__Carb problems...__ Beer feels 'em. We've been chatting with you for weeks about declining sales (beer is now [under](https://www.brewbound.com/news/beer-market-share-falls-below-50-percent-in-2018) 50% of all alcohol consumed in the US). And __[Boston Beer Co.](https://robinhood.com/stocks/sam)__ is obsessed with ales — it owns Sam Adams, just bought IPA fan Dogfish Head, and often touts its beard-approved craft status. But research firm IRI recently reported [this](https://www.bloomberg.com/news/articles/2019-07-22/boston-beer-s-spiked-seltzer-not-sam-adams-drives-sales-boom) stat: *Only 25% of Boston Beer's biz is beer.*

__That means 75% is non-beer stuff...__ In fact, its new profit puppy is super clear: Truly Hard Seltzer. The citrus-infused, gluten-free option has been Boston's summer tailgate champ, driving the company's 21% increase in shipments last quarter. Here's the rest of Boston Beer's non-beer, beach-beverage roster:

- __Truly:__ Sorry, had to mention this one again — its sales surged 163% last quarter from the year before (prepping for peak summer).
- __Twisted Tea:__ The hard iced tea sat back and enjoyed 22% sales growth.
- __Angry Orchard Cider:__ Just came out with a "rosé" option, because, rosé.
- __Other [non-beer bets](http://www.bostonbeer.com/our-company/brands):__ A hard kombucha called Tura and a "craft" hard tea that goes by Wild Leaf.

Fizz

__Pure beer stocks are disappearing...__ Boston Beer isn't really a *beer* company anymore. Corona-owner __[Constellation Brands](https://robinhood.com/stocks/stz)__ is big on whiskey, vodka, and CBD-infused experi-beverages. Bud-owner __[AB-InBev](https://robinhood.com/stocks/bud)__ is also investing hard in non-beer options, like Babe. Meanwhile, __[Molson Coors](https://robinhood.com/stocks/tap)__ dropped last week because it's overly dependent on [Coors](https://markets.businessinsider.com/news/stocks/molson-coors-stock-price-tumbles-after-earnings-q2-miss-2019-7-1028403995). The beer legends that are succeeding do it by trading what's on tap for what's light, fruity, or Cannabis-y.

Turns out Sam Adams isn't really a beer company anymore

__Three drug dealers are getting sued by 35 states...__ The stocks of __[McKesson Corp](https://robinhood.com/stocks/MCK)__, __[Cardinal Health](https://robinhood.com/stocks/CAH)__, and __[AmerisourceBergen](https://robinhood.com/stocks/ABC)__ fell on a report from [Bloomberg](https://www.bloomberg.com/news/articles/2019-08-06/opioid-distributors-propose-10-billion-to-end-state-lawsuits) that they offered $10B to settle opioid lawsuits. Those 35 states had a completely different number in mind.

__There's plenty to blame for America's opioid epidemic...__ __Purdue Pharma__ invented (and aggressively marketed) the addictive Oxycontin, while doctors over-prescribed it. Then there are these 3 prescription drug *distributors* — they hook up pharmacies with the pills (aka the drug dealer's drug dealer). Here's why that $10B they offered to end the whole thing is a problem:

- __The allegation:__ 35 states believe the drug distributors turned their heads to what was obviously a dangerous problem.
- __The painful example:__ Some US counties had over [100 pills distributed per person,](https://www.washingtonpost.com/graphics/2019/investigations/dea-pain-pill-database/) per year — to make more profits. *100 opioids per person.*
- __The counter:__ Instead of accepting a $10B settlement, the 35 states proposed drug distributors pay up $45B. Big difference.


__What matters to stocks isn’t when news becomes *official*...__ it’s when news becomes *credible*. Investors reacted fast to Bloomberg's *credible* report, dropping drug distributor stocks — so by the time an *official* verdict is reached, the fine could already be "baked in" to the drug distributors' stock prices. Just like Facebook shares barely budging after its $5B fine became official last month — the news was already baked in.

35 states just rejected a $10B settlement from opioid distributors

__"Use code EARNINGS to get 15% off your 1st ride"...__ __[Lyft](https://robinhood.com/stocks/lyft)__ jumped on word that revenues surged 72% to a new record high. But because those discount codes it dishes out to drive growth are getting expensive, we noticed its growing loss.
- Last year’s 2nd quarter = __Lyft lost $179M__
- This year’s 2nd quarter = __Lyft lost $644M__
- __The good news:__ That loss was huge, but Lyft thinks 2019 is its "peak loss" year — losses will shrink from here on out (and hopefully/eventually become profits).

__But then we noticed 2 other stories...__ and both looked less good on Lyft. Together, they highlight a couple major issues that de-woke Lyft's previous wokeness.

1. __It's not handling harassment well:__ If a driver bothers you, __[Uber's](https://robinhood.com/stocks/uber)__ got a panic button that takes just 1 click to report – The *Washington Post* [notes](https://www.washingtonpost.com/technology/2019/08/02/how-lyft-lost-trust-deleteuber-women-who-thought-it-was-woke/) that it takes a bunch of clicks to reach Lyft's safety team (and their responses haven't been satisfactory).
2. __Congestion — it's a problem:__ Uber and Lyft commissioned their [own report](https://www.theverge.com/2019/8/6/20756945/uber-lyft-tnc-vmt-traffic-congestion-study-fehr-peers) on traffic. Turns out a whopping 14% of vehicle miles traveled in San Francisco are ride-hails — and ~40% of driver time overall is spent cruising around without riders.

Ride

__Lyft had one advantage over Uber...__ *Reputation*. Uber owns more of the ride share market, offers more services (like Uber Eats), and has more big bets (like UberFreight). Lyft had a #DeleteUber reputation advantage that helped it gain market share last year. It can't afford to waste that.

Lyft shares jumped, but 2 other stories revealed its "de-wokeing"

Dow Jones

S&P 500

Nasdaq

Bitcoin

10-Yr US Treasury

_That glass was actually spiked seltzer, not beer_

Lyft's profit ETA: TBD

__Tinder gets all the looks...__ And it's owned by __[Match](https://robinhood.com/stocks/mtch)__, whose stock surged 19% Tuesday as the dating app's growth jumped again. But it wasn't just Match that popped — __[IAC](https://robinhood.com/stocks/iac)__ shares rose 12% too. That's because IAC owns the majority of Match, along with 150 other brands that you likely used at some point today.

__It's all in the name...__ "InterActive." That's what IAC's "I" and "A" stand for. And its legendary leader Barry Diller (aka designer Diane von Furstenberg's husband) is obsessed with that. So the company invests in innovative apps that it thinks have viral interactive potential — people-to-people platforms and shareability are its thing. Recognize this IAC portfolio candy?

