Morning Brew - ☕️ Probe pileup

Red Lobster’s fall from grace...
May 15, 2024 View Online | Sign Up | Shop

Morning Brew

Edmunds

Good morning. New newsletter alert!

Introducing Brew Markets, a daily afternoon newsletter taking you deeper into the markets than any Brew has gone before. With meme stocks meme-stocking, the Fed’s interest rates in flux, and AI set to change everything, Brew Markets will be your go-to guide for becoming a smarter investor.

The deets: Each weekday after the bell rings, you’ll get a quick, lighthearted recap of the trading session from editor Mark Reeth and writer Lucy Brewster. Brew Markets, brought to you by a Mark and a Brew. It was meant to be.

Sign up here and keep your eyes peeled for the first issue next week.

—Sam Klebanov, Cassandra Cassidy, Matty Merritt, Adam Epstein, Neal Freyman

MARKETS

Nasdaq

$16,511.18

S&P

$5,246.68

Dow

$39,558.11

10-Year

4.445%

Bitcoin

$61,584.89

Plug Power

$3.44

Data is provided by

*Stock data as of market close. Here's what these numbers mean.

  • Markets: The market powered through Tuesday’s mixed inflation data to post gains off the backs of the ongoing meme stock rally and Biden’s announcement of new tariffs on China. Today’s release of the most crucial inflation data—the consumer price index—could inform when the Fed cuts interest rates. Elsewhere, Plug Power skyrocketed after the Energy Department agreed to a ~$1.7 billion loan to fund its clean hydrogen projects.
 

AUTO

Driverless cars are in the regulatory hot seat

Driverless car in the spotlight Alex Castro

Self-driving cars are feeling the jolt from red and blue lights flashing in their rearview mirror. Alphabet’s Waymo is the latest autonomous vehicle company under federal investigation after the National Highway Traffic Safety Administration (NHTSA) opened a probe earlier this week into 22 incidents involving its robotaxis.

The agency tasked with ensuring your road trips are boring plans to scrutinize all the times Waymo’s cars did reckless things like drive in a lane with oncoming traffic, crash into parked vehicles, or hit other stationary objects.

Probe pileup

The investigation into Waymo makes Uncle Sam’s file on the industry too thick to fit in a glove compartment:

  • A flurry of federal probes descended on GM-owned Cruise after one of its autonomous cars dragged a pedestrian over 20 feet last fall. The infamous incident prompted the company to pull all its driverless cars off the road.
  • The NHTSA is investigating Amazon over two of its Zoox driverless cars getting rear-ended after inexplicably braking.

Tesla is likewise under the microscope as federal investigators try to determine if it misled drivers and investors into believing the Autopilot function makes its EVs fully self-driving. The NHTSA is also looking into whether a recent Tesla software recall went far enough to ensure drivers stay alert, following several serious accidents involving vehicles using Autopilot.

Pushing ahead

Even as Americans have grown more apprehensive about getting in a car with no driver, the companies developing them are determined to make computer chauffeurs mainstream.

Waymo is cooperating with the NHTSA, and pointed out that its robotaxis are making 50,000 trips a week with a strong safety record. Meanwhile, Cruise’s driverless cars hit the road again this week with human safety supervisors on board.

Big picture: Despite federal authorities stepping up to show that they’re not asleep at the wheel, most driverless car rules come from states.—SK

   

PRESENTED BY EDMUNDS

What’s your whip worth?

Edmunds

Whether your ride is a luxury cruiser or just four wheels for gettin’ around, it’s worth something. You might even be sitting on a pretty penny.

Cash in with Edmunds’ instant online car appraisal tool.

It’s free, lightning-fast, super intuitive, and so easy that you can knock it out quicker than a bar from a diss track. Plus, if you’re looking to sell, you can receive an offer on the spot.

Oh, and it gets better. Your offer is good for seven days, and you can even take it to the dealership and negotiate like a pro.

See what you can get for your wheels.

WORLD

Tour de headlines

A vehicle assembly line in China Zhang Yao, China News Service/Getty Images

Biden slapped huge new tariffs on Chinese EVs and other goods. In a major escalation of the US–China trade war, President Biden announced that he plans to quadruple taxes on Chinese electric vehicle imports from 25% to 100% as part of a sweeping series of tariffs meant to protect American manufacturers from the effects of low-cost Chinese products flooding the market. The White House is also raising tariffs on minerals, solar cells, and batteries sourced from China, which critics argue could hurt the US’ ability to hit climate targets. Beijing lambasted the move, calling it “typical political manipulation” in a statement from China’s Ministry of Commerce.

Google is adding AI to your search experience. Starting this week, US users will see a “fully revamped” Google search experience enhanced with AI features, the tech giant announced yesterday. Some searches will come with what the company calls “AI Overviews,” AI-generated summaries that appear above the search results. Publishers are worried that the Overviews will stop users from clicking on their links, but Google claims that links with Overviews actually get more clicks. Google is racing to infuse its products with artificial intelligence as it grapples with OpenAI and Microsoft for dominance in the space.

Do you want a side of Peacock with your Netflix and Apple TV+? Because if you’re a Comcast subscriber, you’ll soon have that option. Comcast announced on Tuesday that it will offer a streaming bundle of Peacock, Netflix, and Apple TV+ for one price to anyone who’s signed up for the company’s mobile, TV, or broadband services. A price tag has yet to be revealed, but Comcast CEO Brian Roberts promised it will be “vastly reduced.” The bundle is yet another example of streaming becoming more and more like the exceedingly bundled linear TV industry it disrupted.

MEDIA

Why you can’t read this chilling crime story in the UK

UK flag superimposed over a document with redacted text Alex Castro

In the New Yorker’s latest viral investigative story, reporter Rachel Aviv questioned the credibility of evidence that put British nurse and convicted serial baby killer Lucy Letby behind bars last year. But a bizarre court order prevents people in the UK from accessing it.

The webpage is blocked in the UK because of a government order that bans the reporting of new material relating to the case. The order is intended to prevent the publication of anything that may prejudice a jury, as Letby is scheduled to face a retrial for one count of murder next month.

Not everyone’s OK with it…one Member of Parliament criticized censorship of the article, calling it “in defiance of open justice,” a UK legal principle that mandates judicial proceedings be conducted transparently to the public. The justice secretary said that “court orders must be obeyed.”

Big picture: The case has been shrouded in confusion, creating difficulty for journalists trying to report on it. The judge permitted total anonymity for all seventeen victims, their families, and eight hospital workers who were witnesses in the case—a status typically only granted if there’s a risk to life or national security.—CC

   

TOGETHER WITH CONTENTFUL

Contentful

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FOOD & BEV

There will be at least 99 fewer Red Lobsters

Red Lobster location with empty parking lot Justin Sullivan/Getty Images

The surf and turf has been added to the endangered species list. Your grandparents’ favorite fancy seafood chain, Red Lobster, is shuttering at least 99 locations, about 15% of its restaurants, as it attempts to stave off bankruptcy.

Red Lobster’s fall from grace: The iconic chain opened its first location in 1968 an hour outside of Orlando, Florida, and revolutionized casual dining. But by the 2010s, declining sales pushed corporate parent after corporate parent to offload the crustaceous brand.

  • A 2014 sale included a sale-leaseback agreement, which forced Red Lobster to take on the added cost of pricey leases.
  • Longtime shrimp provider Thai Union bought a stake in 2016 and tried to boost profits by slashing suppliers and gutting wait staff schedules. It upped its stake in 2020, and by the time it said it was looking for an out this year, the brand was tarnished and exec churn was off the charts.
  • Thai Union also made $20 endless shrimp part of the permanent menu instead of a limited-time promotion, which it said led to the chain losing $11 million in Q3 last year.

Bottom line: Red Lobster has been searching for a new owner for months, but even if a cheddar bay biscuit buyer materializes, bankruptcy may be inevitable.—MM

   

GRAB BAG

Key performance indicators

AMC logo George Rose/Getty Images

Stat: The apes have come to save AMC once again, and we’re not talking about the new Planet of the Apes movie boosting the box office. The theater chain completed its sale of 72.5 million shares and raised $250 million in new capital, thanks to this week’s meme stock rally sending the company’s stock price soaring. Technically, the new shares dilute the very same retail investors who are responsible for AMC’s resurgence, but those “apes,” as they call themselves, may not mind if the cash influx helps the struggling theater operator stay afloat. AMC is still trying to chip away at its hulking $4.6 billion debt as consumers have been slow to return to theaters post-pandemic.

Quote: “This brand is Golden State’s modern interpretation of Valkyries: strong, bold, and fierce.”

Great news for sports fans who took a class on Norse mythology in college and only remember a handful of words from it: Your coursework has paid off. The Golden State WNBA franchise announced that it will be named the Valkyries, aka the female goddesses who guide fallen warriors to the afterlife according to Nordic folklore. In a press release, the team explained the origin of the name and revealed its violet logo, which is shaped like a V and depicts San Francisco’s Bay Bridge. The Valkyries—the WNBA’s first expansion team since 2008—will share an arena with the NBA’s Golden State Warriors when they debut in 2025.

Read: How the “Harvard of trading” ruined thousands of lives. (Bloomberg)

NEWS

What else is brewing

  • Georgian parliament passed the controversial, Kremlin-style “foreign agent” law, which could jeopardize the country’s admission to the EU and NATO.
  • Alice Munro, the Nobel laureate regarded as one of the greatest short-story writers of all time, died yesterday at 92.
  • Walmart laid off hundreds of corporate employees and forced others to relocate in an effort to cut costs and push for more in-person work.
  • Amazon Web Services CEO Adam Selipsky, who has been at the company for 14 years, is stepping down and will be replaced by 18-year Amazon vet Matt Garman.
  • Jeopardy! is getting a pop culture spinoff on Amazon Prime Video.
  • The orcas are back: An unknown number of killer whales sank a yacht in Moroccan waters, the latest in a string of rammings befuddling scientists.

RECS

Wednesday to-do list

Get briefed: A fascinating collection of internal company memos from Steve Jobs, Bill Gates, and more.

Analyze: See how housing prices have changed in your zip code.

Watch: A Seattle Mariners fan somehow caught two foul balls in a row.

Pretend you’re at the Riviera: The 26 Cannes Film Festival movies IndieWire is most excited about.

Get your finances in order: Track your income, spending, investing, and more with Money with Katie’s 2024 Wealth Planner. Join 15,000+ Rich Girls and Boys and grab yours today.

Bye-bye, bugs: Get 80% automated E2E web app coverage in just four months with QA Wolf. With QA cycles complete in minutes (not days), bugs don’t stand a chance. Learn more about their 90-day pilot.*

Let’s chat: We’ve got questions. And by taking a short survey to answer them, you’ll have the chance to win a $250 Apple Gift Card. Take the survey here.*

*A message from our sponsor.

GAMES

The puzzle section

Word Search: What happens in Vegas, comes to Word Search. Press your luck here.

Trophy-less trivia

What is the most populous country to never have won an Olympic medal?

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ANSWER

Bangladesh. They’ll try to break the spell in Paris in a few months.

Word of the Day

Today’s Word of the Day is: lambasted, meaning “criticized harshly.” Thanks to Nate from West Palm Beach, FL, for going easy on us with the suggestion. Submit another Word of the Day here.

         
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