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Tuesday, August 27, 2019

Fwd: ☕️ Kentucky fried...what?





AUTO-BLOGZ

KFC goes above and Beyond...
August 27, 2019 Read in Browser

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One day into our partnership with DonorsChoose.org, we've already raised thousands of dollars to help public school teachers fund classroom projects. Let's keep the momentum going today. Scroll down to share the Brew with your community.

 


MARKETS

S&P

2,878.69

+1.11%

NASDAQ

7,853.74

+1.32%

DJIA

25,901.40

+1.06%

10-YR

1.539%

+0.2 bps

GOLD

1,538.10

+0.03%

OIL

53.78

-0.72%

*As of market close

  • Trade: Nothing investors (or French President Emmanuel Macron) love more than the promise of a U.S.-China trade deal.
  • U.S. markets: Actually, they might love summer vacation more. Trading volume was almost 20% below average yesterday.

 


PHARMA

Johnson & Johnson Gets Mixed Messages in Historic Trial

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Francis Scialabba

Yesterday, an Oklahoma judge ruled that drugmaker Johnson & Johnson must pay $572 million to the state for its role in the opioid crisis that killed more than 47,000 Americans in 2017 alone.

The details

  • What Oklahoma said: State Attorney General Mike Hunter argued that Janssen, J&J's pharmaceutical subsidiary, created a "public nuisance" by misinforming both doctors and the public about the addictive risks of painkillers as early as the 1990s. The state called J&J the "kingpin" of the crisis. 
  • What J&J said: It lawfully marketed and sold prescription opioid painkillers, and its products account for under 1% of the Oklahoma opioid market (a stat the state disputed). It's appealing the decision.

J&J could have made out much worse. Oklahoma was seeking over $17 billion, while investors penciled in a fine of up to $5 billion, per Evercore. J&J shares rose after hours given the lighter-than-expected fine. But still…

Giphy 

So what comes next?

The seven-week trial was the first by a state seeking compensation for an opioid-driven public health crisis. 

And the entire industry was nervously watching. Oklahoma's decision to hold a pharmaceutical company accountable for contributing to the opioid crisis could set a precedent for the roughly 1,900 pending cases against J&J, Purdue, Teva, and other prominent drugmakers. 

  • Some experts have suggested opioid producers could have to pay up to $100 billion to resolve their liability for the opioid crisis.

Food for thought: The "public nuisance" argument Oklahoma used is traditionally wielded in property disputes, the WSJ reports. But it was also used successfully to fight Big Tobacco in the 1990s, resulting in a $246 billion settlement in 1998.

        

 


C-SUITE

Kraft's Out With the New, in With the Old

On September 1, Paulo Basilio, Kraft Heinz's CFO from 2015 to 2017, will return to the company and replace its current CFO, David Knopf. 

Knopf became the youngest CFO of a Fortune 500 company when he took the Kraft Heinz (+0.99%) job at 29. Now 31, Knopf loves going to bed at 10pm on the weekends and will return to 3G Capital, the PE firm that merged Kraft and Heinz in 2015.

New blood doesn't always do the trick. During both Basilio's and Knopf's tenures, Kraft Heinz has been plagued by weak sales and accounting errors. Per the WSJ, it has...

  • Restated financial earnings dating back to 2016 after flubbing certain costs by $208 million.
  • Marked down the value of its brands by close to $17 billion this year.
  • Reported a 5% annual decrease in net sales for the first half of 2019.

Zoom out: Facing growing private label competition and shrinking demand for purple ketchup, Kraft Heinz will face challenges charting the "new course" CEO Miguel Patricio has planned.

        

 


INTERNATIONAL

Indonesia Moves Capital to Avoid Another Atlantis

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Image by iqbal nuril anwar from Pixabay

He's not buying Greenland, but Indonesian President Joko Widodo did announce Monday he's relocating the nation's capital from Jakarta to the island of Borneo. 

Why Jakarta's out: The roughly 30 million people living in the area contribute to excessive pollution and traffic (gridlock and public transport issues cost Jakarta $7 billion a year). Plus, parts of the city are sinking over seven inches annually. 

  • Jakarta's environmental issues are largely its own doing. The city has polluted water resources and pulled out so much groundwater the land is sinking, NPR reports

Widodo wants to spread the wealth 

Generating nearly 20% of Indonesia's annual GDP, the Jakarta metro area is hogging the economic spotlight. The new capital will sit across largely undeveloped areas in Borneo's East Kalimantan province.

  • Done right, Indonesia could create a greener, more modern, smart-city successor to Jakarta and bring infrastructure and economic activity to Borneo. 
  • Done wrong, Indonesia could find itself spending up to $32.8 billion on a new city only to repeat the same environmental mistakes. 

The new capital doesn't have a name yet, but one definitely comes to mind: Albany. 

        

 


TRADE

How to Explain to an Alien We're in a Trade War

When a journalist from the next galaxy over rings your doorbell and asks, "Could you help my planet understand a few concrete business impacts of a trade war?" here's what you can tell them…

1. UBS Global Wealth Management, our planet's largest wealth manager, said it is going "underweight" on equities for the first time since 2012. That means it recommends its customers reduce exposure to stocks relative to other assets. 

  • The reason: President Trump's threats of higher tariffs on China last Friday increased risk for global markets and the economy. 

2. U.S. lobster exports to China are in freefall, reports the AP. Through June of this year, the U.S. exported less than 2.2 million pounds of lobster to China. It's more than an 80% drop from the roughly 12 million pounds exported over the same period last year.

  • The reason: China hit U.S. lobsters with tariffs last summer. 

Looking ahead...President Trump said optimistically yesterday, "I think we're going to have a deal." 

+ Some light reading for the UFO ride home from GZERO Media.

        

 


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TOGETHER WITH CHARLES SCHWAB

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FOOD

We Never Thought This Day Would Come

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KFC

The meatless revolution has breached the castle walls. Today, a KFC store near Atlanta is rolling out Beyond Meat's plant-based nuggets and boneless wings, all but guaranteeing fried chicken will remain in the news cycle for a second straight week. And Popeyes's social media guy was just catching up on some sleep...

Beyond Meat (+5.64%) founder and CEO Ethan Brown said, "My only regret is not being able to see the legendary Colonel himself enjoy this important moment."

Here's a non-exhaustive list of restaurant chains currently selling vegan meat:

  • Burger King—Impossible Whopper
  • Carl's Jr.—Beyond Famous Star
  • Del Taco—Beyond Taco
  • Dunkin'—Beyond Sausage Breakfast Sandwich
  • Red Robin—Impossible Burger
  • TGI Fridays—Beyond Burger 
  • White Castle—Impossible Slider

        

 


BACK 2 SCHOOL

What's Your Favorite School Memory?

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Giphy

  • Frank, UI/UX designer: "Sophomore year food fight...my favorite Volcom shirt was destroyed."
  • Alex, CEO: "Getting Saran wrapped to a pole."
  • Alessandra, brand partnerships: "In kindergarten, I learned how to rope a calf. Texas things." 

Now that you're all nostalgic about school, can we interest you in helping out teachers in need? For every new reader who signs up to the Brew this week, we'll donate $1 to DonorsChoose.org, a nonprofit that helps public school teachers fund classroom projects and programs. 

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WHAT ELSE IS BREWING
  • Amgen (+3.18%) will buy the psoriasis drug Otezla from Celgene (+3.20%) for $13.4 billion in cash. The deal will relieve antitrust concerns over Bristol-Myers Squibb's (+3.28%) pending takeover of Celgene.
  • Facebook (+1.47%) is developing an Instagram companion app called Threads to promote "constant, intimate sharing," per The Verge.
  • The city of Newark, NJ, received a $120 million loan to help fix its ongoing lead water crisis more quickly.  
  • Felix "PewDiePie" Kjellberg is the first individual creator to eclipse 100 million subscribers on YouTube. 
  • Kim Kardashian's shapewear line has a new name: Skims. The original name, Kimono, was criticized as cultural appropriation.
  • Major brewer Constellation Brands (+1.98%) said it'll record a $54.8 million loss this quarter on its investment in Canopy Growth (+0.60%), a marijuana producer.

 


BREAKROOM

Brew's Bets

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*This is a sponsored post

For the 'Gram

Thought you were done with English class forever? Not when you read the Brew. We're going to give you four excerpts from the WSJ. Can you pick out the style or grammar error?

  1. "That same year, tensions between Mr. Ford and Mr. Iacocca came to a head. By then, he had an annual salary of $1 million a year."
  2. "Much of the expense is born by existing shareholders, with other shareholders sometimes benefiting from a settlement or judgment."
  3. "Before her address, Ms. Warren told reporters that she had no plans to attack fellow Democrats, even though she has sought to contrast her positions with Mr. Biden."
  4. "Some companies, including American Express, Best Buy and Citigroup, list the metric as a criteria for executive compensation."

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BREAKROOM ANSWERS

For the 'Gram 

  1. Writing both "annual" and "a year" is redundant.
  2. "Borne" not "born."
  3. It should be "Mr. Biden's." She's contrasting her positions with his positions, so you need the possessive. 
  4. "Criterion" is the correct singular version of the word. 



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From: Morning Brew <crew@morningbrew.com>
Date: Tue, Aug 27, 2019 at 6:55 AM
Subject: ☕️ Kentucky fried...what?

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