- __Public companies:__ IAC has launched 10 of them, including Match. It's also got __[ANGI Home Services](https://robinhood.com/stocks/angi)__, the company behind Angie's List, HomeAdvisor, and Handy, to connect you with someone to build/fix/repair/clean the thing you can't.
- __Private startups:__ College Humor (aggressively shareable videos), Investopedia (financial info), Ask (yes, this used to be Ask Jeeves), The Daily Beast (news), and plenty more viral-ish digital media.

Family

__IAC acts like a venture capital firm...__ but it's a publicly-traded company. That's unique. Most VCs who got in early to Uber or Pinterest are companies that you can't invest in — only the extra-wealthy or institutions typically get access. Yet IAC has become the Berkshire Hathaway of tech, giving retail investors access to a portfolio committed to a specific theme: digital interaction.

IAC is the venture capital-like public company powering Match

__A chain is only as strong as its weakest superhero blockbuster...__ __[Disney](https://robinhood.com/stocks/DIS)__ just announced that revenues hit a record high of $20B (up 33%), but profit dropped 51% in the 2nd quarter. Now that Disney's officially [acquired](https://www.cnbc.com/2019/08/06/disney-fiscal-q3-2019-earnings.html) Fox and most of Hulu to add to the Mouse family, you have to take the good with the bad:

- __The Good (mostly Disney):__ __Avengers:Endgame__ became the best performer in movie history. And the __ESPN__ and __Discovery__ channels brought home big bucks. 
- __The Bad (mostly Fox):__ We're huge Wolverine fans, but the most recent X-Men movie missed (badly). Also, a tournament-worth of cricket matches got rained out, hurting Fox's international revenues. Now Disney wants to [resurrect](https://www.digitalspy.com/movies/a28627166/home-alone-disney-reboot/) Fox's *Home Alone*.

__Here's what Disney actually *does*...__ Mickey lives off of 4 profit food groups:

1. __Media Networks (33% of revenue):__ Things at Disney's many cable TV channels (includes ESPN and ABC) were solid.
2. __Parks, Experiences, and Products (31%):__ Attendance fell 3% at Disney's US parks, but per-tourist spending jumped 10%. Could be the disturbingly large [turkey legs](https://www.delish.com/food/a22736394/disneys-giant-turkey-legs-facts/). 
3. __Studio Entertainment (18%):__ Re-butter the popcorn for Disney's hits on hits on hits. The movie studio set a record $3.8B revenue.
4. __Direct-to-consumer (18%):__ The home of Disney+, the much-hyped new streaming network that arrives  in November.

Acquire

__Disney+ doesn't need to make money...__ (that's its secret). The new Netflix rival just needs to feed the Disney profit beast. Disney makes money everywhere, and that gives it a huge advantage over Netflix.

- __[Netflix](https://robinhood.com/stocks/NFLX):__ $12.99/month, because Netflix has 1 product that needs to make all the profits.
- __Disney+:__ Can charge just $6.99/month because the more fans that fall in love with *Coco*, the more Disney can make money on theme parks, toys, and shows covered in *Coco*.  

__PS:__ The CEO just [announced](https://seekingalpha.com/article/4282384-walt-disney-co-dis-ceo-robert-iger-q3-2019-results-earnings-call-transcript?part=single) the mega package of Disney+, Hulu, and ESPN+ will cost $12.99/month.


Disney's stock falls 5% as its acquisition spree catches up

__Bankruptcy is the new black...__ Among department stores, __Barneys__ was the fancy NYC option with just 22 locations and a cooler-than-us kind of vibe. It's a private company controlled by a hedge fund — now it's shutting 15 stores to enter Chapter 11 bankruptcy (Barneys' biggest locations will keep the doors open while a judge figures out what to do with it).

__Makeover...__ Barneys has been here before, going through bankruptcy in the '90s. But if it re-emerges from bankruptcy (again), it will do so promising to focus on "[experiences](https://www.nytimes.com/2019/08/06/business/barneys-bankruptcy.html)." You know, because us Millennials love experiential experiences. Barneys says it's adding more in-store restaurants and "entertainment," but we haven't heard what that includes exactly.

__But do you own the real estate?...__ Barneys' core problem is that it didn't. Last year, the rent at Barneys' flagship Madison Ave. store jumped to $2.5M/month. Those costs can kill if you don't own the land. Meanwhile, rival __Saks Fifth Ave__ may be suffering from the retail-pocalypse too, but it owns most of its stores (including the iconic 5th Ave. spot) — so it's benefiting from the price-pocalypse of rising real estate values.

Barneys is going bankrupt — but this has a different retail lesson

_When you hear your IAC stock is really Tinder stock_

Tinder jumped. Match jumped. Then IAC jumped.

__Not quiet on the Eastern front...__ Governments worldwide let the free market determine how much a dollar, peso, real, or pound is worth through supply and demand. *Europe buying some fancy American corn? They'll have to sell euros and buy dollars first.* That's why those airport currency exchange boards are constantly changing. But China's government does the opposite — it dictates how much yuan each $ is worth. Then this happened Monday:

- __What China did:__ The government is [weakening](https://www.cnbc.com/2019/08/05/chinese-yuan-moves-against-the-dollar-amid-us-china-trade-turmoil.html) its currency so that your $1 now buys a whopping 7 yuan — the weakest level the currency has hit in over a decade.
- __What the US did:__ It [called out](https://finance.yahoo.com/news/us-treasury-department-labels-china-221455220.html) China — the Treasury Department labeled China a "currency manipulator," a naughty list the country hasn't been on since 1994.

__Currency manipulation = Tariff kryptonite...__ China just opened up a whole new front in the trade war because this move neutralizes US tariffs. It's an intense escalation, but it's *classic* trade war tit-for-tat-for-tit-for-tat. Here's why it went down:

- Last week, the __trade deal talks in Shanghai__ didn't end well.
- The __US pledged a 10% tariff__ on the remaining $300B in Chinese goods not yet tariffed (mainly consumer goods you use, like toys and tech stuff).
- Since tariffs are like taxes, that __would make the Chinese-produced iPhone X 10% more expensive__ to Americans.
- So by weakening the value of its currency compared to the US dollar, __China offsets part of the tariff's impact__.

Battles

__Nobody really wins in a trade war...__ At first, US tariffs hurt China by making it more expensive to manufacture across the Great Wall, encouraging US companies (like Apple) to make stuff elsewhere. Now, China's currency manipulation hurts American companies because their Chinese competition is suddenly cheaper for customers to buy. Trade wars are races to the bottom (welcome to the new front).

Stocks plummeted because of China's dramatic currency move

__ShackBurgers are studying abroad...__ __[Shake Shack](https://robinhood.com/stocks/shak)__ shares (say it five times fast) were already up 60% this year. They just rose higher as the chain spreads its caloric gospel worldwide — it's raising revenue expectations in Shanghai and Hong Kong, just opened in Mexico, and has new shops ready for the Philippines and Singapore. But we couldn't ignore the other earnings report highlight.

