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Yesterday, Best Buy jumped from “I forgot about you” to “pesky mosquito” on Jeff Bezos’s hit list. The electronics retailer flexed some impressive Q2 earnings, including $9.9 billion in revenue, sales increases in nearly every category, and same-store sales growth at a two-year high. Despite a slight dip yesterday, its stock remains near a record. 

These earnings are worth a closer look, because Best Buy sits smack dab in the middle of some of the biggest economic trends.

1. An ecommerce boom lifted online sales 242% yearly in the U.S. Best Buy is expecting this shift to last beyond the pandemic, which means some changes ahead.

• Next month, Best Buy’s converting about a quarter of its stores into shipping hubs to boost delivery speeds. It’ll also add more third-party locations for customer pickups, on top of the 16,000 it currently has.

2. People are working from home, which means sprucing up the home office, upgrading the laptop/tablet, and splurging on an air fryer. Best Buy customers are also shelling out for wellness products like home fitness gear, outdoor and camping equipment, and digital health.

3. Back to school season looks different. With many schools pivoting to hybrid or remote learning, parents turned to Best Buy to get their kids the necessary gadgets. But all that demand has led to an inventory crunch. 

• Bulk orders from school systems and sanctions on Chinese suppliers have left laptops and tablets in short supply. 
• Last week, Best Buy had 36 Chromebook models costing under $500 listed on its website. 33 were sold out, the AP reports.

4. Consumer spending was propped up in July by stimulus checks and extra unemployment benefits. But after benefits expired, shoppers tightened purse strings, Best Buy said. And consumer confidence just hit its lowest level in six years. 

Looking ahead...Best Buy is holding off making predictions for the rest of the year and carefully watching negotiations on the Hill for new COVID-19 stimulus measures. It could get some fuel from the upcoming holiday season and fall product launches, including the new iPhone.

AVIATION

AA Major Round of Layoffs Ahead

Yesterday, American Airlines said its headcount will shrink by 30% below March levels by Oct. 1. 

• That’s 19,000 involuntary cuts and furloughs, including pilots, flight attendants, management staff, mechanics, and others. 

The backstory: The pandemic has devastated air travel. So as part of the CARES Act Congress passed in March, U.S. airlines nabbed $25 billion to keep workers on the payroll. But that bailout money is running out, and the summer travel bump (as small as it was) is almost over. 

• The industry hoped for a fresh infusion, but talks for another aid package in Congress have stalled. 
• And like a “minor delay” on the tarmac, there’s no end in sight for the air travel slowdown. Demand is around 30% of last year, and execs say a full rebound will take years. 

American’s woes are just one example of the industry's deep rut. Last month, United sent notices to 36,000 employees saying they could be furloughed. 

Bottom line: This is “the clearest sign yet of the devastation coming for the airline industry," writes the WSJ.

WORKPLACE

Workplace Drug Use Hits a...We’re Not Gonna Say It

A new report from Quest Diagnostics showed that 4.5% of U.S. workers tested positive for drugs last year. That’s the highest percentage in 16 years, and it represents a 29% increase from 10 years ago. 

One driver? More marijuana use—the number of workers testing positive for marijuana was up 11% over 2018. That number increased 29% over 2015, the time frame when about a half a dozen additional states legalized marijuana for recreational use. Some employers in those states are slowing their roll on marijuana testing, but not for jobs that involve serious safety hazards. 

As for 2020...we don’t know just yet, but initial data indicates substance abuse and drug-related deaths are trending up as the pandemic disrupted everyone’s social and professional lives. 

• A NYT analysis showed that as of July, drug deaths had risen an average of 13% yearly. 

Some Good News to read to yourself in John Krasinski voice: Positive tests for opiates continued their decline in 2019. 

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PUBLIC HEALTH

Follow the Herd

Herd immunity: when enough people have developed immune resistance to stop a pathogen from spreading. This can happen by vaccination or old fashioned cough-on-your-desk-buddy infection.

Why it matters: Researchers are trying to suss out the threshold needed to stop COVID-19’s spread. Some peg it at 50% of a population or less.  

Are we close? 

Cities with severe outbreaks this spring may have experienced enough community transmission to develop some form of herd immunity.

