Blog

Why Americans Aren’t Drinking Beer

It’s not just preference related, the big issue is cost.

Tariffs Directly Related to Decline

Drastic decrease in 2018 sales are also attributed to the aluminum tariffs imported from China. The average consumer has to pay more for beer because of increased price in aluminum.

Tariffs include a 10% tax on all aluminum imports and 25% on steel imports.

65% of the products are aluminum cans for Molson Coors (TAP). Their plant in Colorado produces over 13M cans a day.

Unfortunately the tariff mostly affects the working class. 50% of Coors customers make under $50,000 a year, where every dollar counts and hiking beer prices are not in the budget.

On CNBC James Mcgreevy, the president of the beer institute states that, “users over the past decade have wanted aluminum cans over glass bottles. Unfortunately we can’t just turn production from can to bottle at the snap of a finger.” When asked about the increase of interest in wines and spirits Mcgrevvy replied, “the alcohol beverage market is a very competitive market and consumers may make different decisions.

Beer and the Economy

American beer accounts for nearly $350B of our G.D.P. which is 2% of our economy. Yearly beer taxes add up to $63B in revenue for the government.

The projected loss of beer’s G.D.P. contribution is roughly $2.8B.

 

CEO During the Day, D.J. at Night; David Solomon Set to be new CEO of Goldman Sachs

Newly selected Goldman Sachs CEO, David Solomon, has an unexpected side hustle. He is an EDM D.J. under the stage name of “DJ D-SOL” According to his Instagram, Solomon has frequent gigs in L.A., New York, and the Bahamas.

 

Above is “DJ D-SOL” playing a set in the Bahamas. He has over 500,000 monthly listeners on Spotify.

56 year old Solomon has been with Goldman for 20 years and is known best for his side activities which also include skiing and wine tasting.

On October 1st he will be replacing Goldman’s 12 year CEO Lloyd Blankfein.

Lloyd will remain chairman of the company until the end of the year until 2019 where Solomon will take the chairman position as well.

Lloyd released a statement explaining the hardships of leaving

” When things are going bad you can’t leave, and when things are going well you don’t want to leave. So when you go out, go out on your own steam…which is always when you don’t want to leave. And by the way, that’s why some people stay too long.”

Blankfein is 1 of 2 of the last CEO’s left from the market crash.

About Goldman Sachs

Goldman Sachs is the most influential firm on Wall Street with history dating back to 1896. Goldman is one of the firms that pulled through the financial crisis of ’08.

Goldman started as a trading firm until they went into investment banking and asset management, becoming the biggest investment bank in the world.

Goldman has 916B in assets under management, and has 32B in revenue. It is said that it is harder to get a job at Goldman Sachs than it is to get into Harvard.

 

Image Credit

General Electric Beats Earnings Expectation; Stock Drops After CEO Speaks

Shares of General Electric (GE) were running strong at yesterday’s market open. With shares shooting up 2.7% at the open, GE was the most traded stock with volume above 150M. The large energy conglomerate beat wall street analysts predictions but did not exceed last year’s revenue.

The stock started falling when CEO John Flannery started talking at an industry conference.

Shares ended down 7.3%, one of the largest drops in company history.

When Flannery was asked why he thought the stock sold off after he started talking, he suggested it had something to do with investor disappointment over how “deliberate” the company was moving to right the ship, according to a transcript of his speech provided by FactSet.

May, Flannery suggested one reason the stock started selling off after he started talking was because investors, who were wondering “what’s taking so long?” to fix the company’s problems, weren’t happy with his style of being “deliberate and then moving when things make sense as opposed to moving just because somebody wants us to.”

On Friday, Flannery seemed less deliberate by saying the company was working “intensely” to fix the issues in the power business, with “a total sense of urgency.” But then he followed that by saying, “It’s going to be a multiyear fix, with some volatility.”

And while the company was executing on its turnaround plan and “energized” by the path forward, he said the current outlook for earnings per share “is at the low end” of the previously provided guidance range of $1.00 to $1.07.

In response to an analyst’s question about the potential effects of tariffs imposed by the Trump administration, Flannery said he didn’t see a major financial impact yet, “certainly not in our 2018 guidance.” But he added at caveat, that GE is a company “that’s built for fair and open trade” with a “massively global business” in every sense.

“And our view right now is we hope and we expect that ultimately these matters reach sensible negotiated conclusion, and we think that’s really in the best interest of all parties involved,” Flannery said, according to a transcript provided by FactSet. “So we’re watching this carefully, but I think the financial parameter, we’ve got a good handle on.”Marketwatch

Chart of (GE) Friday 7/20/18

 

 

Image Credit

Snapchat Funneling its Users to Amazon

Snapchat (SNAP) is building a search platform in which the items you look up will be redirected to Amazon. A feature that they will be calling “Eagle.”

Snapchat is also working on a visual search, where if you hold down the screen you can search songs, items, places, etc. The search digs into Amazon, Shazam, and other Snap partner’s data bases.

This is a much needed move for Snapchat as they had a 385 million loss last quarter as opposed to their top competitors Facebook (FB) and Twitter (TWTR).

Amazon Chart

Amazon moved up 1.1 percent in today’s trading session

snap chart

Snapchat down 2.3% in today’s trading session.

 

Image Credit

Twitter Deletes 70 Million Accounts

Twitter Inc. stock TWTR was down nearly 9.8% today at sessions lows.

Why?

Twitter deleted nearly 70 million accounts from their platform.  It was recently reported that they had been deleting over 1M fake accounts daily. The information of Twitters’s activities were reported by an unknown individual who had access to Twitters data and analytics.

The CFO came out and confirmed the information saying, “These removed accounts were never actually included in our metrics, as they have not been used in the past 30 days. If we deleted 70M accounts included in our metrics we would let our users know.”

Twitter is getting rid of fake accounts at a rapid rate and the stock ended up finishing down only 3.8%.

The company reports earnings July 27th pre-market with a NASDAQ and Reuters forecast of 0.16 EPS. Twitters Q1 earnings hit 0.16 beating analysts 0.12 predictions.

Twitter Profitablilty

Twitter has had its first 3 quarters of profitablity starting with Q3 2017.  With 2018 Q1 net revenue at 61 million, the company owns 22 companies and has 9 international deals. JP Morgan put a price target of $50 on the companies stock which has spiked investors interest since early June where the price sat at $39.

Tiger Global Management, a secretive 16 year old hedge fund has showed its interest in TWTR stock by selling off all of their Alphabet shares, and reinvesting them into twitter.

President Comments on Twitter

President Donald Trump commented on the deleting of accounts via Twitter, saying that they are deleting fake accounts at a rapid rate and calling for the deletion of “New York Times fake news to be deleted.” Saying they are Amazon’s propaganda machine and also targeting the Washington post for having unreliable sources.

trump tweet

 

 

Image Credit