__Shake Shack always hated delivery...__ That policy has led to brutal date-destroying lines (the Madison Square Park original literally has a [live cam](https://www.shakeshack.com/location/madison-square-park/)). For years, Shake Shack insisted your 'Shroom Burger and fries be eaten on-site. Here's what the CEO even said last year:

- Burgers were "[not intended](https://thetakeout.com/shake-shack-launches-delivery-grubhub-1836972345) to be eaten half an hour after they were cooked."
- And delivery didn't "necessarily fit really well" with the brand.
- __But wait — Update:__ *Shake Shack [just announced](https://s2.q4cdn.com/686132520/files/doc_financials/2019/q2/2Q-2019-Supplemental-Earnings-Slides-vFINAL.pdf) in its earnings that it's partnering up with __[GrubHub](https://robinhood.com/stocks/GRUB)__ for delivery at 150 locations over the next 9 months.*

Sauce

__*We know, we know*...__ We just chatted with you yesterday about [the pinnacle](https://snacks.robinhood.com/newsletters/1lhKrJbYhU7yubeT1vTLKf/) of the food delivery wars (food delivery startups consolidating). But this Shake Shack update was the perfect example of another phase: *exclusivity.* Taco Bell's now with GrubHub. McDonald's committed to Uber Eats and DoorDash. The Shack tested delivery with Postmates, but ultimately landed with GrubHub. Exclusivity is the other key delivery battle you can't ignore.

Shake Shack jumps to its highest point in a year (and pulls a delivery 180)

__Meat sweats...__ Planet Earth's 2nd biggest "processor of chicken, pork, and beef" (not a fun term here) enjoyed a healthy quarter — __[Tyson's](https://robinhood.com/stocks/tsn)__ sales rose 8% and profits surged 25%, so the stock jumped 5%. One issue: Tyson was also accused of a giant meat price conspiracy that may have affected your summer BBQ game.

__1 serving of subpoena from the Justice Department...__ Apparently some of Tyson's biggest clients have had some concerns about chicken prices — they rose 11% from 2012 to 2018. Walmart makes up 17% of Tyson's revenues and bolognese legend Olive Garden is another big buyer — but they (and others) got [skeptical](https://www.wsj.com/articles/tyson-says-it-hasnt-seen-major-benefits-from-swine-fever-in-china-11565007688).

- __The accusation:__ Tyson and other chicken producers colluded (which is illegal) to prop up prices by limiting chicken breeding (which is strange). Tyson denies it.
- __The culprits:__ Tyson, Perdue, Pilgrim's Pride, and other chicken producers.
- __The subpoena:__ The Justice Department is forcing Tyson to hand over any “documents and information related to the chicken industry.” Sounds official.

Chicken

__Cartels are hard...__ That's when companies get together, wink a few times, and make moves that keep prices artificially high. It's anti-competitive, anti-consumer, and simply illegal. But it's also challenging to pull off, since it requires the backdoor coordination of a few major players. That's why the most famous cartel isn't even in the US — it's __OPEC__, the international organization of 14 oil countries that control oil supplies so they can control oil prices.

Tyson Meats and the great chicken pricing debacle of 2019

_Feels like that_

Worst day of the year. Period.

__All part of a well-balanced breakfast...__ __[Kellogg](https://robinhood.com/stocks/k)__ stock enjoyed its best day in 19 years [thanks to](https://www.wsj.com/articles/snacks-bolster-kellogg-but-weaker-cereal-sales-weigh-on-results-11564663371) snacks (feels meta saying this). Cereal sales fell another 5% as açai and oats replace Frosted Flakes. But the highlight was Kellogg's Pringles, Cheez-Its, and Pop-Tart snacks growing 4%. Plus, its ingredient-transparent RX Bar enjoyed 20% growth to cap off the snacks theme.

__Magic Number = 50%...__ __[Apple](https://robinhood.com/stocks/aapl)__ popped 4% when it [revealed](https://www.nytimes.com/2019/07/30/technology/apple-earnings-iphone.html) that, for the first time since 2012, less than half of revenues came from iPhones. iPhone sales fell 12%, but investors are impressed by Apple's new profit puppies: recurring subscription revenues from Apple Music, iCloud, and Apple News+.

__Not your dad's lawn company...__ __[Scotts Miracle-Gro](https://robinhood.com/stocks/smg)__ is known for boosting homeowners' lawn and garden game. But the 151-year-old company enjoyed an 18% sales jump, powered by [indoor pot growing](https://finance.yahoo.com/news/why-scotts-miracle-gro-stock-194700866.html). Scotts' hydroponics division provides the lights, nutrients, and greenhouse goodies for marijuana cultivation — and those sales surged 49% as legalization gains mojo.

Highs

Who's up...

__We're issuing a "Code Blue"...__ for shares of __[Molson Coors](https://robinhood.com/stocks/tap)__. The nation's #2 brewer saw quarterly sales fall 4.4% as Americans swap light, frat-basement beers for rosé, canned wine, whiskeys, and artisan brews. It's launching a new "[Made to Chill](https://adage.com/article/cmo-strategy/coors-lights-new-made-chill-campaign-breaks-its-mountainous-past/2188001)" ad campaign (no silver bullets or rocky mountains in this one) to regain some demand for its flagship Coors Light.

__Buffering...__ __[Spotify](https://robinhood.com/stocks/spot)__ shares dipped after announcing it reached 232M monthly active users, just short of analysts' expectations. It added too few *paying* subscribers, but the music streamer's big [podcast bet](https://www.theverge.com/2019/7/31/20748337/spotify-earnings-q2-2019-podcasting-growth-users-subscribers) is showing results: The number of pod-faithfuls on Spotify has doubled over the last year (and they spend twice as much time on the platform as music listeners do).

__Someone dropped a banana...__ and __[Nintendo](https://robinhood.com/stocks/ntdoy)__ skidded on it. Shares dropped on word the gamer's profits fell 10% last quarter. This comes just before it launches Switch Lite — the lower-priced handheld game console it hopes will spark a new sales surge. Until then, it's [partnering up](https://www.reuters.com/article/us-nintendo-results/nintendo-quarterly-profit-drops-10-ahead-of-switch-lite-launch-idUSKCN1UP0PF) with Chinese tech to push its Pokemon crew deeper into China.

