Stocks strongly rebounded after two days of declines despite growing geopolitical tensions over North Korea and a crucial election in France this Sunday.

The Dow jumped 174 points, with 25 of its 30 components advancing; the S&P 500 Index gained 17; and the Nasdaq climbed 53. Advancers led decliners by five to two on the NYSE and nearly eight to three on the Nasdaq. The prices of Treasuries weakened. Gold futures gained 40 cents to close at $1,283.80 an ounce, and the price of crude oil slipped 14 cents to settle at $50.71 a barrel.

In earnings news:

  • Verizon Communication Inc.’s shares (VZ) dropped 1.10% after the telecommunications giant reported its first-ever decline in postpaid wireless subscribers in the first quarter. The company had a net loss of 307,000 postpaid wireless subscribers, while both earnings ($3.45 billion, or 84 cents a share) and overall revenue ($29.8 billion) missed expectations and declined from the year-ago quarter. Faced with competition from T-Mobile and Sprint, Verizon relaunched unlimited data plans, which reduced revenue.

In other business news:

  • Initial claims for unemployment rose 10,000 last week to 244,000, according to the Labor Department. The four-week moving average, meanwhile, dropped 4,250 to 243,000. The number of continuing claims for unemployment declined 49,000 to 1.98 million, the lowest level since 2000.
  • The Philadelphia Fed Manufacturing Index continued to pull back from its February surge, but it remained at an elevated level in April. In February, the index hit a 33-year high of 43.3, then dropped to 32.8 in March, and now down to 22 in April. Any reading above zero is considered expansionary, and the current reading is still elevated. Employment components strengthened for the month, but new orders weakened.
  • The oil-production cut among Organization of the Petroleum Exporting Countries (OPEC) should be extended later into 2017, according to Saudi Arabia’s energy minister Khalid al-Falih. Last year, OPEC agreed to cut 1.2 million barrels of oil a day to support prices; the group meets again on May 25 to consider extending the cuts.

*****

In a story redolent of late dot-com era excess, the talk of the town in Silicon Valley this week has been a Bloomberg report about Juicero, a start-up juicing company. Juicero raised $120 million from investors to develop a high-tech juicer. The attraction was primarily due to high-tech gadgetry combined with a Keurig-like subscription model. The customer buys a $400 juicer, which squeezes Juicero-made packets of fruit and vegetables into a cup. The packets are designed to work only with Juicero’s juicer, just like how Keurig’s coffee pods were originally designed to work only with a Keurig machine. So the business model made perfect sense: Sell the customer a machine, and then get a stream of revenue from the customer in perpetuity or until they get sick of juice, whichever comes first. As an added benefit, the machine is WiFi connected, leading to the exciting possibility of hackers gaining control over it and going on a juicing spree.

Bloomberg’s reporters, however, did what any curious reporters would do: They got a hold of the juice packets and discovered they could squeeze the packets all by themselves without using the company’s $400 machine, and in many cases faster than the machine. Bloomberg found two Juicero backers who were shocked that the $400 machine wasn’t needed. The reporters should have demonstrated the process using an old fashioned waffle iron. That would have been even better at destroying whatever mystique the juicer was going for, particularly if the waffle iron lacked even the most rudimentary WiFi connectivity.

The real shock, though, should have been over the juice packets, which cost $5 to $8 each. A daily juice drink would cost over $2,000 for a year, which puts that $400 machine into perspective and perhaps means it could be given away for free as a loss-leader. I look forward to the next investigative report breaking the news that it turns out fruits and vegetables are available in non-packet form.

If Silicon Valley really wants to cash in on healthy eating, it should crowdsource an app-based social network that allows users (formerly known as “people who eat fruits and vegetables”) to geo-tag themselves in supermarket produce aisles and take augmented reality photos that superimpose a smoothie over a person holding a bunch of kale. The app would make money through advertising, mostly from fast food restaurants, which know how to target hungry people.

0
0

You might also like: