☕️ High there

REI makes a major reversal... August 13, 2020 [View Online]( | [Sign Up]( [Daily Brew]( TOGETHER WITH [Divvy]( Good morning. This is your quarterly tutorial on making sure the Brew hits your inbox every day, because like family reunion potato salad, email can’t be totally trusted. Here are the steps to follow for a seamless direct-to-inbox experience. - Move us to your primary inbox if you use Gmail - Add us to your VIP list if you use Apple Mail - Add us to your favorites if you use Outlook - Or some combination of the above if you use anything else MARKETS NASDAQ 11,012.24 + 2.13% S&P 3,380.35 + 1.40% DJIA 27,976.69 + 1.05% GOLD 1,928.10 - 0.94% 10-YR 0.674% + 3.00 bps OIL 42.58 + 2.33% *As of market close - Economy: Fears of deflation [continued to deflate]( yesterday, following a report that U.S. consumer prices increased more than expected in July. But inflation seems to be under control, which means the Fed won’t take its foot off the gas pedal in its bid to prop up the economy. - Aid: Speaking of propping up the economy, House Speaker Nancy Pelosi said Democrats and Republicans are “[miles apart](” on a new coronavirus relief bill. TRANSPORTATION [Uber Could Say Later, Dude to California]( [Uber car in a garage] Francis Scialabba The past few days have been swervy for ride hailing food delivery giant Uber. And if things aren’t resolved soon, it [might deprive]( the people of California of a quick way to get from the beach to the taqueria after a couple AMFs. How we got here For years, Uber and Lyft have been sparring with their home state over how to classify their drivers. In 2019, the state passed AB5, a law that requires companies to treat gig economy workers core to their business as employees, not individual contractors. - Employee status makes workers eligible for benefits like minimum wage, overtime pay, and unemployment insurance. In June, California AG Xavier Becerra [requested]( a preliminary injunction to force Uber and Lyft to comply with AB5. Which brings us to this week On Monday, anticipating a Superior Court judge’s decision on the injunction, Uber CEO Dara Khosrowshahi penned a [NYT op-ed]( arguing that the government should find a “third way” to treat gig economy workers instead of the binary choice (independent contractor or employee) offered currently. - He suggested that gig economy companies should have to create separate funds for workers to use on benefits of their choosing. The ride-hailing giants maintain that classifying drivers as employees would reduce flexibility, limit availability, and jack up prices. But Monday night, the judge [approved]( Becerra’s injunction. “Drivers are central, not tangential, to Uber and Lyft’s entire ride-hailing business,” Judge Ethan Schulman wrote. - The companies have a 10-day window to appeal, and they say they will. Here’s the kicker: Khosrowshahi said on MSNBC yesterday that if the appeal fails, Uber would likely pause service in California until the November election. That’s when voters will weigh in on a ballot measure backed by Uber and Lyft that would exempt drivers for app-based transportation and delivery companies from AB5. Looking ahead...we’ll find out if Uber’s appeal is accepted by the middle of next week. + While we're here: Lyft, which does not have an Uber Eats food delivery equivalent, said revenue dipped 61% in Q2. �  �  �  mailto:?subject=Check%20out%20this%20story%20from%20Morning%20Brew!&body=Uber%20CEO%20Threatens%20to%20Pause%20Service%20in%20California%20If%20Worker%20Disputes%20Aren%E2%80%99t%20Resolved:%200A%0AWant%20more%20great%20content%3F%20Subscribe%20to%20Daily%20Brew%E2%80%94Delivering%20the%20latest%20business%20news%20from%20Wall%20St.%20to%20Silicon%20Valley,%20daily.%20 MARKETS [Oh Hi There All-Time Highs]( [Bears waving] Giphy After a months-long climb that would make even Alex Honnold proud, the S&P 500 finally completed its epic turnaround yesterday, [briefly reaching]( its all-time closing high before finishing 0.4% below its February 19 record. - If investors are looking for a place to address their thank you cards, look no further than the usual suspects—Apple, Amazon, and Microsoft accounted for [over a third]( of the index’s big rise yesterday. Reality check: Because the pandemic gutted smaller companies more than larger ones, the Russell 2000, which tracks small-cap companies, is still catching up to its more muscular cousin. This earnings season Russell companies lost $1.1 billion on aggregate (compared to nearly $18 billion in profits last year). S&P earnings have [only declined 34%](, according to data from FactSet cited by the FT. Zoom out: Previous 20%+ drops in the S&P took an average of 4 years to claw back from. But thanks to the Fed’s actions to keep markets humming, stimulus from Capitol Hill, and Big Tech’s breakneck growth, the S&P went from peak to 34% collapse in March back to the top in [just 175 days](. �  �  �  mailto:?subject=Check%20out%20this%20story%20from%20Morning%20Brew!&body=S&P%20Briefly%20Tops%20All-Time%20High%20in%20Epic%20Rebound:%200A%0AWant%20more%20great%20content%3F%20Subscribe%20to%20Daily%20Brew%E2%80%94Delivering%20the%20latest%20business%20news%20from%20Wall%20St.%20to%20Silicon%20Valley,%20daily.%20 REAL ESTATE [A Merrells Paradise Never Gets Off the Ground]( [REI HQ] NBBJ You know when you put the final brick on a Lego build and then your baby cousin comes in and Hulk smashes it to pieces? That’s what the pandemic did to REI’s HQ. Yesterday, the outdoor retail cooperative [announced plans]( to sell the lavish corporate campus it had just finished building near Seattle. Execs said employees were able to collaborate remotely better the company initially expected...so a massive physical HQ just wasn’t worth the cost. The backstory: In 2016, REI [set out]( to create the corporate version of Pandora from Avatar, installing outdoor stairs and bridges, firepits, and rooftop terraces on an eight-acre campus. The goal was to move most corporate workers in by July. But then the coronavirus arrived, REI employees began filling up their Hydro Flasks from home, and the company projected a 30% decline in 2020 revenue. “The dramatic events of 2020 have challenged us to reexamine and rethink every aspect of our business and many of the assumptions of the past,” CEO Eric Artz told employees. Bottom line: Companies are quickly going from HQ2 to HQ0. �  �  �  mailto:?subject=Check%20out%20this%20story%20from%20Morning%20Brew!&body=REI%20Makes%20Plans%20to%20Sell%20Corporate%20Campus%20It%20Just%20Built:%200A%0AWant%20more%20great%20content%3F%20Subscribe%20to%20Daily%20Brew%E2%80%94Delivering%20the%20latest%20business%20news%20from%20Wall%20St.%20to%20Silicon%20Valley,%20daily.%20 SPONSORED BY DIVVY [Company Card Confidence, Capeesh?](#) [Divvy]( Ever cruise up to the coffee shop counter, clasping the [company card](, and communicate in a casual cadence, “a couple cappuccinos, compadre?” If you haven’t, trust us: Nothing quite compares to such company card confidence. And no one does company cards quite like [Divvy](. They’re the world’s most advanced [corporate credit card]( and bill pay system. They’ll pay your vendors in advance and offer flexible credit lines of up to $400k—or about 100,000 cappuccinos. Speaking of casheesh, Divvy’s financial software [is free](. But what you get is worth a lot—you’ll be able to create budgets, detect and prevent fraud, and see every transaction in one place. Say sayonara to the tedious and time-consuming tasks that come with constantly reimbursing employees. [Learn more today](. TECH [Microsoft Releases Two Phones]( [Microsoft's new phone] Microsoft Well kinda. In a return to the mobile device business after more than four years away, Microsoft began taking orders for its new [Surface Duo]( yesterday. The specs As the name implies, the Surface Duo has two screens connected via a [360-degree hinge]( enabling both horizontal and vertical usage. The device runs on Google’s Android operating system and allows users to open two different apps on each screen. - For example: You can read the Brew on one, while bumping our [Spotify playlist]( on the other. “It’s thin, it’s sleek, it’s probably one of the sexiest devices we’ve built,” Microsoft’s chief product officer Panos Panay said yesterday with no regard to Clippy’s feelings. And Microsoft wants users to pay for that sexiness—the Surface Duo clocks in at a [bold $1,399](, even as competitors Apple and Google roll out feature-packed budget phones in the $400 range. Zoom out: We’ll be watching how Microsoft’s premium release performs in a less-than-favorable economic environment. �  �  �  mailto:?subject=Check%20out%20this%20story%20from%20Morning%20Brew!&body=Microsoft%20Returns%20to%20Mobile%20Devices%20With%20It%E2%80%99s%20New%20Dual-Screen%20Surface%20Duo:%200A%0AWant%20more%20great%20content%3F%20Subscribe%20to%20Daily%20Brew%E2%80%94Delivering%20the%20latest%20business%20news%20from%20Wall%20St.%20to%20Silicon%20Valley,%20daily.%20 MEDIA [Sumner Redstone Dies at 97]( Mogul, tycoon, titan...Sumner Redstone was a media one. Redstone [died]( Tuesday night at his home in Los Angeles. Redstone shaped the last century of media. He turned his father’s chain of New England drive-in theaters into the globe-spanning ViacomCBS empire, which includes Showtime, MTV, BET, Comedy Central, the studio Paramount, and Simon & Schuster publishing. - He’s known for seeing the promise in MTV in the 1980s and taking it global. - Redstone acquired Viacom in 1987 in a knock-down, drag-out hostile takeover, then wrestled Barry Diller for Paramount in 1994 and pinned him. He is not known for politeness. His brass-knuckle business dealings often involved lawsuits, aggressive tactics, and one...