Lows

...and who's down

__Past: pizza and Chinese. Today: everything...__ Food delivery apps are exploding the amount of restaurant food we eat at home — over 50% of all restaurant orders will be delivery/takeout by [next year](https://www.theatlantic.com/ideas/archive/2019/08/all-food-will-be-delivered/595222/). *50%*. And the surging industry is catered to by The Big Food Four:

1. __DoorDash__ (private, SF-based): Leading with 34% of the market. That’s gonna grow now that it acquired Square-owned Caviar for $410M last week. 
2. __[GrubHub](https://robinhood.com/stocks/GRUB)__ (public, Chicago): The go-to in NYC, it owns 33% of the delivery-by-app market.
3. __[Uber Eats](https://robinhood.com/stocks/UBER)__ (public, SF): 17% of all food delivery. And the favorite in Miami and Atlanta.
4. __Postmates__ (private, SF): It delivers 11% of our meals, boasts the most whimsical logo of them all, and is testing a sidewalk delivery bot called [Serve](https://serve.postmates.com/).

__Now they're moving in together to save money…__ *Classic* Millennial style. The Big Food Four are still unprofitable (“$5 off your first 5 orders”) — so instead of fighting each other over growth, it may be more efficient to just team-up. Case in point: DoorDash acquiring Caviar. We expect more mergers to come — that’s how the airlines became profitable. It happened with ride-hailing too, and it’s hitting e-scooters right now.

__It's the sum of all current trends...__ We're connected to work through our phones and spend more time couch-side streaming than ever. And there's less time to cook if you're out trying to keep your Insta-feed fresh. These apps let us Netflix and not-have-to-grill. There’s downside though:

- __Fee madness:__ The GrubHub CEO [accused](https://www.forbes.com/sites/bizcarson/2019/07/30/grubhub-q2-earnings-delivery-price-gouging/#571bfca66c78) his competitors of sneakily charging too many fees (*service fee, delivery fee, food fee, fee fee...*)
- __Pay problems:__ DoorDash was caught not giving tips to drivers, and delivery wages are still low.
- __Waste:__ Separate packaging for your curry, rice, spring rolls, utensils, and sriracha are piling up landfills.

Delivery apps just hit a climax: huge convenience, huge costs, huge competition

_When a Seamless order has a bunch of special requests_ 

Peak food delivery madness

__Switch hitters are rare...__ __[Square's](https://robinhood.com/stocks/sq)__ winning a batting title with its consumer and small biz facing businesses, processing your latte purchase from the neighborhood spot. The digital payments icon announced revenues [rose](https://s21.q4cdn.com/114365585/files/doc_financials/2019/Q2/2019-Q2-Shareholder-Letter-Square.pdf) 44% to $1.2B (sounds pretty good). But Square spent so much on growth that it suffered a $7M loss. Here are its 3 areas of focus.

1. __Business biz:__ Square's "seller ecosystem" is for companies. Its software and card-swiping tech helps businesses collect payment for that buddha bowl. Once Square gets to know companies' payments, it can even lend to them.
2. __Consumer biz:__ Square's Cash App is the alt-Venmo that also trades Bitcoin. The peer-to-peer payment app makes up just under a quarter of company revenues, but its physical card can be used anywhere. Plus, it's the #1 free finance app 2 straight quarters.
3. __Delivery:__ Square acquired restaurant delivery app __Caviar__ to get you your chicken curry *and* process the payment. But now it's making a change...

__Who ordered the Caviar?...__ DoorDash. Square is selling Caviar to another food delivery app. Square CEO Jack Dorsey is busy building payments ecosystems (+side-hustling as Twitter's CEO) — no time to fight in food delivery wars. It's not a bad return though: Square bought Caviar in 2014 for $90M. Now it's [selling](https://www.cnbc.com/2019/08/01/square-earnings-q2-2019.html) to __DoorDash__ for $410M of cash and shares.

Deliver

__This is a rare miss for Square...__ The stock had risen 40% so far in 2019, and had more than tripled in the past two years. Becoming the *best money friend* of businesses was already an accomplishment. Then its Cash App came out of nowhere, becoming the best friend of fantasy football league coordinators who need to track down league dues. 

Square falls 7% — and it's selling Caviar to DoorDash for $410M

__Arctic-functional...__ Fifth Avenue-fashionable. According to __[Canada Goose](https://robinhood.com/stocks/goos)__ its jackets are packed with humanely-sourced goose down and lined with fur from coyotes in "overpopulated" areas (where the carnivores attack pets). So dropping $1,000 on a faux-rugged parka makes you feel ok. Canada Goose's [website](https://www.canadagoose.com/ca/en/fur-and-down-policy/fur-and-down-policy.html) said so. But shares fell after the New York Post [noticed](https://nypost.com/2019/08/01/canada-goose-pulls-claims-about-its-treatment-of-animals-amid-probe/) that website changed.

1. __Deleted:__ No more __"traceability video"__ to see where that coat's feathers and fur came from.
2. __Replaced:__ "We ensure ethical sourcing" is now "we're *__committed__* to ethical sourcing."

__This goes back to 2017...__ And it begins with the People for the Ethical Treatment of Animals:

- __PETA__ got its hands on a video of a bunch of guys man-handling geese in an inhumane way. PETA alleges it was a Canada Goose supplier (Canada Goose denies this).
- The __FTC__ began looking into Canada Goose for __“potentially false and misleading advertising”__ given all the our-fur-is-humane material on their website.
-  NY Post noticed Canada Goose made __"prompt, corrective action"__ to its website by totally watering-down its ethical promises.

Wear

__There's market value in 'wokeness'...__ Definition: *Being acutely aware of social injustices and acting accordingly.* We're seeing corporations take stands on social issues, from Nike's Kaepernick campaign to Patagonia's climate change initiatives. But Canada Goose's un-wokeness cost shareholders  a 5% drop — investors think customers judge values as much as they do style.

Canada Goose drops 5% on un-wokeness

__100% of Made In China is tarriff'd...__  Trade negotiators returned from chats in Shanghai this week, reporting to President Trump that China [had broken](https://abcnews.go.com/Politics/trump-escalates-trade-war-imposes-tariffs-remaining-300b/story?id=64712522) too many promises — it's not buying more US crops, and it hasn't stopped selling the addictive pain reliever fentanyl. So the president started [tweeting](https://twitter.com/realDonaldTrump/status/1156979443900067841).
- __Before:__ $250B worth of stuff the US imports from China each year was tariffed by 25% (think of it as a 25% tax) — mostly business products like steel and machines. 
- __Starting September 1st:__ The remaining $300B of Chinese imports get tariffed by 10% — and your wallet will notice this time (more in the takeaway).

__Tariffpalooza affects nearly everything...__ The [S&P 500](https://learn.robinhood.com/articles/7kFFEUv46vmMCmMfLuNiRX/what-is-the-s-and-p-500/) (a helpfully broad measure of the whole stock market) dropped 2% after the announcement. Then oil prices plummeted 7% because this escalation could hit global trade. __[GE](https://robinhood.com/stocks/ge)__ and __[Caterpillar](https://robinhood.com/stocks/cat)__ both dipped 4% because they produce and sell there. __[Best Buy](https://robinhood.com/stocks/BBY)__ dropped 11% and __[The Gap](https://robinhood.com/stocks/GPS)__ dipped 8%. 

