Stocks rose as investors considered this week’s news from the Fed that interest-rate hikes might be on the table if the economy continues improving.
The Dow ended up 65 points, with 21 of its 30 components gaining; the S&P 500 Index rose 12 points; and the Nasdaq added 57. Advancers topped decliners by about 11 to 3 on the NYSE and on the Nasdaq. The prices of Treasuries weakened. Gold futures slipped $1.90 to close at $1,252.90 an ounce. The price of crude oil fell 26 cents, settling at $48.41 a barrel.
For the week, the Dow lost 0.20%, the S&P 500 Index edged up 0.28%, and the Nasdaq rose 1.10%.
In earnings news:
- Campbell Soup Co.’s first-quarter net income rose 3.3% to $185 million from a year earlier on revenue of $1.87 billion, down 1.5%. Sales were hurt by weak soup sales, challenges with the V8 beverage line, and a weather-disrupted carrot supply. The company’s shares (CPB) declined by 6.38%.
- Deere & Co.’s shares (DE) dropped 5.48% after posting a 28% drop in first-quarter net income to $495.40 million from a year earlier. Revenue fell 4% to $7.11 billion. While both measures beat estimates, the agricultural equipment maker’s full-year outlook was downbeat. Deere pared its 2016 earnings forecast, citing low commodity prices and sluggish farm incomes.
- Foot Locker’s first-quarter net income rose to $1.39 a share from $1.29 a share a year earlier. Revenue edged up 3.6% to $1.99 billion. Earnings met estimates, but sales did not, as the athletic apparel retailer’s same-store sales growth of 2.9% fell short of forecasts. The company’s shares (FL) decreased by 6.46%.
In other business news:
- Existing-home sales rose 1.7% in April to a seasonally adjusted annual rate of 5.45 million, the National Association of Realtors reported. Year over year, sales rose 6%. The median sale price for an existing home rose 6.3% to $232,500 from a year earlier, marking the 50th consecutive month of year-over-year increases.
Pop quiz because it’s Friday. What industry has attracted $495 million in seed money on the crowdfunding platform Kickstarter since the site was launched in 2009? Was it …
- Technology innovations?
- Film, video, and music projects?
- Arts and crafts consumer goods?
The answer, my friends, is none of the above! According to Quartz, the category of “games” is the most popular thing to fund on Kickstarter, and most of the funded products in this category are not of the video or mobile ilk. Rather, people with a dollar and a dream to support someone else’s dream are funding old-fashioned board games.
Like that one relative whom you can’t seem to topple as Monopoly champion, the board game market has posted seven consecutive years of growth to become a billion-dollar industry, according to research firm ICv2. Why are tabletop games so successful? According to ICv2 head Milton Griepp, it’s because their electronic counterparts—computer, video, and mobile games—are too similar to what people stare at all day at work. We live and breathe digital screens, and most of the time, it’s not for fun.
In an interview with Quartz, Griepp says the board game booms on Kickstarter and in the consumer marketplace are inextricably linked. His estimates show the amount of money pledged on Kickstarter in 2015 for board game businesses represents almost 20% of the industry’s North American retail sales. Meanwhile, for industries like technology, total funding raised on Kickstarter represents a miniscule amount of the market’s total size. This disparity could be due to two factors …
One, board games have clearly defined components and costs, unlike tech startups, which, as Quartz notes, have complex supply chains—as well as a high likelihood of failing due to factors such as nonviable business models, technical issues, and no clear marketplace need.
Two (and Quartz didn’t point this out, but it must be a factor), the size of the tech industry and the board game industry, by market size, must have a massive chasm between them.
- Board game industry: $1 billion, according to ICv2.
- Tech industry: Well, let’s just say it represents more than that. For example, in Silicon Valley, there’s been a steady progression of “unicorns” or generously funded tech startups whose market cap would surpass $1 billion apiece if they were to go public. Fortune says there are 174 unicorns in existence right now, with the top 5 VC-backed unicorns alone having about $170 billion between them.
So if you’re funding a board game on Kickstarter, your stake in the overall gaming industry will clearly be bigger in proportion than the stake of someone who pledges, say, $1,000 for a tech gadget in the humungous tech sector.
That said, there are benefits to being a big fish in a smaller pond.
Just think of it: You’re at a cocktail party in Silicon Valley. Powerful venture capital investors surround you, caviar cocktail and bacon-wrapped champagne glasses in hand. Someone wearing a monocle and riding a diamond-encrusted Segway scooter rolls up to you and says, “I’m the 10th biggest investor in the tech industry on Kickstarter! Who, may I ask, are you?” To that you reply, “Well, I’m the number one investor in the board game market! Perhaps you’ve read about my flourishing industry in the Daily Advantage.”
Chances are he hasn’t. But that’s OK—you’ll still be the number one VC investor in your own world. So go ahead and get yourself a bacon-wrapped champagne glass and mingle. You’ve earned it.