[dental incident](. Bottom line: The NYT’s Edmund Lee [writes]( of Redstone’s sharp differences from the cucumber-chill media execs of 2020: “He wasn’t so much an innovator as he was a maximum opportunist. He didn’t invent new forms of entertainment; he used cagey maneuvers to build an empire.” Looking ahead...Sumner's daughter Shari now [stands alone]( at the top of an empire in flux. �  �  �  mailto:?subject=Check%20out%20this%20story%20from%20Morning%20Brew!&body=Media%20Titan%20Sumner%20Redstone%20Dies%20at%2097:%200A%0AWant%20more%20great%20content%3F%20Subscribe%20to%20Daily%20Brew%E2%80%94Delivering%20the%20latest%20business%20news%20from%20Wall%20St.%20to%20Silicon%20Valley,%20daily.%20 COMMUNITY [Caption Contest: The Winners]( [A chamber orchestra] Evan Lian Top prize: "This concert could have been an email"—Laia Valdespino from Peru Second place: "Sorry to interrupt, but does anyone want a MacBook Pro?"—Jack in Madison, CT Third place: "My keyboard doesn’t have a C# key..."—Rick from Edmonds, WA Dishonorable mention: "More barn!"—whoever wrote this...what? This was fun. Let's do it again sometime! If you are a cartoonist interested in providing submissions for our Caption Contest, please fill out [this form]( and we'll get back to you with details. �  �  �  mailto:?subject=Check%20out%20this%20story%20from%20Morning%20Brew!&body=Winners%20of%20the%20Brew's%20First%20Ever%20Caption%20Contest:%200A%0AWant%20more%20great%20content%3F%20Subscribe%20to%20Daily%20Brew%E2%80%94Delivering%20the%20latest%20business%20news%20from%20Wall%20St.%20to%20Silicon%20Valley,%20daily.%20 WHAT ELSE IS BREWING - [Airbnb]( revenue fell 67% last quarter, per documents seen by Bloomberg. Its adjusted loss came to $400 million. - [Tencent](, the Chinese internet giant, reported strong earnings during the pandemic, and said a potential U.S. ban on its WeChat messaging service wouldn’t significantly hurt revenue. - [New Jersey]( is allowing in-person schooling this fall. - [Instagram Reels](, Facebook’s answer to TikTok, gets a bad review from the NYT. - [Churchill Downs]( will allow 23,000 spectators max (about 14% capacity) at the Kentucky Derby on Sept. 5. [The Masters](, kicking off Nov. 12, will be held without fans. SPONSORED BY CARIUMA [Cariuma]( We can’t wait to PantOWN these PANTONE sneaks. The Brew’s favorite eco-friendly shoe stylists at [CARIUMA]( are teaming up again with the masters of color at PANTONE for a collection inspired by Autumn. Each color (white, red, blue, black, grey) was chosen to be totally versatile, and since these are still [CARIUMAs](, they’re super comfortable, 100% vegan, and made with organic cotton canvas. The last PANTONE/CARIUMA collab sold out instantly, but if you act quick you can get free shipping plus [15% off your own pair of CARIUMA sneakers](. BREW'S BETS It’s here: Nate Silver’s [2020 election forecast]( has arrived on internet browsers across America, and it’ll help you interpret the many presidential polls soon to be unleashed. Biden’s forecasted to win as of now, but it’s still early. Columns: They're not just for the Ancient Greeks. Business Casual host Kinsey Grant has a new one, and she's dishing her hottest takes on the upcoming topics on her podcast. Get in on the ground floor and [sign up here](. Is no code the best code? Here are [100+ resources]( to begin your no code journey. FROM THE CREW [Brew's Bookshelf](#) [books] Francis Scialabba Every other week on Thursdays, we share a few of our favorite reads. Business books aren't always snoozefests. These wild stories of corporate scandals will have you flipping pages like you're devouring a Stephen King thriller. - [Billion Dollar Whale]( by Tom Wright and Bradley Hope tackles one of the most high-profile white collar crimes in history, Malaysia’s 1MDB scandal. - [Black Edge]( by Sheelah Kolhatkar dives into Wall Street’s shadowy world of insider trading and the billionaire hedge fund manager who inspired Showtime’s Billions. - [Bad Blood]( by John Carreyrou exposes the lies and secrets of Theranos, one of Silicon Valley’s hottest startups in the early 2010s. - [The Smartest Guys in the Room]( by Bethany McLean and Peter Elkind tells the unbelievable story of Enron’s high-profile crash and burn in the early 2000s. Browse our earlier Bookshelf recommendations [here](. LEFTY QUIZ Today is International Left Handers Day, so this puzzle is dedicated to our can opener-hating readers: Using just your left hand, what are the two longest words in the English language you can type on a keyboard (with no unreasonable stretching)? SHARE THE BREW Chances are you have a friend who'd enjoy the Brew as much as you do. When you [share your referral link]( and new readers sign up, you earn rewards like our classic coffee mug. [Click here to get free swag.]( Hit the button below to learn more and access your rewards hub. [Click to Share]( Or copy & paste your referral link to others: [morningbrew.com/daily/r/?kid=4904f90a]( LEFTY QUIZ ANSWER "Stewardesses" and "reverberated" are two. [Source](             Written by [Toby Howell](, [Neal Freyman](, and [Eliza Carter]( Was this email forwarded to you? Sign up [here](. 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