MARKETS

Reading Into the Market’s Recent Stumbles

Wrapped up in Thursday’s fourth-largest daily point drop in Nasdaq history, and yesterday’s grim-but-not-as-grim second act, is a series of intriguing storylines.

Green traders get battle scars

The rash of inexperienced individual investors getting involved in risky options trading has been a consistent theme during the market’s epic rally. And vets who preached caution are finally getting their “told you so” moment. With $730 billion worth of value erased from the Nasdaq on Thursday, lots of poorly timed options contracts were wiped out. 

Insiders have been selling

U.S. executives sold $6.7 billion worth of their own companies’ stock in August. If that sounds like a lot, it is.

• Last month’s garage sale was the largest monthly tally since November 2015, while the number of execs cashing out was the highest in two years, according to the FT.  

Selling activity like this paints a less-than-optimistic picture for the future, but who can blame insiders for “harvesting a once-in-a-millennium bonanza,” macro strategist Vincent Deluard told the FT. 

SoftBank flies too close to the Son

Never one to miss out on massive trades with extreme risk, the Japanese tech conglomerate led by Masayoshi Son has been revealed as the “Nasdaq whale” that’s been snapping up an astonishing amount of options tied to Big Tech companies. In addition to buying nearly $4 billion worth of shares in the likes of Amazon, Apple, and Netflix, SoftBank reportedly spent another $4 billion purchasing bullish call options that would pay off bigtime if those stocks hit a certain level in the future. 

Some investors say SoftBank's activity may have been partly responsible for the recent surge in Big Tech stocks. 

• Flashback: Now might be a good time to remember Son lost over $130 million of his own money after getting into bitcoin around its peak in 2017. 

Bottom line: Most analysts say not to read too much into the recent sell-off, given the Fed's pledge to support markets with liquidity and the ongoing economic recovery. 

REAL ESTATE

Amazon’s Hiring Team Is Going Beast Mode

Bezos is out here memorizing Rachmaninoff's third while the rest of us are learning “Chopsticks.” The same day stocks continued their sell-off and the jobs report showed a labor market still in tatters...Amazon said it’s creating 10,000 more jobs in Bellevue, WA, a city near its Seattle HQ. 

• That’s in addition to the 25,000 it already planned to hire in Bellevue in February.
• That’s in addition to the 175,000 people it hired earlier in the pandemic as demand surged.

Unlike some other Big Tech companies, like Facebook and Twitter, Amazon thinks a physical office is the key to world domination, and it’s building massive developments in the Seattle area to accommodate future employees. That’s sure to face some pushback, though, since the company’s footprint has been blamed for exacerbating Seattle’s housing crisis. 

Bottom line: Amazon will eventually have as many employees in Bellevue as its “HQ2” in northern Virginia.

INTERNATIONAL

From the International News Desk

Believe it or not, there is a world beyond the local Bertucci’s. Let’s get an update from our foreign correspondent, Carlisle Sanfrancisco. Carlisle?

Spain: Looks like soccer wizard Lionel Messi will remain with Barcelona for one more year. Messi caused a minor earthquake after he made moves to leave the club this summer, but in the end, he wanted to avoid what would’ve been a bitter legal dispute over his contract. He still called the club’s management a “disaster.” 

The Balkans: Kosovo and Serbia, two countries with a violent past, normalized economic relations in a White House ceremony. Israel also played a big role—it established diplomatic relations with Kosovo, and Serbia said it would move its embassy to Jerusalem.

Japan: A cargo ship sank off the coast this week after running into Typhoon Maysak. It was carrying 43 crew members and nearly 6,000 cattle from New Zealand to China. Rescue operations are underway, but only a couple of survivors have been found. 

Italy: The Venice Film Festival, the world’s oldest, is actually happening. It started on Wednesday and runs through the 12th.

SPONSORED BY SKILLSHARE

Abandon the Slime

We’ve spent our entire summer vacation attempting to make rainbow slime.

It is not going well, there’s slime everywhere, and it’s almost time to take yet another biology class from Dr. Von Borenstein. 

