Boeing, Boeing, Gone

MARKETS

• U.S. markets: The economy added 103,000 jobs in March, but rising threats of a trade war sent markets falling.
• Inflation: Chicago Fed President Charles Evans sees inflation hitting the target 2% by the Fed's June meeting.

ECONOMY

Boeing Facing Possible Delays with Trade War

The runways looked clear for takeoff Friday after Boeing sealed a $12 billion deal with American Airlines-the world's largest airline purchased 47 787 Dreamliners.

But as Boeing celebrates the win over its rival Airbus (which was also being considered in the deal), it should also brace for turbulence.

If you thumbed through Robinhood on Friday, you probably saw a bloodbath. Namely, because President Trump threatened $100 billion more in tariffs, while China responded, 'we've got tariffs, too.'

那么为什么这不利于薄熙来eing?

Because China-one of Boeing's largest markets-already stamped a 25% tariff on imported aircraft.

Breaking it down: Last year, China accounted for 25% of all Boeing deliveries and 20% of its new orders. And in the next two decades, Boeing forecasts $1.1 trillion worth of demand from the country.

But if Trump and Xi continue to bump heads instead of fists, Boeing would be hit by tariffs and see fewer orders.

That's bad biz for Boeing...

But also for the markets. Of the 30 components driving the Dow, not Apple, not Microsoft, but Boeing is the one steering the ship. That's because the Dow is a price-weighted index, meaning the companies with the highest stock prices (like Boeing) push the Dow one way or the other.

And China knows this. If it can pull the rug out from the Dow's poster child, it could derail the markets' historic run.

Now this boiling trade war feels a lot more like a Wild West standoff

The U.S. wants: A lower trade deficit and better access to the Chinese market.

China wants: The U.S. out of its hair, while continuing its march towards economic and technological domination.

And right now, neither side seems willing to back down-regardless of which companies are trampled in the process.

CRYPTO

What's New with Crypto?

Digital currencies got a boost of confidence Friday as George Soros-the investor known for "breaking the Bank of England" in 1992-might be dabbling in crypto.

His family office is considering trading digital assets. And that's despite Soros' warnings of a crypto bubble at the World Economic Forum.

So why the change of heart? Maybe he sees opportunity in an increasingly regulated and stabilized market. After all, Bitcoin's price has hung steady around $7,000-8,000 recently.

Then there's Coinbase, which is actively looking to be an SEC-regulated brokerage-a move that would set the bar for any aspiring crypto exchange.

Bottom line: Crypto's front-page frenzy might be over, but a lot's still going on behind the scenes. An endorsement from Soros and a (potentially) SEC-regulated Coinbase suggests this party's far from over.

M&A

Netflix Bids for Billboard Company

Under the watchful eyes of Dr. T.J. Eckleburg, Netflix reportedly put up a $300+ million bid for L.A.-based billboard company Regency Outdoor Advertising (Reuters).

What it means: 1) Even in a digitized 2018, traditional billboards are still prized real estate and 2) L.A. remains ground zero for the entertainment industry (SoCal is also the #1 billboard market in the world, if you believe Regency Outdoor).

Since Netflix is already a major billboard advertiser in L.A., its attempt to acquire Regency Outdoor could be a long-term cost saving move. And the billboards are in strategic locations: LAX, the major freeways, Sunset Strip, and UCLA's campus.

Zoom out: Netflix plans to boost marketing spending to $2 billion in 2018. As CFO David Wells said, "We used to think every incremental dollar was best spent on content"...but actually "we think marketing is a multiplier on the content spend."

Number to know: A billboard spot on Sunset Strip could cost $140,000 a month.

MEDIA

The Denver Post Drops the Gloves with Its Owner

这个周末,丹佛Post spoke up for an institution on the brink of collapse: itself.

The 125-year-old newspaper blasted its owner, hedge fund Alden Global Capital, for gutting the once-proud paper (in March, the Post announced 30 layoffs, almost a third of its whole newsroom).

Hot off the press: "Alden has embarked on a cynical strategy of constantly reducing the amount and quality of its offerings, while steadily increasing its subscription rates." The paper also referred to Alden, which took control in 2010, as "vulture capitalists" only seeking to maximize profits.

因为诋毁你的所有者是大胆的…和风险,journalists across outlets rushed to support the paper. Here's a tweet from The Washington Post's executive editor Marty Baron. The blank profiles you see are the employees who have left the Denver Post since the picture was taken in May 2013.

Stay tuned to see if the Post's last-gasp strategy pays off.

WHAT ELSE IS BREWING

• Facebook will add an "unsend" feature after Zuck was caught unsending messages himself.
• The feds have seized website Backpage, which is under scrutiny for facilitating sex trafficking.
• Christian Sewing is set to become Deutsche Bank's new CEO.
• A Quiet Place's $50 million debut was this year's second-best behind Black Panther.

WATER COOLER

A CLOSER LOOK

Having trouble staying up-to-date on the latest developments in each industry? We got your back.

What's keeping commercial real estate professionals up these days? At least in the office sector, it's the rise of co-working/flexible space.

Providing a desk, outlet, Wi-Fi, and a steady coffee IV drip, co-working spaces are increasingly seen as attractive work environments-whether you're a freelancer, startup (like Morning Brew), or larger company.

Think about this: Co-working/flexible space accounted for 29% of all U.S. office space leased in the last two years. This isn't a niche phenomenon anymore: co-working is the primary growth driver in the office sector.

Unsurprisingly, WeWork-and its $20 billion valuation (thank you SoftBank)-is the dominant player. From August 2016 to July 2017, only one company leased more U.S. office space than WeWork.

As for the trends moving forward, real estate firm JLL says:

• Big corporations will boost demand for flexible office space
• M&Aactivity will ramp up as the larger players seek to go global
• Margins will be squeezed from more competition

So when your company decides to relocate to the local WeWork, don't say we didn't warn you.

THE BREAKROOM

PRODUCTIVITY TIP

Eliminate meetings-Mark Cuban says, "Never do meetings unless someone is writing a check." Sure, meetings do offer transparency and collaboration, but they tend to be a breeding ground for drawn-out talking points and small-talk. Keep meetings to a minimum and keep productivity at a maximum.

Have your own productivity tip? Feel free to reply and let us know (it might just be featured in the Brew).

WHAT'S BREWING THIS WEEK

Monday:British Prime Minister Theresa May talks Brexit, Russia, and trade in Scandinavia
Tuesday:Zuckerberg testifies in front of the Senate
Wednesday:Zuckerberg testifies in front of the House Energy and Commerce Committee; CPI report
Thursday:Delta and BlackRock kick off earnings season
Friday:Big banks report earnings (JPMorgan, Citigroup); Coachella begins

TRIVIA

As we wrote earlier in the newsletter, from August 2016 to July 2017, only one company leased more U.S. office
space than WeWork. What was the company?

(Answer located at bottom of newsletter)

Breakroom Answers

Trivia
Amazon