Quest's Profitable Moment
Two black men were arrested at a Philadelphia Starbucks for doing absolutely nothing. A photograph of the incident was seen around the world.
It was a potential disaster for Starbucks (SBUX). Recognizing that, CEO Kevin Johnson immediately came out and announced that Starbucks was going to put it right.
He said the store manager had been wrong to call the police. It was wrong to have the men arrested. The only ones not in the wrong were the two men waiting inside the Starbucks.
Not only did Johnson apologize, but he announced that 175,000 Starbucks employees in the United States would undergo unconscious bias training.
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You could say it was a textbook example of how to handle a PR disaster. But it's deeper than that for Starbucks.
If you look at the company's values and mission statements, the CEO was simply practicing what Starbucks preaches.
In trying to put things right, Johnson was making sure the company was living up to its principles.
This is a lesson for every other CEO out there: Don't head for the hills at the first sign of disaster like Facebook (FB) and Equifax (EFX). Take a sip from Starbucks' cup and face it head-on.
Do what's right. Your investors and your customers will thank you for it.
Big banks are minting money
President Trump has been very kind to America's biggest banks. His corporate tax cut has fueled blockbuster profits. And the recent market mayhem, which Trump played a role in, was good for banks, too. Morgan Stanley (MS) and Bank of America (BAC) reported record earnings this week. And JPMorgan (JPM) hauled in the biggest quarterly profit by a US bank. Ever. Yet the mega profits haven't impressed shareholders much. They know markets won't be volatile forever. And tax rates won't keep shrinking. The underlying business — lending money — will need to accelerate for banks to sustain the success. — Matt Egan
'Fearless Girl' is moving
The fate of the "Fearless Girl" statue is finally resolved: After spending more than a year staring up at the iconic "Charging Bull," the bronze statue will move to face the New York Stock Exchange by the end of the year. It's not a big change — right now, both "Fearless Girl" and the "Charging Bull" are in a small park a few blocks from Wall Street and the NYSE. But the relocation means that the statue, which has become a beloved symbol of empowerment and the push for gender equality, is ensured a long-term home in Manhattan's financial district. The bull might move, too, though the city hasn't said when or where. — Danielle Wiener-Bronner
Weak dollar is good for big US companies
Trump accused China of playing a currency devaluation game — days after the Treasury Department failed to call out China for currency manipulation. The dollar has lost ground versus the yuan and other currencies this year. That's great for blue chips like Oracle (ORCL), FedEx (FDX) and Nike (NKE). A weaker dollar makes their products less expensive overseas and lifts the value of international sales once they are translated back into dollars. But how much longer will the greenback stay in the doldrums? More Fed rate hikes should boost the dollar. Trump even said in January the dollar will get "stronger and stronger." — Paul R. La Monica
'Black Panther' comes to Saudi Arabia
Saudi Arabia ended a decades-long ban on movie theaters with a screening of Disney's "Black Panther" this week. The opening of the AMC (AMC) theater in the Saudi capital of Riyadh is part of an economic overhaul that the kingdom hopes will spur growth and diversification, and reduce its economic dependence on oil. More theaters are expected: Both AMC and Vue International plan to open dozens of cinemas in the coming years. — Jill Disis
Quick takes
St. Louis Fed President James Bullard told Quest on Wednesday he worries that the flattening yield curve means a recession is on its way. Meanwhile, Trump picked a vice chairman and a Fed governor to fill two more empty seats on the Federal Reserve Board.
China introduced a huge import charge on US shipments of sorghum, a grain that is used to feed livestock and make a liquor that's very popular with Chinese drinkers.
Toys "R" Us rejected a $675 million bid for 200 of its remaining 735 US stores. Isaac Larian, the billionaire toymaker behind Bratz dolls and Little Tikes, said he'd keep fighting to buy Toys "R" Us.
Netflix (NFLX) added 7.4 million subscribers in the first three months of 2018, the vast majority of them outside the United States. Netflix now has 125 million subscribers.
Amazon (AMZN) has more than 100 million Amazon Prime subscribers around the world, Jeff Bezos told shareholders in an annual letter. And Amazon is expanding its footprint in physical stores, partnering with Best Buy (BBY) to sell smart TVs.
What's next
GE's financial report: General Electric (GE) will report its first-quarter financial results on Friday, and will hold its annual shareholders meeting on Wednesday. GE faces a mountain of problems, including a ton of debt, a pile of legal troubles, the biggest pension shortfall in the S&P 500 and a cash crunch caused by decades of bad decisions. GE shares are down 20% this year.
Facebook faces investors: Facebook will report earnings on Wednesday, facing Wall Street analysts for the first time since its data privacy scandal erupted in March. CEO Mark Zuckerberg survived his testimony before Congress earlier this month, but analysts could ask tough questions about how Facebook plans to restore customers' trust without angering advertisers.