__You’re gonna notice it this time...__ For political reasons, the tariffs have *so far* targeted the kind of things that probably don't affect your life ("steel beams" part of your daily routine?). But to escalate the trade war further, Trump started taxing the toys (Barbie, Hot Wheels), clothing (check your label), and tech (likely what you're reading this on) that consumers (read: voters) buy.

FYI: __[Apple](https://robinhood.com/stocks/aapl)__ dropped 2% because AirPods, MacBooks, iPhones, and iAnything are China-made and will likely get more expensive because of this.

The trade war just hit a fresh new level: iTariffs

_Square retires from these food delivery wars_

iPhone. iPad. iTariffs.

__Willie Nelson's suddenly an investor...__ Way back in 1868, __[Scotts Miracle-Gro](https://robinhood.com/stocks/SMG)__ was founded in Marysville, Ohio. And its mission was simple: help people grow plants. And sales to gardening homeowners and landscaping legends rose 10% last quarter. But overall sales were charged by the other grass — [Cannabis](https://finance.yahoo.com/news/why-scotts-miracle-gro-stock-194700866.html).

__Hydroponics = growing things indoors without soil...__ According to Scotts investor [presentation](https://scottsmiraclegro.gcs-web.com/static-files/870428b7-b0d2-42ba-9097-90b668378b02), it helps "specialty crops" grow indoors with lighting, nutrients, and other greenhouse-y things. Sales in that division boomed 49% last quarter, courtesy of cannabis (best grown indoors). It even paid $450M to acquire __Sunlight Supply__, which produces sun-emulating lamps (sales in hydroponics grew 138% if you include that).

Cultivate

__Trends are like onions...__ Layers. So many layers. Cannabis has booming growth potential as the stigma of marijuana use fades and legalization continues. Companies like Scotts hope for a piece of that growth action by enabling the enablers — aka supplying growers with the stuff they need to cultivate the cannabis. 

Scotts Miracle-Gro is kind of a pot company

__Turn it up...__ Shares of Swedish music streamer __[Spotify](https://robinhood.com/stocks/SPOT)__ dipped on word it added fewer paying subscribers last quarter than expected. Here's what Spotify's 232M-strong moshpit of "monthly active users" looks like: 

- __The freebies: 129M (up 27%)__ tolerate an ad every few songs so they don't need to pay any cash money.
- __The premiums: 108M (up 31%)__ pay monthly for ultimate listening control.
- __Average revenue per user: $5.42__. That's a combo of ads and monthly subscription, and it's been declining as Spotify entices broke college students to sign up. 

__Growth is strong, young Skywalker...__ CEO Daniel Ek [believes](https://www.wsj.com/articles/spotify-reports-subscriber-growth-amid-industry-podcast-boom-11564567368) his company's 31% user growth is double __[Apple](https://robinhood.com/stocks/AAPL)__ Music's growth rate. And the percentage of users who canceled their subscription — aka the "churn rate" — hit a record low 4.6%. It's still making a loss though as it focuses on the race against Apple for eardrums.

Stream

__It's not music. It's "listen"...__ Spotify prioritized podcasts for key reasons. First, it's easier to work with pod creators than 4 powerful record labels representing most music artists. Second, Spotify's pod listeners stay in the app longer (*and we assume are better looking*). So Spotify acquired Gimlet's collection of pods in February, along with 2 other pod-cquisitions. Add in some in-app nudging and Spotify has [doubled](https://www.theverge.com/2019/7/31/20748337/spotify-earnings-q2-2019-podcasting-growth-users-subscribers) its number of pod listeners since the start of 2019. 

__PS:__ You can "[festify](https://salty-beach-42139.herokuapp.com/)" the stuff you listen to into a music fest-style lineup poster (don't know how *Les Mis* soundtrack got in there). 

Spotify hits 232M users globally — but podcasts were the star

__Investors wanted two ponies...__ But the Fed only gave them one. America's central bank just did something it hasn't done in a decade: [Cut interest rates](https://www.washingtonpost.com/business/2019/07/31/federal-reserve-cuts-interest-rate-quarter-point-effort-keep-economy-track/). Fed Chairman Jerome "Jerry" Powell said he's lowering the nation's rates by 0.25%. Doesn't look like much, but the impact is big — if you've got a savings account, car loan, or student debt, this might affect you.

__Time-travel back to 2008...__ That's the last time the Fed lowered rates. With the financial crisis growing, rates were dropped to near zero and stayed there for years to encourage borrowing and boost economic growth. It encouraged us to invest in stocks or other things instead of letting money just sit in savings accounts. *This time,* the Fed lowered rates for 2 other reasons:

1. __The trade war:__ Jerry's concerned it could hurt the US economy, so he's preemptively encouraging market-boosting borrowing with lower rates.
2. __Inflation:__ Prices aren't rising much. And a healthy economy should have about 2% inflation.

Rates

__December was the big pivot...__ For years, the economy's had its post-crisis mojo back, so the Fed had been *increasing* interest rates since 2015. But in December, the Fed changed its tone (see the 2 reasons above). Since then, investors have pumped up the S&P 500 by 29% on expectations rates would drop — But stocks fell yesterday because investors expected even *more* rate drops to come. Jerry hinted 1 was enough.

The Fed's historic move just dropped stocks big

"_Just pretend a 2nd interest rate cut is coming_"

The Fed gave us a pony. Investors wanted 2 ponies.

__Home court advantage is over...__ __[Under Armour's](https://robinhood.com/stocks/ua)__ sales abroad are up, but its share of the US activewear market has [slipped](https://www.cnbc.com/2019/07/30/under-armours-north-america-problem-hasnt-gone-away.html) from 6.4% to 5.6%. Its share of footwear fell, too. The stock had been up 55% this year, but just suffered its worst day in 2 years. Someone please protect this house.

__Too much “ath” not enough “leisure"...__ Under Armour doubled-down on super technical apparel to dominate the sweat-wicking athlete lifestyle. But consumers want more fashion weaved into their workout gear so that they're brunch-ready. Now analysts think UA is a “[long way](https://www.marketwatch.com/story/under-armour-shares-plummet-as-efforts-in-north-america-continue-to-fall-short-2019-07-30)” behind its rivals. Here's what they're up to:
- __Lululemon:__ Launching experiential stores and adding branded shampoos.
- __Puma:__ Selena Gomez landed her own collaboration collection.
- __Nike:__ Taking stands on social issues.
- __Adidas:__ Beyoncé is designing sneakers.

