☕️ Amazon’s luxury era

Why it was a bad week to bet against Tesla... July 06, 2024 [View Online]( | [Sign Up]( | [Shop]( [Morning Brew]( PRESENTED BY [Babbel]( Good morning. The TSA expects tomorrow to be the busiest travel day ever. We suggest you spend today stocking up on magazines, snacks at less-than-airport prices, and extra phone chargers so that you are poised to become the benevolent ruler of the terminal mob. —Abby Rubenstein, Sam Klebanov, Matty Merritt MARKETS Nasdaq 18,352.76 +0.90% S&P 5,567.19 +0.55% Dow 39,375.87 +0.17% 10-Year 4.272% -8.0 bps Bitcoin $56,468.95 -3.34% Apple $226.34 +2.16% Data is provided by *Stock data as of market close, cryptocurrency data as of 5:00pm ET. [Here's what these numbers mean.]( - Markets: The S&P 500 soared like a firework, finishing the holiday week with its 34th [record close]( of the year. The Nasdaq also ended the day at a record high as tech giants Apple, Microsoft, and Meta rose.  RETAIL [Amazon gets luxurious in department store tie-up]( [The facade of Saks Fifth Avenue's flagship NYC store]( Hawthorne/Getty Images Department stores, with their big brick-and-mortar footprints, generally aren’t considered bastions of cutting-edge technology, and their efforts at innovation, at least in the cultural imagination, seem to have stopped at hiring Don Draper to modernize their advertising. But Saks Fifth Avenue’s parent company’s agreement [to buy]( rival luxury destination Neiman Marcus includes a surprising player: Amazon. What’s the deal? - HBC, which owns Saks and its discount little sibling, Saks OFF 5th, confirmed this week that it’s acquiring Neiman Marcus (which also owns fellow high-end retailer Bergdorf Goodman) for $2.65 billion. - Once the deal closes, the four stores will be combined into a new company, Saks Global, though they’ll continue to operate locations under all four separate brand names. - Amazon will invest and take a minority stake in the new company. So will Salesforce. What role will Big Tech play in running luxury stores? Marc Metrick, who’s currently the head of Saks Fifth Avenue’s online operations and has been tapped to be CEO of the combined company, [told]( Bloomberg that the technology companies will “future-proof” the venerable upscale brands, helping them amass and analyze customer data and improve logistics. Department stores could use the help: Neiman Marcus filed for bankruptcy in 2020 and emerged with new owners. Competitors are riding the struggle bus, too. Lord & Taylor also went bankrupt during the pandemic and now operates online only. Macy’s is closing 150 stores. So, what’s in it for Amazon? The deal gives the everything store, which is America’s largest clothing retailer, a solid foothold in the [luxury world](. And high fashion tends to have high margins. Not so fast…the deal is likely to draw the attention of federal antitrust regulators. This time, it probably won’t be over concerns about the power of Big Tech but about luxury consolidation. The Federal Trade Commission recently sued to try to block another merger in the luxury space between Tapestry, which owns Coach and Kate Spade, and Capri Holdings, owner of Versace and Michael Kors.—AR PRESENTED BY BABBEL [Fire up your fluency]( [Babbel]( Fun fact incoming: There are over 350 languages spoken in the US. Yep, we’re a melting pot through and through, and the way we talk is as diverse (and American) as it gets. So why not start a new language journey to keep the 4th of July festivities rolling? Babbel’s on board with this. They can help you [ace a new language]( with their award-winning lessons, immersive podcasts, addictive games, and bonus content designed to transform you into a full-blown polyglot. Plus, during their 4th of July sale, you can [get 60% off all of Babbel’s powerful language tools]( btw, are praised by researchers at Yale and Michigan State University. [Make your language skills go boom](. WORLD [Tour de headlines](#) [Joe Biden speaks at a rally]Scott Olson/Getty Images Biden sat for a TV interview as big donors try to push him out. Hoping to reset his 2024 campaign after a stumbling debate performance against Donald Trump that reignited concerns about his age, President Joe Biden talked to ABC’s George Stephanopoulos in a [prime-time interview](. Biden dismissed the debate as a “bad night,” telling Stephanopoulos he had a cold and was “exhausted.” But he insisted, “I’m still in good shape.” The stakes were high as Biden, who says he’s staying in the race, was trying to win over not just voters and some members of his party but also major donors. Disney heir Abigail Disney [said]( she won’t fund the Democrats unless and until Biden drops out, and 168 business leaders, including Michael Novogratz and Walmart heir Christy Walton, have reportedly signed a letter urging him to step aside. There’s another big election looming. And it’s even got red, white, and blue flags: France will [vote]( tomorrow in the second round of the parliamentary election that will determine whether Marine Le Pen’s right-wing National Rally secures a majority to govern. Though the party dominated Round 1, polls show they’re unlikely to secure an outright majority after candidates from other parties started dropping out to avoid splitting votes. The situation is tense: Thirty thousand police officers will be deployed to prevent incidents after multiple candidates reported being [attacked]( on the campaign trail. 