We should’ve spent our time-off cultivating a new, much more stimulating creative skill with a community of inspiring creative friends. But we didn’t find out about Skillshare until today!

Now we hate this slime even more! And Dr. Von Borenstein has already given us homework!

Skillshare is an online learning community with thousands of classes about things that you just won’t learn in a normal classroom. You can explore new things, further passions you already have, and simply get lost in creativity.

So even if you’re headed back to the (virtual or IRL) classroom, why not also learn a more creative skill all from the comfort of your slime-free home with a Skillshare subscription that's only $10 per month?

Start with two free months of Skillshare Premium today.

SPORTS

It's Derby Day

And even if it is a few months late, it still means lots of betting.

More than $165 million was wagered on last year’s Kentucky Derby, a record amount for the 146-year-old race and a 10% increase over 2018. With horse racing viewership up 300% since the beginning of the year and no one allowed at the track due to the pandemic, odds are we’re in for another record day of gambling. 

• One potential hiccup: Las Vegas sportsbooks have yet to agree to a deal with Churchill Downs, the racetrack that hosts the Derby, over the handling of pari-mutuel wagering. That means payouts for bets involving multiple horses (like trifectas and superfectas) may be capped for Vegas bettors. That could greatly reduce betting activity if a last-gasp deal isn’t reached before the race.
• Another, much smaller, hiccup: Maine barred anyone from betting on the Derby this year, the only state to do so. Sorry Mainers.

Bottom line: Here is this year’s field. The Brew Sports algorithm is all-in on a colt named Major Fed, but don’t get your hopes up—as a massive 50-1 underdog and contending with historically low interest rates, he probably won’t yield much.

DEMOGRAPHICS

Homeward Bound

52% of young adults in the U.S. lived with at least one of their parents in July, according to new research from Pew.

• That surpasses the previous record of 48% set in 1940. It could've been higher during the Great Depression in the 1930s, Pew says, but we don't have data from that period.

WHAT ELSE IS BREWING

• A report in The Atlantic that President Trump mocked fallen American soldiers defined the 2020 presidential race yesterday. Trump denied the allegations, while Biden said, if true, the comments are “a disgrace.” 
• The Pentagon said it’s sticking with Microsoft for a controversial $10 billion cloud computing contract. 
• Peloton will launch a cheaper treadmill that costs under $3,000 and a new high-end bike, Bloomberg reports.
• The Marvel’s Avengers videogame was released.

BREW'S BETS

Radiant skin—backed by 30 years of science. Remove dirt, impurities, and makeup without drying or stripping your skin with Augustinus Bader’s Cream Cleansing Gel. Powered by TFC8®, formulated with soothing botanicals. Scientifically cleanse and purify, while renewing your complexion today.*

Time to meet your meat maker. ButcherBox sources delicious, high-quality, ethical meat from the best farmers and fishermen and delivers it to your door—all for an average of less than $6/meal. Get 2lbs of 100% grass-fed beef in every box for the life of your subscription by signing up today.*

Weekend conversation starters: 

• A debate is raging in Brew Crew Slack: Hot vs. cold coffee. Only one can prevail.
• What should you make with what's left in your refrigerator? 
• Birds: beautiful creatures, flying rodents, or something else entirely?

Bonus bird content: Listen to 13 species that have started singing (if you can call it that) in NYC during the pandemic.

^{*This is sponsored advertising content}

SATURDAY HEADLINES

You know all about “Florida man” headlines, but sometimes “generic man” headlines are just as bizarre. Three of these stories describe a man doing something downright strange (but true), while one is totally made up. Can you spot the fake? 

1. "Man aims to see Tenet 120 times for Guinness record"
2. "Man facing charges for pulling $70k out of his children’s college fund to cover up risky Kodak trade"
3. "An Ohio man built a backyard squirrel bar with seven varieties of nuts on tap"
4. "Man tries to rob pawnshop with sword he just purchased, police say"

SATURDAY HEADLINES ANSWER

We made up the financially irresponsible gentleman in the Kodak headline.