“I think it’s going to underperform perpetually” — Steve Grasso, director of institutional sales at Stuart Frankel, discussing Apple’s stock. Grasso feels that the tech giant is too reliant on the iPhone for sales and that the iPhone 7 will be a major disappointment. You can’t please everyone.
MARKET SNAPSHOT
Big Picture
Market Movers
CORPORATE PRIMER
Attention Prepsters
…Ralph Lauren needs your help. Despite beating both earnings and revenue expectations, the American fashion mainstay saw sales in North America drop 11% last quarter. What is being done about this? CEO Stefan Larsson is sticking with his plan of cutting $180 million in costs and streamlining the catalog to offer more prep and less bleh. Despite the obvious display of Ralph on Team USA during the opening ceremony, the brand is still struggling to retain its identity as the premier preppy clothier in the face of stiff competition. Pop those collars, America.
Made in America
…By a robot. By the end of 2017, Adidas plans to open up a massive “Speedfactory” in Atlanta—staffed with robots. The German sportswear company hopes that the new shoe factory will allow it to produce products at lightning-fast speeds, also allowing the company to offer “unprecedented” customization opportunities. In other words, we’re talking about the best of both worlds here. What about jobs, though? Although robots will play a large role in the factory, humans will gain too: the facility will create around 160 jobs for humans. We’ll take it. Welcome to the future.
Shaky Quarter
…At the Shack. Put frankly, Shake Shack’s quarterly earnings report was received cold and with unwanted mustard. Are people just not hungry anymore? Not exactly. Shake Shack’s profits were not helped by the fact that labor expenses jumped by 37%, as the fast casual restaurant increased its starting wage to $12 an hour in many major cities. Despite strong sales growth in Q1, the recent downturn suggests that not even Shake Shack is safe from the fast-food industry slump.
WORLD MACRO
The Saudis are Drowning Us
…In cheap oil. According to an OPEC report released yesterday, Saudi Arabia pumped out a record-breaking amount of crude oil in July. How much? 10.67 million barrels a day. For some perspective, that’s enough to fill about 510 olympic-sized pools—every day for a month. Overall, oil prices have been remarkably low for the better part of two years largely due to nations like Iraq and Saudi Arabia flooding the markets. At least we can enjoy cheap prices at the pump.
OTHER STORIES
ECONOMIC CALENDAR
READ BOOKS, LIVE FOREVER?
A new study from Yale University finds that reading books might actually increase your lifespan by at least a few months. That, or people who read are just a bit healthier on average. The study surveyed 3,635 people over the age of 50 and analyzed their reading habits over a 12-year span. The subjects were split into three groups: the frequent readers (3.5+ hours per week), occasional readers (0-3.5 hours per week), and those who don’t read books at all. Let’s flip through the numbers:
INTERVIEW QUESTION OF THE DAY
Your job wants to send me to Shanghai, but your spouse refuses to move there. Pretend I’m your spouse, sell the new position in Shanghai to me and convince me to move to China.
BUSINESS TERM OF THE DAY
Baby Bond — Fixed income securities issued in small denominations, generally with a maximum face value of $5,000. The small denominations enhance the attraction of baby bonds to the average retail investor.
FOOD FOR THOUGHT
Alex Rodriguez announced on Sunday that he will play his final MLB game this Friday, which immediately sent ticket prices through the roof—up 500% to be exact. But since then, ticket prices have plummeted 31% and are now priced at an average of $161. For comparison, tickets for Derek Jeter’s last game where priced at $418.