Sweat

__Time to rebrand Under Armour...__ We noticed this quote from founder/CEO Kevin Plank: Under Armour's marketing needs to get "[louder](https://www.cnbc.com/2019/07/30/under-armour-q2-2019-earnings.html)." Actually, it's the opposite — UA needs to get smarter. Perfect case: Under Armour's relationship with women. It's invested in female-focused marketing, but brand equity among women has barely [budged](https://www.marketwatch.com/story/under-armour-shares-plummet-as-efforts-in-north-america-continue-to-fall-short-2019-07-30). More isn't always more.

Under Armour drops 14% because it ignored the athleisure life

__'Siri, what am I?'...__ Not an iPhone company. After years of dominating __[Apple's](https://robinhood.com/stocks/aapl)__ financial statements, a milestone was just hit: *The iPhone now makes up less than 50% of Apple's sales for the first time since 2012*. Big moment. Let it sink in. And the next iPhone coming this fall [probably](https://www.nytimes.com/2019/07/30/technology/apple-earnings-iphone.html) won't have the futuristic 5G internet-of-everything network (it's not coming until 2020 for Apple).

__Apple is now a 2-part company...__ iPhones vs. everything else.

- __iPhone sales fell 12%:__ ⬇️That number is way down because the price has [surged](https://techcrunch.com/2019/07/30/apples-revenue-growth-slows-as-q3-iphone-sales-dip/) to "should-I-just-get-a-laptop" levels, and people don't feel the need to iUpgrade as often.
- __Everything else (especially accessories) jumped 17%:__ ⬆️ Mac, iPad, wearables, and services (Apple Music, Apple News+) are helping drive recurring revenues.
- *__Fun fact:__* That wearables biz? It includes AirPods and Apple Watch. And the whole wearables division is now the size of a [Fortune 200](https://www.businessinsider.com/apple-q3-2019-earnings-wearables-business-closer-to-surpassing-mac-2019-7) company.


Evolved

__Apple has 1 innovative new thing right now...__ (and we already kinda knew about it). The joint credit card with Goldman Sachs. We now know the titanium-clad (there's also a digital version) humble-brag collaboration [will arrive](https://www.theverge.com/2019/7/30/20747618/apple-confirms-apple-card-august-launch) in August. In Apple's world of slowing iPhones and growing services, it's creatively focused on privacy:

- There's __no card number__ — it updates with a new one every transaction so even Goldman can't track your shopping.
- And it __doesn't sell__ that data to anyone else.
- Plus, it's all 2-factor authenticated — aka __finger or facial recognition__.

Apple is no longer an iPhone company — and the stock jumped 4%

__Your sink cabinet has a soul...__ and it's filled with Tide, Febreeze, Bounty, and Tampax. They're some of the VIP brands behind __[Procter & Gamble](https://robinhood.com/stocks/pg)__. The stock rose 4% after its earnings were released, but P&G also reported one huge number: a $5.4B loss — that's because it [reevaluated and adjusted](https://www.wsj.com/articles/procter-gamble-posts-strong-sales-growth-writes-down-gillette-business-11564488591) the value of its Gillette razor brand big-time:

- __2005:__ P&G acquires Gillette for a smooth *$57B*.
- __Right now:__ P&G has adjusted Gillette's valuation down by hefty *$8B*.

__Blame beards...__ P&G claims "lower shaving frequency" is behind Gillette's decline, jumping on the "because Millennials" bandwagon. Shaving happens less often ([down](https://fingfx.thomsonreuters.com/gfx/editorcharts/PROCTERGAMBLE-RESULTS/0H001QEMC7LY/index.html) 11% in the last 5 years) and with cheaper razors — __Dollar Shave Club__ (now owned by Unilever) and __Harry's__ (acquired by Edgewell Personal Care) have snagged Gillette's market share. Sophisticated, "Mach-filled," 20-blade razors are out.

Pricing

__Pricing is power...__ Despite #GilletteProblems, we mentioned P&G's stock rose 4%. That's because sales surged 7% — the biggest jump in over a decade. Half that rise comes from P&G charging higher prices from detergent to tampons (the other half is just selling more of them). The conglomerate has been raising prices, but consumers keep paying. That's power you can't buy.


Shaving just cost Procter & Gamble $8B because Gillette couldn't keep up

"_I will protect this house_"

Apple’s iPhone milestone: <50%

__Plant-based bae...__ It's __[Beyond Meat](https://robinhood.com/stocks/bynd)__. And while the biggest new stock of 2019 was up 794% from its IPO price on Monday, shares dropped 14% after its 2nd ever earnings report was released after-hours. It made a lot bigger loss than investors expected. But Beyond was focused on the positives on its plate:

- __Sales:__ They nearly quadrupled to $67M.
- __Partnerships:__ Breakfast sammies with Dunkin', burgers with Tim Hortons, tacos with Del Taco, and meal kits with Blue Apron.
- __Pipeline:__ Pea-based bacon and steak are in the works.
- __Projections:__ It upped its sales forecasts for this year because grill season is happening. 

__1 problem...__ *Beyond's giving away more Beyond*. Shares plummeted as soon as execs announced they would issue *more* shares of the company. Like an [Initial Public Offering](https://learn.robinhood.com/articles/6UsdUrlnUvxiDpDT4D2bup/what-is-an-initial-public-offering-ipo/?utm_source=snacks&utm_campaign=email_Daily&utm_content=IPO&utm_term=What%20is%20an%20IPO), Beyond is raising new $$$ for the biz by selling new shares — it's just not "initial" anymore. This "secondary" offering dilutes the value of existing shareholders' stock, and they're not thrilled CEO Ethan Brown and other big shareholders are selling stock in this offering too.

Munch

__Nice problem to have...__ Beyond is strategically issuing new shares while its stock price is high — short-term, it hurts the price, but Beyond thinks it'll create long-term value. It'll spend the new money on new factories so it can [access](https://www.cnbc.com/2019/07/29/beyond-meat-hype-rivals-that-of-bitcoin-and-could-share-the-same-fate.html) the 98% of plant-based meat-eaters who also buy meat — "The Reducetarians."

Beyond Meat plummets 14% after a good/bad earnings combo

__New HR training...__ The FBI is prosecuting a former __Amazon__ employee for stealing data from Amazon's servers (she's under arrest). The data belonged to __[Capital One](https://robinhood.com/stocks/COF)__, which [announced](http://press.capitalone.com/phoenix.zhtml?c=251626&p=irol-newsArticle&ID=2405043) the bad news Monday, sending shares down 3%. It's a win for the FBI — we don't often see hackers get ID'd (much less arrested). Now they just need to find the getaway USB stick.  

__What's in your wallet?...__ The hacker knows. Capital One is the #5 provider of credit cards in the US, offering up bank accounts too to people and businesses — so the victims are widespread.

