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Andy Jassy cleans up after Bezos...
June 18, 2022 View Online | Sign Up | Shop

Morning Brew

The Ascent

Good morning. BIG weekend on tap. Today is, well, just a regular Saturday, but tomorrow is Father’s Day and Juneteenth, which was designated as the 11th federal holiday last year.

For many of you it’s a long weekend. 30% of private employers are offering Juneteenth as a day off, according to a new survey. And since it falls on Sunday this year, that means no work on Monday.

Neal Freyman, Jamie Wilde, Matty Merritt

MARKETS

Nasdaq

10,798.35

S&P

3,674.84

Dow

29,888.78

10-Year

3.236%

Bitcoin

$20,647.21

Chevron

$148.38

*Stock data as of market close, cryptocurrency data as of 6:00pm ET. Here's what these numbers mean.

  • Markets: Despite rising slightly yesterday, the S&P just posted its worst week since March 2020, when…you know what happened. Even energy stocks, one of the lone bright spots in the market, have taken a beating during this higher interest-rate era. Perhaps the only good news investors can look forward to is a three-day weekend; the US stock market will be closed for Juneteenth on Monday.

E-COMMERCE

Amazon’s vibe shift under Andy Jassy

Amazon logo with a parachute attached to it Francis Scialabba

Almost one year into his tenure, Amazon CEO Andy Jassy has introduced speed limits on the potentially reckless superhighway Jeff Bezos created.

A new report by the WSJ describes how Jassy is trying to rein in some of his predecessor’s overly ambitious expansion plans, at a time when Amazon is facing its most challenging financial period in years.

  • As a result of higher costs for everything and slowing e-commerce sales, in Q1 the company posted its first quarterly loss since 2015 and its slowest revenue growth in about 20 years. Revenue for its online stores unit even fell by 3% that quarter.
  • Plus, Amazon’s stock has fallen nearly 40% since Jassy started on the job last July, equivalent to a more than $600 billion wipeout in value. A few days after he started, the company’s stock hit a record high.

So what’s Jassy doing?

Like all of us, finding new clothes that fit our post-pandemic body.

  1. First, he’s reconsidering the idea that Amazon needs as many warehouses as 7-Eleven locations. In response to too much capacity, Amazon is reportedly planning to sublet a minimum of 10 million square feet of warehouse space (which sounds like a lot, but it’s still only 5% of the footprint that the company added during Covid).
  2. Jassy was also not impressed by Amazon’s push into brick and mortar. In March, he closed more than 50 of the company’s retail locations, nearly half of which were physical bookstores.
  3. Finally, he’s trying to solve the problem of overstaffing at some warehouses. In less than two and a half years, Amazon hired roughly the same number of employees as the combined workforces of UPS and Costco—and following the Omicron wave, it found itself with too much labor (expensive!).

Big picture: Along with so many others that benefited from the pandemic, Amazon’s leadership team got duped into believing that certain Covid trends—a boom in online shopping, for one—would be written on the economy in Sharpie. Now that we know it’s more like chalk, Jassy and Co. need to figure out how to kickstart growth, responsibly.—NF

        

TOGETHER WITH THE ASCENT

Unlimited 2% cash rewards? Ahhh, delicious.

The Ascent

Like scoring free refills on fountain soda, some things in life are just sweeter when they’re unlimited. Same with this card here—it comes with unlimited 2% cash rewards on purchases, no activation required.

So even if you can’t get free refills, you can still enjoy 2% cash back every time you fill your cup. Ahhh, de-lish.

Let’s have a look-see at what else you get with this bad boy:

  • 0% intro APR on purchases and qualifying balance transfers for over a year (read: pay no interest until late 2023)
  • unlimited 2% cash rewards (it’s worth repeating)

The only limit to these cash rewards is the time you’re spending right now, NOT using this card. Apply here.

WORLD

Tour de headlines

Vince McMahon attends a press conference Michael N. Todaro/Getty Images

Vince McMahon steps back. The CEO, chairman, and figurehead of WWE is taking extended PTO while the board investigates him for potential misconduct. McMahon allegedly paid a secret $3 million settlement to a departing employee with whom he had a consensual affair, according to a WSJ report earlier this week. McMahon will still oversee WWE’s creative content while on leave, but his daughter, Stephanie McMahon, will effectively run the company.

SpaceX sacks employees who criticized Elon Musk. Just a few days after some SpaceX employees circulated a letter calling Musk’s public behavior a “distraction” and an “embarrassment,” the company reportedly fired at least five of the organizers. “We have too much critical work to accomplish and no need for this kind of overreaching activism,” SpaceX President and COO Gwynne Shotwell said.

The chip shortage strikes again. But not in the way you might think. As the Biden administration was brainstorming ways to help out Americans at the gas pump, it considered sending out rebate cards to Americans. Just one problem: There aren’t enough computer chips to make cards in the volume required, so the White House scrapped that plan a few months ago, according to The Washington Post. It’s apparently taking a second look now.

COVID

Get your Paw Patrol Band-Aids ready

Vaccine needle with traffic light as body showing green light. Francis Scialabba

The FDA authorized two Covid-19 vaccines, Pfizer and Moderna, for kids under five yesterday—a year and a half after vaccines were approved for adults 16+.

Big picture: Although kids are less likely to have a severe case of Covid-19 than adults, it’s still “a top killer of children right now,” CDC Director Rochelle Walensky said. The agency also found that…

  • More than 440 children four and younger have died from Covid-19, and the highest fatality rate is found among infants under one.
  • More children have died from Covid-19 than did from hepatitis A, chickenpox, and rotavirus before their respective vaccines were rolled out.