🪭 The job market is cooling, but only a little. Hiring and wage growth in the US [slowed]( last month, while the unemployment rate climbed above 4% (to 4.1%) for the first time since 2021. The Labor Department’s latest data drop showed the US added 206,000 jobs in June, a handful more than expected but still fewer than the month before, even after the tally for May was revised downward. For Fed watchers, that slightly bad news is good news, since it bolsters the case for an interest rate cut this fall. AUTO [Tesla short sellers need a recharge]( [Elon Musk celebrating]( Cordeiro/Getty Images It’s been a rough week for Tesla naysayers: Bears who claimed its stock is overvalued are now biting their tongues, and short sellers are licking their wounds after [losing billions](. The stock ended the week up 26%, making it Tesla’s longest stretch in the green since last summer. The eight-day streak canceled losses for the year and added over $200 billion to the EV-maker’s value. But the heat from the trading floor contrasts with [the cool temps]( at Tesla’s stores. - Tesla revealed this week that it delivered 443,956 cars in Q2, which was more than analysts predicted but almost 5% fewer deliveries than in the same period last year. - And it’s been making less money per car since EV competition from automakers like Ford and GM has forced Tesla to slash prices. Musk and Wall Street are bullish The CEO told short sellers that they’ll soon be “obliterated.” Musk has been assuring investors that Tesla’s slowing car business isn’t a problem since it’s [not really]( a car company. He’s been touting plans for a self-driving ride-hailing service and the humanoid robot, Optimus, which he claims could boost Tesla’s value to $30 trillion. For now, the company has earmarked $10 billion for AI research in 2024, and Musk has promised a robotaxi reveal in August. But…analysts say Tesla still needs to jumpstart its EV business to subsidize the R&D. The company plans to release lower-cost car models by early next year in hopes of spurring sales. —SK TOGETHER WITH FINANCEBUZZ [FinanceBuzz]( Balance transfer cards can help you pay off high-interest debt faster. The FinanceBuzz editors reviewed dozens of cards with 0% intro APR offers for balance transfers and found the perfect cards. Take a look at [this article]( to find out how you can pay no interest on balance transfers until nearly 2026 with [this top credit card](. STAT [Prime number](#) [The air freight terminal at Hong Kong's airport]Sam Tsang/South China Morning Post via Getty Images All those Shein and Temu hauls aren’t just taking up tons of space in your closet—they’re also crowding [freight airplanes]( departing from Asia. The CEO of DHL Global Forwarding told the Wall Street Journal that the rapid growth of the two Chinese ultra-cheap e-commerce sites over the past two years has them taking up more than 30% of cargo space on some routes. That’s a big change since it’s usually higher-end items like phones or perishable ones like fish that get shipped via air rather than sea. And shipping volumes out of Chinese manufacturing hubs have had a significant uptick—driving up prices even as Shein and Temu keep the cost low to you. Last month, cargo prices were up 40%, per the WSJ. It’s got freight companies pushing manufacturers and retailers to lock in space now before the holiday rush begins. NEWS [What else is brewing](#) - [Donald Trump’s lawyers]( plan to argue that the criminal case against him in Florida over classified documents found at Mar-a-Lago should be thrown out under the Supreme Court’s recent ruling on presidential immunity. - [OpenAI]( was hacked last year, raising fears about the safety of its data going forward. - [New York’s Metropolitan Museum of Art]( returned 14 looted sculptures to Cambodia as museums grapple with what to do about pieces taken from other countries during moments of political turmoil. - [The Vatican]( excommunicated its former ambassador to the US for refusing to recognize Pope Francis. - Even more election news: Iran’s [presidential election]( runoff had record-low turnout. Meanwhile, Tokyo will vote for its governor tomorrow, in an election that’s featured 56 candidates and lots of [hijinks](. RECS [Saturday To-Do List graphic] Treat yourself: How to make [ice cream]( without a machine. Go back in time: What the internet looked like [in 1994](. TIL: Why honey comes in [bear-shaped bottles](. Name it: Learn how to [identify wildflowers](. Free crypto: Make your first deposit on eToro and score [$10 in free crypto](. You’ll gain access to a diverse marketplace with stocks, options, crypto (of course), and more. [Claim your $10]( *A message from our sponsor. GAMES [The puzzle section](#) Brew crossword: If you know which boxer Mike Tyson called “the greatest of all time,” you’re well on your way to solving today’s crossword. [Check it out here](. Open House Welcome to Open House, the only newsletter section that is on the lookout for luxury garbage. We’ll give you a few facts about a listing and you try to guess the price. [Modern home in Chelan, WA]Zillow Today’s [home]( is in Chelan, Washington, three hours outside Seattle. And if you’re wondering why this monstrous modern mansion (along with a few other matching homes) has been plopped in the middle of a charming Pacific Northwest lake town, so are we. Amenities include: - 6 beds, 6 baths - Two private community pools and boat mooring options - Cement tub How much for the big cube? SHARE THE BREW [Share Morning Brew]( with your friends, acquire free Brew swag, and then acquire more friends as a result of your fresh Brew swag. We’re saying we’ll give you free stuff and more friends if you share a link. One link. Your referral count: 0 [Click to Share]( Or copy & paste your referral link to others: [morningbrew.com/daily/r/?kid=4904f90a]( ANSWER $2.8 million Word of the Day Today’s Word of the Day is: bastions, meaning “strongholds.” Thanks to Alyssa from Fort Lee, NJ, for fortifying us with the suggestion. Submit another [Word of the Day here](. Written by [Abigail Rubenstein]( Sam Klebanov, and [Matty Merritt]( Was this email forwarded to you? 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