- __Who's affected:__ Anyone/anything that applied for credit cards between 2005 and 2019.
- __How they're affected:__ Mailing address, DOB, email, phone numbers, and self-reported income are all out there. For a smaller number (~140K) they got SSNs, too. The bank said no passwords or credit card numbers were taken. 
- __What to do if you're affected:__ Capital One believes "it is unlikely that the information was used for fraud or disseminated". More info [here](https://www.capitalone.com/facts2019/).

Steal

__Is this a cloud story? An Amazon story?...__ In Seattle, they're charging the alleged hacker for breaking into the physical servers humming along with Capital One's data (we're picturing Mission:Impossible vibes). It's not reassuring that a disgruntled employee at the top cloud company can steal customer files. That's because virtually all big companies rent server space from Amazon, Google, Microsoft, or other cloud providers. 

Capital One announces 106M credit card applications got hacked

__Welcome to the Senior PGA Tour...__ __[Pfizer](https://robinhood.com/stocks/pfe)__ has decided to get rid of its seasoned drugs that used to be hugely profitable, but have gone off-patent and aren't cut out for the big leagues anymore. We're talking its drugs whose patents have expired. And Pfizer's [merging](https://www.cnn.com/2019/07/29/business/pfizer-mylan-upjohn-merger/index.html) those oldies with fellow drugmaker __[Mylan](https://robinhood.com/stocks/myl)__, which specializes in has-been generic and off-patent drugs:

- __From Team Pfizer:__ Xanax (anxiety), Viagra (erectile dysfunction), and Lipitor (cholesterol)
- __From Team Mylan:__ EpiPens (allergies)
- __Team Name — TBD:__ The not-yet-named mixed will be a separate, publicly-traded company with $20B in annual sales, combining all the above.

__Patent protection = profit protection...__ Drugmakers thrive off patents — That protection from competition lets them develop a unique medicine and pretty much name their price. Once the patent expires, the competition arrives.

- __Viagra__ used to bring in $1.4B in sales annually for Pfizer. In 2017 competition came with __Hims__, __Roman__, and __[Teva Pharmaceutical's](https://robinhood.com/stocks/TEVA)__ brazenly-named "[Generic Version Viagra](https://www.tevapharm.com/news/teva_announces_exclusive_launch_of_generic_viagra_tablets_in_the_united_states_12_17.aspx)".
- __Mylan__ has [lost](https://www.biospace.com/article/teva-eyes-25-percent-of-the-750-million-epipen-market-by-year-s-end/) profits and stock price after the generic version of __EpiPen__ (also by __Teva__) was approved last year.

Purge

__This is cheap drugs vs. expensive drugs...__ Pfizer's spinning off its classics so it can focus on more "lucrative" drugs that are patent-protected (it just bought an expensive cancer-treating one for $11B last month). But now Pfizer's losing its ol' faithful revenue generators. The pressure is on their scientists now to pass those clinical trials and unleash new blockbuster drugs.

Pfizer's new merger created a new company: Viagra + EpiPens

"_You sold all your Beyond Meat stock, Ted?_"

Beyond Meat's sophomore slump

__New metric, who dis?...__ __[Twitter](https://robinhood.com/stocks/twtr)__ has moved to a [new metric](https://www.cnbc.com/2019/07/26/twitter-q2-2019-earnings.html) it thinks will better reflect its worth as a company. Instead of just counting the number of Twitter users, the focus is on *monetizable* users. If you've logged into Twitter and seen an ad, then congrats — you're a monetized user. More of those helped drive ad revenue 21% higher last quarter and Twitter shares jumped 9%. 

__That 4pm oat milk latte ritual...__ __[Starbucks](https://robinhood.com/stocks/sbux)__ is thoroughly enjoying it. Shares surged on word that sales at each Starbucks rose 7% on average from last year — and driving that was afternoon visits, which grew for the [1st time](https://www.cnn.com/2019/07/25/investing/starbucks-earnings/index.html) in 3 years. "Coffee happy hours" are now a thing.

__"*That'll be extra for guac*"...__ (we know). Rising avocado prices pushed up __[Chipotle's](https://robinhood.com/stocks/cmg)__ costs last quarter (Mexican and Californian farmers can't [keep up](https://www.cnbc.com/2019/07/23/chipotle-earnings-q2-2019.html) with American avo-hunger). But shares of the fast-casual restaurant pioneer still hit a record high. Chipotle's greatest enemy is long lines, so it's been adding drive-through windows affectionately called "Chipotlanes." Plus its app and loyalty program have nearly doubled online orders.

__The streak is over...__ __[Amazon's](https://robinhood.com/stocks/amzn)__ 4-straight quarters of its [best profits](https://www.cnn.com/2019/07/25/tech/amazon-earnings/index.html) ever is officially done. Blame it on the shipping arms race — Prime delivery was upped from 2-day to 1-day delivery, jacking Amazon's shipping costs north by 36%. Expect similarly huge postage stamp bills from __Target__ and __Walmart__ when they report earnings in the new world of "we-demand-one-day-shipping."

__Delayed — ETA TBD...__ __[Southwest](https://robinhood.com/stocks/luv)__ had to cancel 20K flights last quarter, mostly because of Boeing's flawed 737 Max jets. Turns out Southwest was the biggest 737 Max customer with 34 in its fleet, 41 arriving this year, and hundreds more already ordered. The pain is causing it to [cut](https://www.wsj.com/articles/southwest-airlines-to-cease-operations-at-newark-airport-focus-on-laguardia-11564054566?mod=hp_lista_pos3) all its air service out of Newark airport. 

__Model 3 is eating Model S...__ Technically, __[Tesla](https://robinhood.com/stocks/tsla)__ set a record for cars sold over the last three months (95K). But shares [plummeted](https://markets.businessinsider.com/news/stocks/tesla-stock-q2-earnings-shock-to-wipe-52-billion-off-value-cto-leaves-2019-7-1028383743) 12% for their worst day of the year after we learned that "cannibalization" is eating profits. Tesla's lower cost (and arguably sleeker) Model 3 is snagging sales away from the classic Model S and Model X, which are pricier (and profitable-ier for Tesla).

__It's been 15 months of lobbying...__ since __[T-Mobile](https://robinhood.com/stocks/TMUS)__ and __[Sprint](https://robinhood.com/stocks/S)__ announced plans to merge. Last week the wireless companies got what they wanted: the Justice Dep't [blessed](https://www.npr.org/2019/07/26/745544033/t-mobile-and-sprint-merger-finally-wins-justice-departments-blessing) the merger. The final hurdle is 13 states + DC that are suing, but magenta-loving CEO John Legere is moving forward like it's a done deal — he says rural America will get more bars and it's a win for American 5G. Here's the new "Big 3+1" in wireless: 

1. __[AT&T](https://robinhood.com/stocks/T)__ = 100M customers 
2. __[Verizon](https://robinhood.com/stocks/VZ)__ = 100M customers
3. __*T-Mobile*__ = 90M customers (the "Sprint" name will be retired) 
4. __[Dish Network](https://robinhood.com/stocks/DISH)__ (including BOOST) — If the wireless industry is The Beatles, then Dish is its Ringo Starr.

