Hey Snackers,
Weekend conversation starter: This Nielsen report on how legal weed is affecting "salty snack" sales.
The Dow hit 27,000 points Thursday for the first time ever (fresh off the S&P 500 enjoying a round number celebration at 3,000).
Facebook's cryptocurrency faces big resistance — like from Fed Chairman Jerome Powell
Unfriend... The Chairman of America's central bank visited Congress this week. Most focused on his interest rate plans — Jerome Powell strongly hinted that the Fed would lower rates to support the economy during the trade war. But he also opined on Mark Zuckerberg's latest project, Facebook's cryptocurrency "Libra." He's just not that into it.
Regulators and politicians are anti-ZuckBucks... It's not just Powell. We've seen resistance to the idea of Facebook owning an alternative financial system from all over. And it runs deep.
- 🏛 US Congress: The Financial Services Committee wants Facebook to "immediately cease implementation plans." One senator called it "Monopoly Money."
- 👔 The 27 corporate partners: Uber, Mastercard, Spotify, and other companies that paid $10M to oversee the future stablecoin with Facebook are reportedly nervous about the whole thing.
- 🌍 The world: Central bankers from China, Europe, and Singapore are all concerned. The Bank of England head won't let Facebook "learn on the job."
Facebook could actually get stopped... Since sophomore year, Zuckerberg's done what he's wanted to do. But now the Fed has set up a working group of regulators with broad political backing to investigate Facebook's financial plans. Here are Powell's concerns:
- Money laundering: FB's non-regulated financial pipes could make it easier for drug deals to go down.
- Privacy: No explanation needed.
- Consumer protection: Fraudulent schemes could run as wild on Facebook as fake news did/does, out of reach of regulatory oversight.
- Financial stability: What if Libra, the global currency, had an outage? That could spread to other markets. Worldwide. Fast.
Lululemon opens 25K-square-foot everything store in Chicago for sweaty people
Swanky hotel + gym + Lululemon... (with a hint of WeWork). Execs at Lululemon said "yes" to any ideas that could be thrown into its new 25K-square-foot store in Chicago's Lincoln Park. Opening day was yesterday (we were curious). The 1st floor's your standard retail merch (from her stretchy pants to his joggers). But on the 2nd floor, things get transcendental:
- Work your body: There's a studio for yoga and another for HIITs (high intensity interval training). Plus, Equinox-quality locker rooms to un-sweat yourself.
- Work your soul: A 3rd studio (surprise) for meditation.
- Work your mind: Workspace to flip open your laptop when the post-workout endorphins kick in.
- Fuel yourself: Then there's the clean-eating menu at the new chef-designed, influencer-consulted restaurant, called "Fuel".
Faux-industrial, succulent-infused, minimalist decor... But Lulu means business. There are 50 classes per week at $25 each. They're designed to generate sales — You can try on clothes through an entire yoga flow class, then not buy them. And it's planning to expand: by 2023, Lulu wants 10% of its locations to be this new breed of everything store.
Offer something Amazon can't... That's been the strategy of retail companies thriving despite the retail-pocalypse around them. These physical dream-stores whipped up at Lulu's v2.0 spot are packed with an experience online shopping can't replicate.
Healthcare stocks jumped after 2 big regulatory reforms failed
Living their best lives... Cigna popped 9%. UnitedHealth rose 5.5%. CVS (which owns Aetna) jumped 5%. Health insurance stocks have enjoyed the week after a couple key policy proposals — aimed at clarifying drug pricing so you can actually stop paying so much — were dropped or blocked.
Bipartisan-supported political issues do exist... Cutting prescription drug prices is one of them. One plan proposed by President Trump sought to end the practice of drug-makers giving discounts/rebates to middlemen representing health insurance firms that encouraged buying expensive drugs. That was dropped for political reasons. The other involved your TV.
- The problem: Drug companies interrupt your TV bingeing with overwhelming details on what their little pill can do, but are silent on the absurd price.
- The solution: The Trump administration pushed for a rule to require drugmakers to include the $$$ price next to that charming Cialis bathtub scene.
- The outcome: A federal judge said no, ruling that forcing a price tag violates the drug companies' rights to free speech.
Pricing is healthcare's secret muscle... Obscure, mysterious, unclear pricing. The reality for consumers is not knowing the price of prescription medicine — A doctor prescribes, a health insurer pays. There's bipartisan support to allow the invisible hand of economics to force some competition with visible prices. But healthcare stocks surged because drug prices will remain complex (and very high) for now.
What else we’re Snackin’
- Strut: J. Crew meets up with investment banks as it plans to spin off its Madewell brand for an IPO
- Re-sharpen: Amazon will spend over $700M over the next 6 years to retrain 100K workers (1/3 of its US workforce) as automation heads their way
- Relax: American Eagle will start selling CBD personal care products across its 500 stores and online
- Carpool: Ford and VW announce a new partnership — Invest billions together in self-driving and electric cars
- 🤔: Twitter was down for an hour yesterday (it wasn't just you)
Friday
- Budweiser-owner AB InBev spins off its Asia unit to IPO
Disclosure: An author of this Snacks owns shares of Lululemon and Amazon.
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