Good morning. Tomorrow is October 31, more popularly known as All Hallows Eve, and most popularly known as Halloween.
If you're new to the Brew, you should beware: We go all out for Halloween. This is our Super Bowl, New Year's, and Wednesday night before Thanksgiving combined. We may even be registered in Delaware as the Morning Boo.
So, as you read today's newsletter, just know we'll have something a lot lighter (darker?) tomorrow morning to get everyone in the holiday spirit. See you then.
MARKETS
NASDAQ
11,185.59
+ 1.64%
S&P
3,310.14
+ 1.20%
DJIA
26,659.04
+ 0.52%
GOLD
1,870.00
- 0.49%
10-YR
0.830%
+ 5.80 bps
OIL
36.39
- 2.67%
*As of market close
Energy: Oil prices dipped to their lowest level in nearly five months. Hopes for a spike in demand are drying up as people start to hunker down for this tough pandemic winter.
Markets: With earnings season hitting its apex, stocks bounced back from their Wednesday plunge. Positive economic data reports (record GDP growth, lower jobless claims) helped.
After the bell yesterday, four Big Tech bigwigs dispatched earnings reports. Taking a page from many of their product strategies, we've bundled up the main points for you below.
Apple posted strong numbers for its fiscal Q4 that modestly beat expectations, with Macs and AirPods offsetting weaker iPhone sales. But it didn't offer guidance for next quarter, so investors don't know what to expect for the just-released iPhone 12.
The context: Apple has worked on shoring up its software and services, plus it's boosted products like AirPods and the Apple Watch. Its hyped Apple One bundle, which combines several services, launches today.
Amazonmade expectations wish they were never born; sales increased 37% yearly to $96.1 billion and profits jumped almost 200%. And that doesn't even include Prime Day. And Amazon has been spending big on warehouses and delivery infrastructure.
The context: The pandemic has boosted Amazon's e-commerce business, but its advertising and cloud computing segments are in fine form, too.
Google parent Alphabet also reported blowout earnings, with profits at $11.2 billion and revenue at $46 billion last quarter.
The context: It looks like Google recovered from its first-ever revenue dip in Q2. But astronomical advertising revenue doesn't exactly bode well for its fight against the DOJ's antitrust allegations.
Facebook beat expectations on both revenue ($21.5 billion) and daily active users (1.8+ billion, up 12% yearly).
The context: Optics-wise, Facebook has had a tough 2020, with magnified scrutiny over its handling of political content and advertising. But numbers-wise, it's done well—last quarter, it officially reached 3 billion monthly users across Facebook, Instagram, WhatsApp, and Messenger.
Bottom line: Earnings season ain't over yet, but these four plus Microsoft account for 46% of the Nasdaq 100. That predominance in the stock market, plus the growing criticism over their market power, means they're watched magnifier-closely.
Yesterday, the Commerce Department posted grades for the U.S.' second ECON-19 midterm. How'd it do?
Q3 GDP* grew at a record annualized rate** of 33.1% from July–August.
*GDP: the value of all goods and services produced in the economy.
**Annualized rate: measured as if the economy will continue growing at that pace for a full year. That's important to distinguish because during Q3, the U.S. reopened the economy after a once-in-a-century pandemic () shut everything down. Not the kind of thing you do multiple quarters in a row.
On a quarter-to-quarter basis, Q3 GDP rose 7.4%, following a 9% drop in Q2. Overall, GDP is down 3.5% this year.
Economists were expecting a rebound following Q2's record drop in economic output. But it's still been an uneven recovery with room to improve: Only half the 22 million jobs lost in March and April have been recovered.
Looking ahead...growth is expected to continue in Q4, albeit more slowly. But the third wave of Covid infections and the lack of federal stimulus could be a drag on those numbers.
Yesterday, Netflix announced its first price hike in nearly two years. The damage:
+$1 on the standard plan, now $13.99/month
+$2 on the premium tier, now $17.99
No change to the basic plan, $8.99
Okay, maybe this won't tank the bank, but it's a big deal. Netflix is expected to pass 200 million subscribers this year, and those dollars add up. Shares rose 3.7% following the news.
The reasoning: Every year, Netflix invests more money in pumping out original content (did you see Holidate?). Execs think that value for customers is worth a pricier subscription.
More original content = a better arsenal for Netflix to fend off a growing list of competitors, including...
Disney+, which is nearing its 1-year anniversary with 60+ million subscribers and a new season of TheMandalorian out today.
WarnerMedia's HBO Max, which parent company AT&T said has 57 million global subscribers.
NBCUniversal's Peacock, which collected nearly 22 million users after three months. (Parent Comcast hasn't disclosed how many are paying.)
That's just the streaming platforms. Netflix is also competing in the eyeball economy against the likes of YouTube, TikTok, Twitch, and even your REM schedule.
