Wednesday,
November 11, 2020

Market recap

Dow Jones

29420.92

262.95 (0.90%)

S&P 500

3545.53

-4.97 (-0.14%)

Nasdaq

11553.86

-159.93 (-1.37%)

Amazon

$3,035.02

-$108.72 (-3.46%)

Ford

$8.37

$0.17 (2.07%)

Apple

$116.34

-$0.32 (-0.27%)

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Antitrust Commissions Around the World Scrutinize Big Tech

Accusations Against Amazon in the EU

Amazon (AMZN) is up against new legal challenges in the EU. The European Commission has accused the US ecommerce giant of collecting data from its third-party sellers and using that information to compete against them with Amazon products. In a separate investigation, the bloc is examining the way Amazon chooses which seller is the default option when a consumer searches for a product. The company has been accused of giving unfair advantages to its products and those of other companies that pay extra for special treatment.

It is expected that the European Commission will reach a decision about whether or not Amazon’s practices violate antitrust laws by next year. If the company is found guilty, it could be forced to alter its business practices. It could also be fined up to $28 billion. Amazon would have the opportunity to challenge the EU court’s decision.

Antitrust Investigations of Google in India

In India, Google (GOOGL) is up against antitrust scrutiny. India’s antitrust watchdog, Competition Commission of India, is investigating whether or not Google illegally promotes its payments service, Google Pay through its app store. Google Pay is one of the most widespread payment services in India, offering credit cards, mobile wallets, internet banking, and more.

The commission is looking at how Google Pay is featured on Google’s app store. It is also examining how the store's billing system is designed, and whether or not it gives Google Pay unfair advantages. An informant also accused Google of skewing search results in its app stores to promote Google Pay, though the commission is not currently investigating this accusation.

Uber and Postmates Receive DOJ Approval for Merger

Though Amazon, Google, and other tech companies are in hot water abroad, and have faced significant scrutiny at home, it hasn’t been all bad news for Big Tech on the antitrust front. Earlier this week, the US Justice Department signed off on Uber’s (UBER) acquisition of the food delivery startup, Postmates.

After reviewing the $2.65 billion all-stock deal, the DOJ decided that it does not violate antitrust regulations, and that Uber has put a number of measures in place to ensure fair competition. In several markets including Los Angeles and Miami, it has removed provisions requiring restaurants to exclusively use Postmates for delivery. Uber and Postmates will now be able to move forward with their partnership, which will help Uber get through a period of weak demand for its core ride hailing business, but increased demand for food delivery.

Find Out How Much it Would Cost to Update Your Home

Do you know what to expect out of your home renovation or remodel? Our home improvement cost calculator can help give you an idea of how much your project will cost so you can better plan your budget. Simply select your type of project and enter in some specifics to get started.


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Checking in on EV Makers

Ford’s $11.5 Billion Plan to Invest in EVs

Ford (F) is scheduled to unveil an all-electric version of its Transit van tomorrow. The automaker is investing $100 million to produce the new Transit van at a plant in Missouri. This will create 150 new jobs at the plant.

The initiative is part of Ford’s plan to spend over $11.5 billion on electric vehicles through 2022. Ford is devoting $3.2 billion to building new all-electric vehicles like the Transit van, which will be available for purchase in late 2021, as well as an all-electric F-150 pickup which will debut in mid-2022. Next month, it is expected that Ford’s long-awaited Mustang Mach-E, a new electric crossover vehicle, will go on sale. The new model will compete with Tesla’s Model Y.

GM Hires 3,000 Workers to Grow EV Operations

Not to be outdone, General Motors (GM) is in the process of hiring 3,000 engineers and software developers in order to stay relevant in a changing automobile market. As consumers become more excited about EVs and vehicles that depend on computers, legacy carmakers are hiring more tech workers to stay competitive with companies like Tesla (TSLA) and smaller startups.

For decades, GM’s product development operations have been centered around the company’s headquarters in Detroit. Now, GM is incorporating more remote workers into its structure than ever before in order to bring in talent from outside of Detroit. GM says its hiring spree has already started and will continue through the first quarter of 2021.

