It’s All About the Brexit; Gearing Up for Some Star Spangled Traveling; Chipotle Wants to Reward You

The British are leaving, the British are leaving…

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Image courtesy of Chris Sharp/FreeDigitalPhotos.net

The Brexit vote continues to cause trouble and it probably will be awhile before it stops. Janet Yellen has canceled her appearance at a bank conference in Portugal that was organized by the European Central Bank. The Fed chief was supposed to speak on a panel with the Bank of England’s Governor Mark Carney and ECB president Mario Draghi. Carney now has more pressing matters to attend to, as does Draghi, who is now heading to Brussels for a summit with EU leaders to brief them on the impact of the Brexit vote and hash out a response to the U.K. referendum. The S&P yanked its AAA credit rating on the UK since the index feels that “this outcome is a seminal event, and will lead to a less predictable, stable, and effective policy framework in the U.K.” Ouch. On Friday, the pound plunged to its biggest one day drop EVER, as Barclays Plc and the Royal Bank of Scotland Group Plc had their shares halted as a result of the plunge. Meanwhile, Treasury Secretary Jack Lew doesn’t get the feeling that there is a financial crisis brewing. Well, at least he said as much on CNBC recently. And if Jack Lew says it, then it’s good enough for me. I think. However, analysts aren’t as optimistic about the British economy and think the “Brexit” vote just might put the UK in a recession, besides dealing a major blow to European economic growth. Those analysts feel that the U.S. will also take a hit or two as well, but without any recession drama. And in case you were counting on a rate hike anytime soon, don’t. The Brexit vote put the kibosh on it and that’s not necessarily a good thing.

Brake for it…

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Image courtesy of Chris Sharp/FreeDigitalPhotos.net

According to AAA, 43 million Americans are expected to travel this holiday weekend, beginning Thursday, June 30 thru Monday July fourth. That number is 5 million more than the amount of travelers on Memorial Day weekend and 1.2% more than the amount of travelers from last year’s holiday weekend. 84% of those traveling – 36.3 million, if you please – will be doing it by car, and if the the thought of heavy traffic congestion makes your skin crawl, then you can thank low gas prices for the increased congestion. The national average price for a gallon of gas is coming in at just $2.31, its lowest price since 2005 and 17% and 47 cents lower than it was last year at this time. But at least the traveling and the money being spent on those trips is good for economic growth. Americans saved a whopping $20 billion on gas spending this year so what better way to make up for it than by getting out on the road and commuting at least 50 miles from their homes. On a darker note, because of the increased traffic, the National Safety Council is expecting 450 auto-related deaths and 53,600 car-related injuries. But at least airfares will be lower and maybe even a safer way to travel this holiday weekend.

Muy caliente…

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Image courtesy of Piyachok Thawornmat/FreeDigitalPhotos.net

Chipotle is biting the jalapeno-laced bullet and will now be offering up a rewards program. Yeah, that’s news. Before it’s food bore the makings of e. coli, salmonella and norovirus, Chipotle was a veritable rewards program snob, refusing to implement one. But I guess a slew of food-safety scandals and the fact that shares of the company have lost more than a third of their value since October gave the fast-food chain a fresh – no pun intended – perspective on its economics. Hence, we are now introduced to the Chiptopia Summer Rewards Program. It’s not clear if Wall Street feels this move is strategic as Chipotle does as the stock went down today almost 3%, closing at 388.78.The rewards program will begin July 1 and run until September. However, should the rewards program prove rewarding for Chipotle and actually help it reclaim any of the glory it lost last year as a result of its rash of food safety issues, then expect the rewards program to stay put. But diners beware as this loyalty program is not like other loyalty programs that require you to accrue points or spend a certain amount of money. Instead, Chiptopia rewards its customers by the amount of visits that they make in a given month. There are three levels customers can reach: mild, medium and hot. I will spare you the sordid and complicated details. However, in order to get those points customers will always need to purchase an entree with their order. Should they achieve the illustrious “hot,” status having visited Chipotle  eleven times – in one month -, then they get to enjoy three free burritos, which by the way, will count towards more rewards.

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Wild Things at the ECB Conference; Google Gets Antitrust Slapped by EU; Smith & Wesson’s Shares Shoot Up

Think you’re having a bad day?

Image courtesy of noppasinw/FreeDigitalPhotos.net

Image courtesy of noppasinw/FreeDigitalPhotos.net

Mario Draghi, President of the European Central Bank just might be having an even worse day than you, this April 15. And he didn’t even have to file his taxes. As Mr. Draghi was speaking at a conference in Frankfurt, Germany today when a female protester literally jumped onto the table from which he spoke and threw a stack of papers and confetti at him screaming, “End ECB dictatorship!” Now folks have been known to take intense issue with what they consider to be measures that are just a bit to harsh for fiscally challenged European countries, especially Greece and Spain, but if I didn’t know any better, I’d say Ashton Kutcher was somewhere in the room telling Mario Draghi he’d just been punk’d. But…Ashton wasn’t there. Alas, if only the rest of the conference had been as exciting. Instead the ECB President went on to discuss the less riveting topics surrounding the state of the European economy, how it’s allegedly improving and that the $1.2 trillion quantitative easing program is apparently working. In case you were wondering just what on earth is quantitative easing, or QE, as the cool kids call it, it’s a super special type of monetary policy used when the regular one doesn’t seem to be working properly (the details of which I will not delve so as to maintain my audience). As for the protester, Josephine Witt, who managed to pass through multiple security checks posing as a journalist, she gleefully tweeted: “I would say, the #ecb ‘s security service is just as good as putins.”

Speaking of Europe…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Google’s not having the best day in Europe either. The all-mighty search engine is getting called out by the European Union for abuses of power. The EU is handing Google a “Statement of Objections,” with an antitrust complaint that accuses the company of favoring and promoting its own services and products over competitors in user search results and comparison shopping. Google has a 90% share in Europe’s search engine market and 35% of Google’s ad revenue comes from Europe. The United States also began a similar investigation but dropped it after Google graciously agreed to make some changes. The changes, however, weren’t enough for companies like Microsoft, Yelp, Expedia etc., who are happy about this probe since they feel that Google’s search engine dominance is making for a very uneven playing field. The EU is also investigating whether Google forces mobile device companies to use them and whether or not those companies are even allowed to tweak Android software.

Shoot ’em up…

Image courtesy of Surachai/FreeDigitalPhotos.net

Image courtesy of Surachai/FreeDigitalPhotos.net

Firearms: Love ’em or hate ’em matters not when there’s money involved. Shares of gun maker Smith & Wesson saw a 13% increase on shares today as the company announced that orders for firearms are picking up.  In fact, the stock hit a high today of $14.75 and is up over 50% since the beginning of 2015. Last year the company took in over $626 million in sales, a record for the company. Even though sales aren’t expected to come close to that figure this year, Smith & Wesson is still expected to rake in between $546 – $550 million dollars –  and no one seems to be taking issue with that. Well, at least not on Wall Street.