“I would say that this does feel like it is a dead cat bounce” — Carson Block, founder of research company Muddy Waters LLC, on the recent stock market rally. It’s clear that Block isn’t too optimistic—check out the business term of the day below for a definition of a dead cat bounce.
MARKET SNAPSHOT
Big Picture
Alternatives to Watch
Market Movers
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CORPORATE PRIMER
Amazon Takes to the Skies
It’s finally here: Amazon’s very own* fleet of planes.
*Well, they’re actually leased. To be exact, we’re talking a 5-7 year lease of 20 cargo planes from Air Transport Services Group (lovingly referred to as ATSG). What does this mean? Yes, this could be the much-anticipated first step for Amazon to implement its own air freight delivery service—and it could mean faster deliveries for you. Amazon isn’t the only one pleased with the deal—ATSG shares took off 17% following the news.Good News for Volkswagen
Just kidding, it’s still bad news. Here’s the latest and worst: yesterday, U.S. Volkswagen CEO Michael Horn resigned in what’s being labeled a “mutual agreement” (haven’t heard that one before). Horn’s work at VW was exemplary, and he’s best known for his work improving dealer relations. But hey, when your company undergoes a multibillion-dollar emissions rigging scandal and posts falling sales for four straight quarters, shareholders feel a little safer seeing heads roll.
Employees Get a Bad Case of Chipotle
Chipotle is up to its old tricks again…you know, the ones where they make you seriously ill. The Mexican chain closed a Boston restaurant yesterday after multiple employees got sick, and one tested positive for norovirus (aka a particularly grisly vomiting bug). Perhaps you’ve noticed that this isn’t the first time Chipotle has closed locations due to health scares, but this time the burrito-maker was ready. The sick employees stayed home, the restaurant was promptly cleaned and it should reopen today (can’t wait to eat there). Investors, however, lost their appetites from the whole ordeal, sending Chipotle’s stock down as much as 6%, but shares recovered somewhat by the end of the day.
Right Angles For the Win
Public tech companies Box and Square both reported better-than-expected Q4 earnings yesterday. Let’s start with the 2-D shape, Square, whose revenue was far from flat—the point-of-sale technology company (in plain English: it powers many of Starbucks’ registers), posted revenue of $374 million, beating estimates by $30 million. The positive results take some of the pressure off CEO Jack Dorsey, who has the two-dimensional job of running both Square and Twitter. Box, a digital storage and content-sharing provider, posted a loss on revenue of $85 million—but the loss was expected, so we’ll call it a win (investors did too, pushing shares up 12% after hours). Box is currently focused on acquiring big customers like AIG and Home Depot in an effort to become profitable by Q4 of 2017.
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OTHER STORIES
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ECONOMIC CALENDAR
IT’S THE CLIMB
Too often, we get so caught up in our day-to-day lives that we forget to take a step back to appreciate how we got to where we are today. Of course, we’re talking about the U.S. stock market. Let’s explain: yesterday marked the seventh year of the stock market’s still-ongoing bull market. That’s a big deal—it’s the third-longest of all time—and it’s made a lot of people a lot of money:
INTERVIEW QUESTION OF THE DAY
After a hard day the gringo wanted some time to relax. But a few minutes later two aborigines wanted to talk to him. To make things clear, the gringo asked: “is at least one of you an honestant?” After the answer, there was no doubt. Who are they and who answered? (Answer)
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BUSINESS TERM OF THE DAY
Dead Cat Bounce — No, it’s not literally a dead cat bouncing (although that would be…interesting). It’s an expression describing a temporary recovery from a prolonged decline or bear market, followed by the continuation of the downtrend—basically a fakeout to raise investor hopes before quickly crushing them.
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FOOD FOR THOUGHT
U.S. air travel this upcoming spring break season is expected to rise 3% over last year to 140 million passengers, which would set a new record. Airlines are no doubt salivating.