Nikola’s Legal Battles

Legacy automakers are keeping a close watch on new companies specializing in electric vehicles. Recently, established auto companies, especially those specializing in trucks, saw Nikola (NKLA) as a threat. However, the EV truck maker which was once a Wall Street darling has been faced with allegations of fraud.

In September, the Department of Justice issued grand jury subpoenas to Nikola, as well as to Trevor Milton, the company’s founder. The New York County District Attorney’s Office also gave Nikola a grand jury subpoena. The electric truck maker shared that these subpoenas had been issued in a regulatory filing on Monday. Nikola has been accused of making false claims about its technology so it could grow and form partnerships with large auto companies like GM. Nikola has denied these allegations. Regardless of how the cases turn out, Nikola’s reputation has taken a hit.

Companies old and new, large and small are jockeying for position in a growing and changing EV market. Investors will be eager to see which companies come out ahead.

Win $25k Toward Your Home Reno Project

SoFi is giving away $25,000 to help one lucky member pay for their home reno. Tell us about your SoFi-funded dream renovation project for a chance to win.


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Apple Unveils New Computers With In-House Made Chips

Advantages of the New Chips for Apple

Yesterday, Apple (AAPL) unveiled two new computers, a MacBook Air and a Mac Mini desktop, which are powered with chips made by Apple instead of an outside provider. Apple designs its own chips for iPhones and iPads, but this is the first time it has developed in-house chips for computers.

This transition will give Apple a number of long-term advantages. It will save money for the company and will give it more design flexibility. For example, apps originally developed for iPhones will be able to run on Macs with the new chips.

The Potential for Stumbling Blocks

Despite these benefits, the transition is a huge undertaking and there could be some hiccups. Mac computers have used Intel (INTC) chips since 2005. Apple says the entire transition away from these chips will likely take about two years. However, the company has promised to support Macs with Intel chips after the tradition is complete.

Though Apple is gaining attention for its new in-house chips, it hopes that for Mac users, the transition from a computer powered by an Intel chip to a computer powered by an Apple chip will be seamless. Ideally, consumers will hardly even notice a change. People want to be able to place full trust in their laptops, and if Apple’s new products show signs of having flaws, it could still risk losing business despite its loyal customer base.

Apple Has Done This Before

This is not Apple’s first time taking on a challenging transition between different types of chips. In the mid-1990s, the company exchanged Motorola (MSI) chips that were in the first Macs for PowerPC chips, built through a collaboration between IBM (IBM) and Motorola.

Then, in the early 2000s, Apple switched from the original Mac OS to the Unix-based OS X operating system. In 2005, Apple transitioned from PowerPC to Intel chips. While this latest transition will be significant, Apple has had plenty of practice with successfully implementing similar changes.

Not-So-Breaking News

  • Spotify (SPOT) is buying Megaphone, a podcast hosting company, for $235 million. Through this deal, Spotify will integrate its ad insertion technology into all podcasts currently on Megaphone. The platform hosts more than 5,500 shows from publishers including Vox Media and Disney (DIS).
  • Ulta Beauty (ULTA) has entered a deal to launch makeup and skincare shops inside hundreds of Target (TGT) locations across the country. Customers will be able to shop for Ulta products in-person, or buy them through Target’s delivery and curbside pickup services. Shares of Target and Ulta climbed 2% and 6% on the news.
  • Peloton (PTON) has signed a multiyear contract with Beyoncé to create exclusive content which will be integrated into Peloton’s online fitness classes. Peloton’s shares climbed 3% on the news. So far this year the company’s shares have risen over 270%.
  • Boeing (BA) shares rose yesterday on news that the Federal Aviation Administration could clear the company’s 737 MAX planes as soon as next week. The aircraft have been grounded since March 2019 after two fatal crashes.
  • Shares of Eli Lilly (LLY) were up 3% yesterday after the FDA approved bamlanivimab, the company’s coronavirus treatment drug, for emergency use.
  • A kitchen remodel isn’t always a simple undertaking, and budgeting for it shouldn’t be either. Consider these steps and find out how much it costs to remodel a kitchen before starting on the kitchen of your dreams.

Financial Planner Tip of the Day

"Even with detailed quotes, it can help to budget for additional, unexpected costs during a home renovation project. Consider setting aside 10% to 15% on top of the quote to prepare for any unforeseen expenses."

Brian Walsh, CFP® at SoFi

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