Investors are split on who they are voting for (51% Biden vs. 49% Trump).
More than 50% of investors plan to make portfolio changes regardless of who wins.
Investors say the biggest issue in this election is the economy (89%).
With these stats in mind, UBS created their five-part virtual UBS Election Watch series where UBS experts and policymakers—including Jennifer Granholm, Nikki Haley, and Karen Hughes—provide insights into how potential outcomes of the election could impact you as an investor.
This article is part of our weeklong series exploring state-level issues in the upcoming election.
Right now, the Trump and Biden campaigns are all over the commonwealth of Pennsylvania like Sheetzes and Yuengling taps. It's a swing state that boasts 20 electoral votes.
President Trump won Pennsylvania in 2016, but by only 44,292 votes...which wouldn't fill Lincoln Financial Field.
Trump's: claiming dubiously that Biden would ban fracking. Biden has pledged to ban fracking on federal lands and offshore, not overall.
What's fracking again? When a drilling company injects a high-pressure water mixture into a rock formation to release gas.
Why Trump is so focused on it: Pennsylvania produces ~25% of the U.S.' natural gas that comes from fracking. It's been an economic savior for some parts of the state that were hollowed out by the decline of manufacturing jobs, but some Pennsylvanians are against it on environmental grounds.
Bottom line: Fracking really isn't top-of-mind for the majority of Pennsylvania voters. But campaign strategists say that in a state where the race is so close, an issue that can even slightly tip the scales is significant.
Word is they're worth some $$$ and everyone who underestimated them in high school has egg all over their face. Yesterday, Insider Inc., parent of Business Insider, said it's buying a controlling stake in digital media startup Morning Brew at a reported valuation of up to $75 million.
Why the Brew was attractive: Morning Brew expects to bring in $20+ million in revenue this year, has been consistently profitable, and has incredibly good-looking newsletter writers.
Its products include a daily email with ~2.5 million readers, three industry-specific newsletters read by 500,000 subscribers, a new lifestyle newsletter, and a podcast, Business Casual, that's notched 6 million downloads.
Why Insider was an attractive buyer: Morning Brew cofounders Alex Lieberman and Austin Rief said they were drawn to Insider's "history of welcoming entrepreneurs with open arms and empowering them to build their businesses independently."
To that point, Insider's not messing with the Brew's popular brand and will keep it as an independent entity.
Zoom out: While the broader digital news media is struggling in a landscape dominated by tech behemoths, Morning Brew found success by building strong relationships in one of the most underappreciated places: the email inbox.
ExxonMobil's star continues to fade. The energy company announced it'll cut 1,900 jobs in the U.S. and 15% of its global workforce.
Walmart is pulling ammunition and guns off its sales floor ahead of potential "civil unrest" related to Election Day.
Spotify said podcast investments are growing its top line, and defended its handling of an episode of Joe Rogan's podcast that featured conspiracy theorist Alex Jones.
Leon Black, the CEO of private equity firm Apollo Global Management, said on an earnings call yesterday that he made a "terrible mistake" working with convicted sex offender Jeffrey Epstein.
Starbucks offered some hopeful news—that its rebound in 2021 will be better than expected.
Juul, the e-cigarette maker, has slashed its valuation to $10 billion. It was worth $38 billion in 2018.
SPONSORED BY SLACK
Thanks to organized convos, you can actually get stuff done. (If your company uses Slack, that is.) Look down at your email inbox: We bet that unread number is slowly growing, and we bet the majority of those emails are useless. Slack organizes everything into channels, which help conversations stay on topic and work-focused—as opposed to those email chains that could stretch around the equator. Say hello to Slack channels.
BREW'S BETS
Your input needed: You know that Markets graphic up near the top of the newsletter? The one with S&P, DJIA, red arrows, green arrows, and more? We want to make it more useful to you. If you have a sec, take this quick survey to help us shape the future of the Markets section. Thanks!
Election Lite: Guess who voted for Biden or Trump by looking inside their fridges, and geek out over Google search trends by analyzing the most-searched terms this election.
Follow Friday: Ranked in order from least to most spooky, follow ghosthoney on TikTok, Doth on Twitter, Trevor Henderson on Instagram, and the infamous subreddit: nosleep.
Tips on getting Brew referrals: We're always reminding you that you can earn Morning Brew swag by referring friends to this newsletter. But we messed up. We never gave you any tips on the easiest ways to do that. So, whether you're searching for some stickers or ballin' for a Brewneck, this guide will give you actionable tips on how to acquire Brew referrals—and free swag—just in time for the holidays. Read it here.
) shut everything down. Not the kind of thing you do multiple quarters in a row. 
Retail newsletter → 
Tech newsletter → 
Marketing newsletter → 
Quarantine newsletter → 
Business podcast → 
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