covid patients are straining healthcare systems across the country, and almost one-fifth of hospitals with ICUs have filled 95% of beds.
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0%: ICU capacity
in SoCal. The U.S.' most populous state could add 300,000 new cases
this week, and some projections say it's headed to 90,000
hospitalizations.
88.6: The December reading of U.S. consumer confidence, which fell sharply from November. It's a sign of consumer pessimism during what is a crucial season for retailers, airlines, and restaurants.
-2.5%: The change
in existing home sales in November, the first monthly dip since May.
Sales are still up over 25% annually, and average home prices have
gained nearly 15%.
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Wallpaper Flare
This story
is dedicated to all readers crippled with fear because your girlfriend's
present hasn't left the warehouse in Kentucky yet. You are not alone:
USPS is struggling to keep up with deliveries ahead of Christmas.
The key number: Foot traffic fell 39%
annually at U.S. retail stores on "Super Saturday," aka the Saturday
before Christmas. That doesn't mean people are buying fewer gifts...it
means they're buying them online, putting further strain on an already
strained delivery system.
On top of the e-commerce surge, the USPS is facing a double whammy of other challenges:
- FedEx and UPS limited
shipments from some retailers earlier this month. USPS has been picking
up the slack and handling an average of 6 million extra packages per
day.
- At the same time, its
workforce has shrunk due to Covid. Almost 19,000 of USPS's 644,000
employees have called in sick or are isolating because of the
coronavirus.
Truth: "This year can't end fast enough," Jennifer Lemke, the clerk craft director at APWU Local 170 in Ohio, told the Washington Post.
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Giphy
Looking to
stave off the Covid holiday blues, millions of Americans are making
space in their home for a bushy balsam fir. But this year, they may have
had trouble finding the perfect one.
Christmas tree grower associations have reported that earlier purchases and increased sales this year are sapping inventory (the National Christmas Tree Association says it's not a shortage, just a tight supply).
- In Hong Kong and Singapore, customers have queued up for hours to get one, and 6' trees are selling for $1,500 a pop—around 8x last year's prices.
- "Knee-high bundles of branches shaped like trees are going for $100 apiece," the WSJ reports.
One explanation: the recession
But not the one fresh on your mind. After the 2008 financial crisis, trees were plentiful and prices fell, so some farmers planted fewer trees. Because a Christmas tree typically takes 8–12 years to mature, those reduced plantings = today's supply crunch.
- The accompanying price
increase has been a rare boon for farmers. One Oregon farm estimates a
30% rise in tree prices over the last four years.
+ While we're here: Wirecutter's recommendations for the best artificial holiday trees.
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The DOJ sued Walmart over its alleged role in the U.S. opioid crisis.
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Media holding company IAC plans to spin off video software company Vimeo, which was last valued at nearly $2.8 billion.
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The SEC sued cryptocurrency company Ripple and two of its execs for allegedly violating investor protection laws.
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Group Nine Media, which owns brands including Thrillist and NowThis, is forming a SPAC to add more publications under its umbrella.
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President-elect Joe Biden will reportedly nominate Miguel Cardona, the head of Connecticut's public schools, to become Secretary of Education.
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Do re mi: Your first name doesn't have to be Wolfgang for you to make some sweet, sweet music. Here is some mindless audio fun.
Read:
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- Spence recently joined Business Casual to discuss Big Tech antitrust issues, including his own company’s scuffle with Google. Give it a listen.
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Oregon, North Carolina, Michigan, Pennsylvania, Wisconsin, and Washington are the top six states for producing which item?
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Christmas trees
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