But vaccine hesitancy could keep parents from rushing to jab their kids: Less than 40% of 5–11-year-olds have received one or more doses, nearly eight months after a vaccine was authorized for their age group.

And stoking parents’ concerns this week, Florida Gov. Ron DeSantis said “we are affirmatively against the Covid vaccine for young kids,” arguing that they need more testing and trials. The state became the only one to not order any vaccines for kids five and younger, though they’ll still be available through non-state-run programs.

Looking ahead…the Biden administration started shipping tot shots yesterday, so they could be available as early as next week.

        

HISTORY

Watergate's linguistic legacy

The Watergate Complex in the 70s. Filippo Carlot/Getty Images

50 years ago yesterday, cops caught five burglars breaking into the Democratic National Committee office in the Watergate building in Washington, DC. The criminals went to jail, and that’s the end of that story!

Nixon wishes. The burglary kicked off the infamous Watergate scandal that ultimately led to former President Richard Nixon’s resignation and a number of high-ranking government officials ending up in prison. But the event left an even bigger legacy: slapping “-gate” on the end of just about every scandal.

Gategate. The suffix took a while to take off; it was occasionally used by newspapers and a satire site in the years following Watergate to describe various scandals. But no one worked harder to lay the groundwork for Nipplegate and Bridgegate than William Safire, a conservative NYT columnist and former Nixon speechwriter. Safire coined so many “-gate” terms during the Jimmy Carter and Bill Clinton presidencies that we simply do not have the word count to share them all.

In the last 20 years, the media became obsessed with adding the suffix to events that don’t come close to the level of scandal as Watergate—such as the controversy around the pressure of footballs used by Tom Brady, known as “Deflategate.”

But this isn’t a uniquely US phenomenon. In the ’90s, Italian media referred to a political corruption scandal as “Tangentopoli” (which roughly translates to “Bribesville”), and now “-poli” is Italy’s own “-gate.”—MM

        

GRAB BAG

Key performance indicators

Hands of God and Adam, detail from The Creation of Adam, from the Sistine Ceiling Art Images via Getty Images

Stat: A record low 81% of Americans believe in God, according to a new Gallup poll. Something must have changed in just five years (TikTok?), because 87% did in 2017. And between 1944 and 2011, more than nine in 10 Americans believed in God. Young, liberal Americans are the least likely to believe in God, per Gallup.

Quote: “Oh, right there, yes!”

Is it hot in here, or is that just the trash can? Actually…it is the trash can. Some receptacles in the Swedish city of Malmö have been equipped to talk dirty to people who throw away their trash. It’s a campaign intended to help clean up the city’s streets.

Read: A deep dive into nightmares. (Astral Codex Ten)

TOGETHER WITH FUNDRISE

Fundrise

We’re a third of the way through 2022. Have you checked on your investments yet? Stabilizing your portfolio could be a sound idea in these ~uncertain~ times. Find out if real estate investing should be your next money move in this article we created with our friends at Fundrise.

CARTOON

Saturday sketch

A cartoon about AI-generated images Max Knoblauch

        

WHAT ELSE IS BREWING

  • Starbucks’s president of North America, Rossann Williams, is departing the company in another leadership shakeup under CEO Howard Schultz. She played a prominent role in Starbucks’s fight against unionization.
  • The average price of an EV topped $60,000 last month, according to Edmunds.
  • Snap said it’s working on internal tests of a subscription product called—what else—Snapchat Plus.
  • When mandatory fun goes wrong: 25 employees of a Swiss ad agency were injured while walking on hot coals for a team-building exercise.
  • HBO is reportedly developing a Game of Thrones spinoff with a focus on Jon Snow, who will be once again played by Kit Harington.

BREW'S BETS

Weekend conversation starters:

A pod with loads of career advice: In this women-focused podcast, you’ll learn how to be more fulfilled, healthy, and successful at work. Expect numerous “aha” moments. Listen now.

Why does every brand’s design look the same? Go inside the world’s most hated art style.

GAMES

The puzzle section

Brew crossword: Today’s crossword pairs well with an Adirondack chair and mimosas. Play it here.

Open house

Welcome to Open House, the only newsletter section that can spot an abandoned 2000s housing bubble project from a mile away. We’ll give you a few facts about a listing and you try to guess the price.

McMansion in Vermont with unfinished interior in the middle of a dense forest. View of Lake Memphremagog.Zillow

Today’s monstrosity of a listing is what you would build in Sims 2 after using the “Motherlode” cheat code way more than you should. The 13,600-square-foot home sits on 10 and a half acres of land in Derby, Vermont, just 10 minutes south of the Canadian border. It was built in 2006, and only 70% of its interior is finished. Amenities include:

  • 8 beds, 13 baths
  • Loose staircase
  • Four-story tower with observation room
  • Attached three-car garage, detached five-car garage

How much for a place that’s so close to being the perfect McMansion?

Is this the beginning of the end for crypto?

Our trusty old friend Internet Explorer is laid to rest, the Fed spikes the punch bowl, and crypto implodes. Watch this video to review what happened this week.

Don’t miss out on more from the Brew:

Find out exactly how much Katie Gatti’s wedding cost.

🖥 The Excel Shortcut Guide mouse pads—available in Mac and PC versions—are lifesavers for anyone who makes spreadsheets. Get yours now.

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ANSWER

$2.5 million

         

Written by Neal Freyman, Jamie Wilde, and Matty Merritt

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