__This marriage comes with 1 big condition...__ *There must be a 4th wireless company*. T-Mobile was forced to sell Boost Mobile to __[Dish Networks](https://robinhood.com/stocks/DISH)__ because regulators worried it would be too big after acquiring Sprint. So the new #4 is mostly low-cost prepaid plans. Here are some other mega-mergers that featured competition-salvaging conditions:

- __Big Beer:__ When __AB InBev__ merged with __SAB Miller__ for $104B, they had to sell Miller and Coors beer brands.
- __Big Entertainment:__ When __Disney__ acquired __Fox__, Fox Sports and YES Network had to go.

__3 companies will now handle 95% of American phone plans...__ T-Mobile used to be that pesky 4th that undercut Verizon and AT&T prices (it was great for consumers). Now with just 3 players, it's [much easier](https://www.wsj.com/articles/what-the-t-mobile-takeover-of-sprint-means-for-your-wireless-bill-11564156044) for each to focus on profits by raising prices, and not worry as much about competition. The new reality: 3 is a big difference from 4.

 The wireless "Big 3+1" — T-Mobile & Sprint stocks spike on merger approval

_Wall Street's excited for the big wireless merger. Consumers are tbd._

The new "Wireless Big 3" (+1 Ringo Starr)

__Fact...__ Internet growth is slowing. That freaked out Google's parent, __[Alphabet](https://robinhood.com/stocks/GOOG)__, when revenues inched up just 13% last quarter. It was depression-worthy for Google investors, who were used to 25% revenue growth. So the bar was low this time, but Google cleared it (and then some) with a 19% surge in revenues.

- __Fun Fact:__ Google's budget-friendly $400 __Pixel 3A__ helped [double](https://www.theverge.com/2019/7/25/8930755/google-alphabet-q2-2019-earnings-hardware-pixel-sales-cloud-revenue-boost) sales of its smartphones.

__Webster's should strike the word "search" from the internet...__ Google's dominance in online search is [astounding](https://www.businessinsider.com/how-google-retains-more-than-90-of-market-share-2018-4) (93% of worldwide searches) — and so are the ad dollars it harvests year after year. Now it's dishing out some of the $63B in profits it's made the past 3 years by buying-back shares of itself — That can make each remaining share worth more in the near term.

Searched

__This 21-year-old has 2 problems...__ Investors look at Alphabet's ~$800B market value and think: *should this be worth more or less?* Google faces 2 major obstacles to up its growth game:

1. __Shockingly slowing internet growth:__ Mary Meeker's famous Internet Trends Report [showed](https://www.bondcap.com/report/itr19/#view/1) that internet users around the globe are growing at just 6% annually. That's the slowest growth ever, so Google's making up for it by sticking more ads in Google Maps and YouTube.
2. __Major antitrust vibes:__ The federal government started [an investigation](https://www.axios.com/antitrust-vise-tightens-on-tech-doj-google-facebook-amazon-23bd3cf8-2a47-4696-95a3-dcbe31dc2593.html) this week into Google and its gigantic internet friends for allegedly just being way too dominant for society. 

Google jumps 8%  — despite Earth's internet growth slowdown

__Warning...__ __[Hershey's](https://robinhood.com/stocks/hsy)__ latest earnings report revealed that it's raising candy prices, which will probably hit your office choco-bowl budget soon. It also enjoyed $1.8B in quarterly revenues, which beat expectations. But one detail [stood out](https://hershey.gcs-web.com/static-files/5a8c6dde-0f5e-4ab5-9bad-65cceac88710) to us at Snacks: “Growth was led by our powerful Reese’s franchise.” Please continue, Hershey.

__An 87-calorie triple threat...__ Reese's are 90 years old, but Hershey's has given them a facelift by introducing new versions. They call it "innovation." We call it "repackaging and reshaping." But it's working. Here's what they came up with this year:
- __Reese's [Thins](https://www.hersheys.com/reeses/en_us/thins.html):__ Pretty straightforward — the peanut butter cups are 40% narrower.
- __Reese's [Lovers](https://www.hersheys.com/reeses/en_us/lovers.html):__ Instead of a 50/50 chocolate/PB split, there's more chocolate in some, more peanut butter in others.
- __[Variety Pack](https://www.elitedaily.com/p/this-reeses-candy-bar-30-count-variety-pack-is-like-a-dream-come-true-18194765):__ This one's a straight-up packaging trick — 5 bars of 6 types (and one is just a regular Reese's cup...*filled with Reese's Pieces*).

Packaged

__Hershey has an acquisition craving...__ There's only so much repackaging of nut butter and cocoa a century-old company can pull off. So it's looking to buy new brands. Last fall, the chocolate legend acquired Pirate's Booty to get into non-sugar-laden snacks. And Hershey's president thinks acquisitions of newer, innovativ-er brands now play a "[major role](https://www.fooddive.com/news/hershey-targeting-ma-in-bid-to-boost-presence-in-the-burgeoning-snack-spac/538472/)" in its future.

Creative Reese's just powered Hershey up 2%

__Between NorCal and SoCal...__ lies the Governor of California. Four car companies secretly met up with him to negotiate a compromise on minimum MPG fuel efficiency. You borderline needed to whip out a pocket Constitution to understand this one. 

__Cars cause pollution...__ Econ 101 says that governments tax pollution or put limits on it. President Obama [ordered](https://www.nytimes.com/2019/07/25/climate/automakers-rejecting-trump-pollution-rule-strike-a-deal-with-california.html) that car companies increase their minimum average fuel economy to __54.5 mpg__ by 2025. President Trump doesn't believe that's necessary and prefers __37 mpg__. That's why California planned to exercise its *waiver* from federal fuel economy laws to keep stricter standards, and 13 states want to follow its lead. 

- __The nightmare scenario:__ Car companies might have had to create two lineups of cars — one for the 36 states following Trump's rules, one for the 14 more dedicated to fighting climate change. 
- __Instead they compromised:__ Ford, Honda, VW, and BMW made a pact with California to follow a (very efficient) __51 mpg__ nationwide by 2026. More automakers are expected to follow.

Negotiations

__This is why car companies want trade deals...__ Drastically different fuel standards between "teams" of states would've given carmakers tons to comply with — sometimes 2 assembly lines are needed instead of 1. Trade deals can fix that. Take the proposed Trans-Pacific Partnership (a US/Asia trade deal that fell apart). It would've unified standards between the US and Japan, but politics killed it. Car companies are intervening to unify the US.