• NYC hasn’t seen a major uptick in infections this summer.
• In some urban areas in India, where as many as 60% of residents contracted COVID, new cases have begun to slow.
• The city of Manaus experienced one of Brazil’s worst outbreaks, but hospitalizations and deaths have fallen sharply since May. And Manaus never imposed strict lockdowns.  

One country took a high-profile gamble on herd immunity. Sweden kept businesses open this spring, and a handful of health experts say the country has developed resistance. 

Zoom out: Many medical leaders are wary about declaring herd immunity. Subsequent outbreaks could still occur, and immunologists don’t know how long an immune response lasts.

ENTERTAINMENT

Napster Enters Its Third Life

Get ready to feel old and young at the same time: Napster just sold for $70 million to a virtual reality concert company. 

MelodyVR allows users to watch concerts in VR; it’s already done events with the likes of Post Malone, John Legend, and Khalid. Now, it wants to add music streaming to its platform. 

Enter Napster. The brand launched in 1999 as a music-sharing platform...which is a nice way of saying it lets listeners commit music piracy. The company went bankrupt after artists sued, then bounced around various owners until it was acquired by streaming service Rhapsody in 2011. 

• Five years later, Rhapsody rebranded as Napster and added B2B to its D2C mixtape.

Big picture: Napster might have just 1% of Spotify's paying customer base, but it’s still one of the most recognizable names in digital music. Paying for at-home VR concerts might’ve been a tough sell for MelodyVR last year, but in this economy...

TECH

Us Trying to Sound Smart About AI

Artificial intelligence is really complicated—there’s a reason why people who work in the field have an average of 7.5 PhDs.  

But AI and related concepts like machine learning are playing an increasingly important role in our lives, shaping everything from the videos on our TikTok feed to the global stock market.

To help explain what AI is and why it matters, Emerging Tech Brew put together an incredible guide that’ll answer all your questions, including…

• What is an algorithm?
• Should we be worried about AI bias? 
• Is AI a serious threat to human jobs? 
• Why was WALL·E snubbed of a Best Picture nomination? 

Bottom line: Get smart on AI and read the guide.

WHAT ELSE IS BREWING

• Palantir, the secretive tech firm, revealed registration docs to go public via a direct listing. It lost $580 million in 2019.
• Salesforce is ready for its Dow closeup. The enterprise tech company beat earnings and its stock flew 12% after hours. 
• Teva Pharmaceutical's U.S. business was indicted on price-fixing charges.
• Tim Sweeney, the fascinating founder and CEO of Epic Games, is profiled by the NYT.
• Laura is expected to make landfall near the Louisiana-Texas border late Wednesday/early Thursday as a major hurricane.
• Lionel Messi, the soccer star with magical feet, reportedly told Barcelona he wants to leave the club. There is contract drama galore. 

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BREW'S BETS

How do you measure up? This fun site lets you input measurements to get interesting comparisons. We immediately dialed in our own heights and weights and now know we sit comfortably between a Giant Pacific Octopus and half a reindeer. 

Mindless fun: Be your company's hero today by sharing this seriously addicting game developed by the good folks at Italian startup Gamindo. The Brew almost didn’t get written today because of the high-score chase. 

For the designers...IKEA just released 70 years-worth of their catalogs in digital format. It's a feast for your eyes.

FROM THE CREW

After the Dow’s biggest shakeup in seven years, we’re now left with these 30 companies in the index:

3M, American Express, Amgen, Apple, Boeing, Caterpillar, Chevron, Cisco, Coca-Cola, Disney, Dow, Goldman Sachs, Home Depot, Honeywell, IBM, Intel, Johnson & Johnson, JPMorgan, McDonald’s, Merck, Microsoft, Nike, P&G, Salesforce, Travelers, UnitedHealth, Verizon, Visa, Walmart, Walgreens

Here’s our question: If you had to bet your entire life savings on one company being in the Dow in 2120 (100 years from now), what would it be? Join the conversation here. 

STAMP TRIVIA

How much does this stamp cost? 

STAMP TRIVIA ANSWER

The price of a First-Class Mail Forever stamp is 55 cents. 

** A Note From eToro

eToro USA LLC; Investments are subject to market risk, including the possible loss of principal.

*$50 bonus is limited to the first 1,000 participants.