Booze was already sad. Then tariffs happened
Hey Snackers,
We're channeling that Friends intro song.
Fresh after its biggest day since January, the Dow jumped another 207 points for a 2nd-straight win. Investors are still enjoying the Fed's smooth hints it'll support the economy through a trade war.
"I'll be there for you."
Someone got Smirnoff Ice'd... and it's Brown-Forman. Sales for the liquor legend behind Jack Daniel's only rose 1% last quarter, but would've jumped 5%. It's blaming European tariffs on its booze:
Jack can't afford another round... Yesterday, we learned the price tag of these tariffs in dollars for Brown-Forman:
Tequila was the savior — Now it's not... Tequila's only 3% of Brown-Forman's sales so far, but the Herradura and el Jimador brands are growing fast (sales were up 13% last quarter). But Agave prices have surged by 7X as supplies are (barely) keeping up with tequila demand. And just as Brown-Forman's leaning on its south-of-the-border spirits, new tariffs on Mexico are scheduled to arrive this weekend.
If anyone believes these two should not be wed... please speak now. Fiat Chrysler spoke. About itself. The car-glomerate left Europe's Renault on the altar, withdrawing the $40B merger offer it had announced just two weeks ago. Here's the strange family background behind the deal:
Straight up family drama... All those underlying relationships created tension — And within just a few days, a series of events broke up the wedding while the prenup was still getting signed:
This reflects Europe's national divides... With dozens of brands, Europe's carmakers are constantly competing with each other. Alliances or mergers could save money and boost efficiency so that everybody wins — Fiat Chrysler thought committing to Renault would be "transformational" to take on Germany's Volkswagen. But now it's back to national rivalries.
Extra green vibes... Last year Canadian cannabis icon Cronos was the first "pure play" pot stock to list on an American exchange. On Wednesday, its shares enjoyed a mellow 11% lifting sensation.
Cronos is hungry for USA... Currently, 99.6% of its sales are in Canada, where recreational Cannabis was legalized last fall. The US is still working on that, but CBD (cannabidiol, which delivers weed's "chill" effect without the "whoa") looks like it's on the faster track to legalization. The TSA is letting some passengers fly with it, and the FDA is holding hearings on its medical benefits.
Altria + Cronos = Big Corporate + Weed Dealer... The analyst highlighted Cronos' 45% owner: American tobacco giant Altria. Altria's access to 230K US stores (Altria already sells cigarettes in them) is key for Cronos to get to US customers before the competition. PS: Cronos' weed brands are compelling — look at this slide deck, page #8:
Correction: Yesterday we mentioned Spotify's "Stories" app was its 2nd app — It was actually its 4th. "Spotify for Artists" and "Soundtrap" (also for artists) exist as well as the original app.
Disclosure: Authors of this Snacks own shares of Beyond Meat and Amazon.