“We need to treat people better” — United CEO Oscar Munoz, encouraging his employees to engage with customers more and treat them better. It’s also just good life advice.
MARKET SNAPSHOT
Big Picture
Alternatives to Watch
Market Movers
CORPORATE PRIMER
Tesla’s Autopilot is Getting an Upgrade
…And it’s happening sooner than you think.
Billionaire entrepreneur and Tesla CEO Elon Musk tweeted yesterday that his car company is planning to update its Autopilot software within the next few weeks. The new software will improve Autopilot’s ability to process data from the car’s radar system, which should lead to better performance on the road. The automaker hopes the improvements will prevent situations like the fatal accident involving Tesla’s Autopilot earlier this summer. We’re still pretty far from texting with two thumbs on the highway, but Tesla’s doing all it can to make that a reality ASAP.Sometimes Beating Earnings Isn’t Good Enough
…Just ask Salesforce. The cloud computing giant reported earnings and sales numbers that beat analyst expectations, but shares were still down over 6% after hours. What gives? Well, investors are always looking to the future, and Salesforces’ guidance for the rest of the year wasn’t up to Wall Street’s high expectations. And they were definitely high—after all, Salesforce had risen post-earnings in each of the past six quarters. Add in some uncertainty over the company’s M&A spree to ward off increasing competition—it’s completed $3.5 billion in deals since just February—and you have a recipe for the winning streak to finally end.
WORLD MACRO
Bye Bye Dilma
…It’s official: Brazilian president Dilma Rousseff is officially out of office.Brazil’s senate voted to impeach the embattled leader after she violated budget rules to hide the true size of the country’s national deficit. That’s a big no-no. Rousseff’s impeachment marks the final fall for the Worker’s Party of Brazil, whose period of power began with unprecedented prosperity. It wasn’t all her fault, but Rousseff proved unable to steer the country through the commodities selloff (Brazil’s economy is heavily reliant on commodities). Combine that with the Brazilian government’s irresponsible spending habits, Rousseff’s declining fan base and the corrupt nature of the Brazilian government, and you had an unfortunate recipe for disaster—one without a happy ending for Rousseff.
Brazil’s Bad Day
…Isn’t getting any better. The country also announced its sixth consecutive quarter of GDP contraction. So yes, today has been a rough day for the B in BRIC. Though the 0.6% hit in Q2 was only slightly worse than the predicted 0.5%, Brazil still has some work to do after—hopefully—bottoming out to exit its recession. With unemployment soaring to 11.6%, shrinking agriculture and political turmoil, Brazil can take the slight increases in investment and industry, 0.4% and 0.3% respectively, as wins and move on.
OTHER STORIES
ECONOMIC CALENDAR
COLLEGE: CHEAPER THAN WE THOUGHT?
Paying for college is becoming more and more difficult with each passing day, but we have some good(ish) news: we may be overestimating the actual cost to attend college. According to a new report from ideas42, a behavioral design consultancy, the entire process of paying for college is something that most students and parents don’t fully understand. Here are the findings:
INTERVIEW QUESTION OF THE DAY
What factors should a small business consider when deciding whether to raise capital through debt or equity? (Answer)
BUSINESS TERM OF THE DAY
Participation Rate — Measure of the active portion of an economy’s labor force. It refers to the number of people who are either employed or are actively looking for work. During an economic recession, many workers often get discouraged and stop looking for employment, resulting in a decrease in the participation rate.
FOOD FOR THOUGHT
Looking ahead to increased competition from the beer superpower soon to be formed by the merger of Anheuser-Busch InBev and SABMiller, Japanese brewer Asahi is planning to stay relevant and increase revenue by…not making as much beer. Besides controlling 1.2% of the global beer market, Asahi also owns apparel brand Superdry and is expanding its offerings to include products such as wine and baby food.
