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Miscellaneous

Trick-Or-Treat: Stock Market Edition

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Everyone is coming back… from vacation and going back to school, work, or whatever else it is people do with their time. We had a good summer…scratch that – we had a great summer in the stock market. But before anyone gets too excited, I think this would be a good time to look at what could be in store for investors this fall.

 

Trade, trade, trade… yes, the global trade war still looms large and could be devastating to the markets. If trade tensions escalate, it could become difficult for businesses to get the materials they need. If prices are too high, executives could decide to cut back on spending. Reduced spending would be bad news for the economy and could even lead to a recession.

 

But we’re okay, for now… because the S&P 500 is up 8% and the Nasdaq up 17% this year. However, September has been hard on investors in recent memory, and the midterm elections could add to the September woes. Summer was hot for stocks – but the fall could be downright scary.

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International

Here’s more on JD.com (because we LOVE scandals)

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Trending on Weibo… which is China’s ‘Twitter’ so-to-speak where users are spreading CEO Richard Liu’s mugshot around like wildfire. Apparently, founding a multi-billion dollar company makes you very well-known in China, like a celebrity of some sort. In most other markets, this news would be uninteresting at best.

 

What makes JD.com so special… compared to its other competitors like Alibaba? Well, for one, the company vows to sell only authentic goods through its platform, and knock-off goods represent a significant problem that has plagued Chinese rivals for quite some time. JD.com is also freaky fast and delivers 90% of products within the first or second day they are ordered (remind you of anyone?).

 

From humble beginnings… which included Liu dreaming of eating meat because his family was so poor, they could only eat pork once or twice a year. When the future-CEO got into Renmin University, a high-ranking university in Beijing, his village donated 76 eggs and 500 yuan to send him there. Now, $7 billion later, is eating well and [allegedly] breakin’ all the rules!

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Fang

‘Big Tech’ takes on Washington

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Twitter and Facebook… will be represented in Washington on Wednesday as the companies appear before the Senate Intelligence Committee. And you can probably guess what this is about – foreigners using their platforms to ruin our elections in America. So this is nothing new, and don’t expect either stock to react much to this meeting.

 

But we will learn more… about how these companies are keeping our data secure and reliable. Keeping data safe covers everything from fake news to harassment on the platforms. And, of course, managing the so-called Russian trolls from spreading lies.

 

Jack Dorsey will be a busy man… because after meeting with the Senate Intelligence Committee, he will be meeting separately with the House Energy and Commerce Committee to address claims that Twitter is silencing voices of Republicans.  Who knew Twitter and Facebook were going to cause so much trouble!?

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Start-up

WeWork’s rent just went waaay up

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WeWork is currently… the second-largest renter in Manhattan only to JPMorgan. However, the company is looking to take on another 200,000 square feet and surpass the banking giant very soon. Not too shabby for a company that is just eight-years-old, right?

 

What do they do, exactly… well, WeWork offers tiered pricing for co-working spaces and can cost over $1,000 per month. A co-working space typically involves a shared workplace; but those co-working are not usually part of the same organization (i.e., single employees rent work space). Members can rent desks or entire offices. So you can see why the company needs the extra office space.

 

WeWork is valued at… around $20 billion and the company is looking to raise money that would value the company as high as $35 billion. WeWork is also expanding this idea with shared spaces for education (WeGrow), health and fitness (WeRise), and co-living (WeLive). All this after just eight years – you could say that WeImpressed…

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Blue Chip

Goldman Sachs is for the people!

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More than just a Wall Street bank… because Goldman Sachs has been reaching out to consumers like you and I, and the banking giant just introduced its new home improvement calculator. What does this mean? Well, it looks like Goldman Sachs is going to be giving out more home improvement and personal loans very soon.

 

You’ll find Goldman Sachs… under the company’s online Marcus brand, which launched in 2016. The company has been taking deposits on the banking side and looking to lend that money out through personal loans. Not a bad move either – the economy and job market are both doing well, and people are very willing to take on more loans.

 

What lies ahead for GS… possibly more consumer banking, as other parts of the business have been slowing down. The bank could expand into life insurance, mortgages, auto loans, and wealth management services – basically everything your current bank does. But in the meantime, GS will look to keep growing what they already have and lend more money. Anyone need a loan?

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Miscellaneous

More CEOs are behaving badly…

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You may have heard… that the CEO of JD.com, one of China’s largest e-commerce websites, was arrested in Minneapolis on Friday. But now the company is saying CEO Richard Liu was falsely accused of sexual misconduct and will return to business as usual. The police are still actively investigating the situation, so this may not be the last we hear about it.

 

You may be asking… why was this guy in Minneapolis, anyway? Apparently, Liu is a student at the University of Minnesota in a program for “top-level executives” working in China. So, not your typical university experience – the average age of the students enrolled in this program is 50.

 

JD.com is kind of like… the second-place Amazon of China, selling everything from appliances and apparel to groceries. The company also has some high-profile investors, including Walmart and Tencent, who combined hold 28% of JD.com. Liu himself owns 16% of the company but has 80% of the voting rights (so he calls the shots). The company is also moving west and plans to compete with Amazon in Europe by 2019. Another CEO [allegedly] behaving badly – what’s new?

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Mid caps

Why Kenmore is no more…

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In 2000… Kenmore was in every American household (or it seemed to be), and it was available exclusively at Sears. Heck, other appliance makers would create their best products and sell them with the Kenmore name instead of their own – that’s how big this brand was. However, the brand has seen better days, and Kenmore and Sears have been all but forgotten.

 

Now, Sears wants… someone, anyone, to buy Kenmore because the company needs money. There is one offer – Sears CEO Eddie Lampert will buy Kenmore from his very own company for $400 million. The company is still mulling over that offer, although it seems like a disappointing one given that the brand was valued at over $2 billion just 15 years ago.

 

Sears is now worth… just $150 million, and interestingly, the Kenmore brand is worth more than twice that. So as poorly as Kenmore is doing, Sears is doing much worse. But if you buy a Kenmore appliance, you should ask yourself – will Sears or Kenmore even be around when this thing breaks?

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Blue Chip

Coffee is better with a little ‘Coke’

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Coca-Cola is makin’ moves… last week we learned the beverage company went in on the sports drink BodyArmor, and now they have spent $5.1 billion for the UK coffee chain Costa Coffee. The acquisition will give Coke access to coffee vending machines, on-the-go outlets, and ready-to-drink iced coffee and beans from Costa Coffee’s roastery.

 

Now, they will sell everything… water, soda, sports drinks, coffee – you name it, Coca-Cola has it. Now, Coke can offer its food service customers, like restaurants and movie theaters, everything they need. Thus, rather than opening Costa locations in the United States, we may begin seeing the company’s products popping up here and there.

 

The move is more significant… in other countries, where Costa Coffee has a considerable presence. Costa has 4,000 stores across 32 countries in Europe, Middle East, Asia, and Africa. These physical stores will also allow Coke to sell their other products directly to customers, rather than going through grocery stores, gas stations, and other distributors. So you could say that finding Coke [products] just got a little easier…

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Miscellaneous

Better consider bringing a carry-on

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And only a carry-on… because checking your bag will now cost $30 instead of $25 with United Airlines. The second bag, if you need it, will cost $40 instead of $35. However, if you have the MileagePlus Premier status, you can continue to check your luggage for free. For the rest of us, just get through security with your “carry on.”

 

For the greater good… of all airline passengers because United plans to invest in the “overall customer experience” with the increase cost. And the company is offsetting their rising costs by charging passengers more. Not that you can blame them – many are expecting airlines to see a significant drop in profits for 2018.

 

This isn’t a coincidence… because fuel and labor costs have been climbing and eating airline profits. JetBlue, Air Canada, and West Jet all increased the price of checked bags in similar amounts. So your ticket won’t cost more – but everything that you pay for after buying your ticket will cost more. And despite rising costs, United stock is up 27% this year.

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Miscellaneous

Not just a Didi problem…

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Who knew getting into a strangers car… could be just downright dangerous? Didi Chuxing, a Chinese ride-sharing firm, is dealing with the rape and murder of a passenger that occurred in August. Also, in the past four years, 103 Uber drivers and 18 Lyft drivers have been accused of sexually assaulting or abusing riders. Can these issues be resolved, or is ride-sharing just dangerous?

 

More oversight is required… by the government to ensure that these services are safer. In ten years, we went from “never ride with strangers” to paying strangers to take us places. Uber transports about 15 million riders worldwide each day. With so many rides, while it is unlikely, you can see why these things happen and continue to occur.

 

Here are some ideas… including allowing female passengers to select female drivers. A panic button could also be put into apps so that riders can call 9-1-1 quickly. At any rate, government oversight could give these companies the “push” they need to use technology to create better, safe rides.

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