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| Here's your daily business briefing. - 🍟 McDonald's spinoff CosMc's debuts this week
- 🌍 Deep Dive: Fossil fuel emissions to peak in 2023
- 💊 AbbVie buys Cerevel for $8.7B
Make sure to continue reading the Quarterly Earnings Report and the Quick Hits. Thanks Shriram
p/Shriram | |
| 1 | | McDonald's is launching its new spinoff brand, CosMc's, with the first location in Bolingbrook, Illinois. The fast-food chain intends to test the concept by opening 10 CosMc's locations, with nine planned in Texas by the end of 2024, drawing inspiration from the McDonaldland mascot CosMc, an alien with a penchant for McDonald's food. More: - McDonald's intends to establish CosMc's as a quick and easy choice for coffee and snacks, especially in the afternoon segment.
- Menu offerings include new dishes like Churro Frappes and pretzel nibbles and classic favorites like Egg McMuffins and M&M McFlurries.
- Compared to a typical McDonald's restaurant, CosMc's will have a smaller real estate footprint and test out different layouts, such as multiple drive-thrus.
- Chris Kempczinski, the CEO of McDonald's, emphasized the $100B market for coffee and customizable drinks that could develop quicker and earn more profits.
Zoom Out: - McDonald's previous attempts to diversify, including acquiring Donatos Pizza and Boston Market and investing in Chipotle Mexican Grill, were unsuccessful.
- Starbucks credited robust sales of premium lattes and customized drinks for the growth in its U.S. sales for the quarter ending on Oct. 1.
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What the numbers say: Global carbon dioxide emissions from burning fossil fuels are expected to reach a record peak of 36.8 billion metric tons in 2023, marking a 1.1% increase from 2022 and a 1.4% rise from 2019. Despite efforts to cut emissions, meeting the Paris Agreement's 1.5°C target requires a consistent annual drop of around 9%. Relevance: The 2023 estimate suggests that the world is heading toward exceeding its carbon budget for 1.5°C warming by 2030, underscoring the need for more robust measures to reduce emissions despite notable declines in fossil-fuel emissions in over two dozen countries contributing to over a quarter of the world's total. More data: The European Union saw a 7.4% reduction in emissions driven by decreased fossil-fuel usage, while India surpassed the EU as the world's third-largest emitter with a 9.5% increase in coal emissions. China, responsible for 31% of global carbon emissions, maintains its position as the largest emitter, with the U.S. trailing at 14%, highlighting the insufficient growth of renewable energy to replace fossil fuels and the crucial need for effective policies. | | | |
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| 3 | | AbbVie Inc. is set to acquire Cerevel Therapeutics in an $8.7B deal, with AbbVie offering $45 per share in cash, reflecting a 22% premium to Cerevel's Wednesday closing price. This acquisition follows AbbVie's recent $10.1B deal for cancer drugmaker ImmunoGen and is motivated by the imperative to counter declining sales of its flagship anti-inflammatory drug Humira, which faces competition from more affordable alternatives. More: - Founded in 2018 by Pfizer and Bain Capital, Cerevel Therapeutics focuses on treatments for Parkinson's and schizophrenia but has not released any drugs.
- The acquisition is perceived as a tactic to add possible therapies to AbbVie's pipeline, addressing gaps in treating neurological and mental illnesses.
- Cerevel's shares surged 16% to nearly $43 after closing, nearing the acquisition price, while AbbVie's shares slightly dipped in extended trading.
- Cerevel's emeraldine, targeting schizophrenia and Alzheimer's disease psychosis, is poised for two pivotal data readouts next year, with analysts predicting blockbuster potential.
- The biotech industry is seeing a trend in AbbVie's recent acquisitions; the company closed 19 deals valued at more than $500M in 2023, up from 15 the year before.
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| 4 | | To compete strategically with Chinese fast-fashion company Shein, Amazon is lowering seller fees for clothing priced below $20. Starting in January, the commission rate for clothing below $15 will be reduced to 5%, and for clothing priced from $15 to $20, it will be reduced to 10%, down from the previous 17% for both categories, reflecting a response to Shein's success in the low-cost apparel market, where it offers items like $9 hoodies. More: - The action is perceived as a strategy by Amazon to preserve its leadership in the U.S. online retail sector, where it accounts for more than $1 of every $3 spent.
- Shein is a competitor of Amazon in the low-cost clothing market; thus, the fee reductions are meant to boost Amazon's competitiveness without driving away Prime members with Shein's alluring deals.
- A representative for Amazon stated that the fee reduction is intended to maintain competitive rates and give customers more options, with a focus on promoting the expansion of selling partners.
Zoom Out: - Amazon has encountered difficulties in the clothing industry despite its dominance, as demonstrated by the recent closing of its Amazon-style clothing stores in Ohio and California in November 2022.
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| 6 | | In October, U.S. job openings fell to a two-year low of 8.7 million, approaching pre-pandemic levels. The Bureau of Labor Statistics data indicates a slowdown in the labor market, with 1.3 job openings for every unemployed person. More: - The total number of job vacancies in October was lower than anticipated by economists, who had projected 9.3 million openings.
- The Federal Reserve desires more slack in the labor market to prevent excessive pay increases, with a balanced supply and demand for workers.
- With just 150,000 new jobs added in October — the second-lowest monthly total since 2021 — job growth has progressively declined.
- Employers' prudent approach is noticeable, as evidenced by the slower growth in job vacancies, especially in the retail and banking sectors.
- According to JOLTS data, the labor market is contracting, with fewer new hires and more layoffs, indicating weaker pay growth and economic instability.
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| 7 | | Quick Hits: - Want to master Kubernetes? The Kubernetes Cookbook is a must-have guide to discover guidance on cloud architecture analytics, optimization, governance, and more.*
- Charter's shares fell 8% as CFO Jessica Fischer suggested a possible loss of broadband subscribers in Q4, and Comcast's stock dropped over 3%.
- The 30-year mortgage rate, which briefly rose to 8%, retreated to around 7%, leading to a 14% weekly increase in applications to refinance, surpassing the same period last year by 10%.
- As the English Premier League investigates Everton's acquisition, 777 Partners alleges a concerted effort to sabotage its ownership of the club.
- Frasers Group Plc maintains its profit target for the year and anticipates substantial growth in 2025 and beyond, navigating the challenges of Britain's cost-of-living crisis.
- Toast to 2024: Key affiliate marketing trends to help your campaigns start off on the right foot in the new year. Get the free report.*
*This is a sponsored listing. | | | |
 | Freelance Writer | | Shriram is pursuing Master’s in Business with Marketing at Warwick Business School. He worked as a Senior Consultant in Tech and Political Consultancies before his Masters. He is passionate about Tech, Marketing, Strategy, Anthropology and Politics. He is also the Postgraduate Ambassador for Warwick Business School. | | This newsletter was edited by Aaron Crutchfield | |
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