☕ So long, partner

Florida just went there with Disney...
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April 22, 2022 View Online | Sign Up | Shop

Morning Brew

Fidelity

Good morning and Happy Earth Day. As we reflect on our little blue marble floating in the infinite expanse of space, there's no better time to update your email signature to reflect your cosmic address.

For instance, the Empire State Building would be located at 20 W. 34th St., New York, New York, USA, Planet Earth, Solar System, Oort Cloud, Local Interstellar Cloud, Local Cavity, Orion Arm, Milky Way, Local Group, Virgo Supercluster, Laniakea Supercluster, the Universe.

Neal Freyman, Matty Merritt, Max Knoblauch

MARKETS

Nasdaq

13,174.65

S&P

4,393.66

Dow

34,792.76

10-Year

2.845%

Bitcoin

$40,723.97

Tesla

$1,008.78

*Stock data as of market close, cryptocurrency data as of 11:00pm ET. Here's what these numbers mean.

  • Markets: Not even this week's strong earnings from the likes of Tesla could give stocks a pick-me-up in this gloomy market environment. All three equity indexes closed lower on a day when Fed Chair Jerome Powell said that even bigger interest-rate hikes were on the table for the central bank's next meeting in a few weeks.

GOVERNMENT

Florida to Disney: So long, partner

Disappointed Woody meme Disney

Florida's GOP-controlled legislature passed a bill that revokes Disney's ability to basically self-govern its theme park. The bill will now head to Governor Ron DeSantis's desk, where he's expected to sign it—and in doing so, fully obliterate the Timon and Pumbaa-level bond that Florida and Disney had long enjoyed.

Considering there was no political discussion around Disney World's special tax status until very recently, the move is widely seen as retaliation for Disney's criticism of a Florida law that restricts discussion of gender identity and sexual orientation in some classrooms.

  • After initially declining to put out a statement, Disney faced an uproar from employees and changed course. It condemned the bill, paused political donations to Florida politicians, and said it would work to repeal the law.

Republican lawmakers said their move to dissolve Disney's district wasn't a matter of vengeance. But GOP Rep. Randy Fine also told CNBC that "when Disney kicked the hornet's nest, we looked at special districts."

So how big of a deal is this?

It's not small. Disney's been operating the special administrative zone, called the Reedy Creek Improvement District, for 55 years. Under the deal it worked out with Florida, Disney is allowed to build new structures without local approval and is exempted from certain environmental and wastewater codes.

Dissolving Reedy Creek means that local governments would need to take over the municipal services that used to be paid for by Disney, such as road projects that cost hundreds of millions of dollars. It also means that taxpayers would be on the hook for $1 billion in debt on Reedy Creek's balance sheet.

Democratic Mayor of Orange County Jerry L. Demings, where Reedy Creek is partially located, told Bloomberg he believes the legislature has not "adequately contemplated the ramifications."

But this thing is far from over. Expect it to face legal challenges and likely end up in the courts, experts say. David Ramba, executive director of the Florida Association of Special Districts, told CNBC that he hasn't seen any special districts get dissolved that didn't want to be dissolved, not to mention one run by a $222 billion corporation. The only outcome he's sure of is that "a lot of lawyers are going to get paid."—NF

        

TOGETHER WITH FIDELITY

Go green: building a portfolio with purpose

Fidelity

As an investor, you can take your portfolio in a number of different directions—why not choose a path that goes for green in more ways than one?

That's the goal of the Fidelity Climate Action Fund. It enables investors to support companies that either prioritize, remove, reduce, or mitigate the effects of climate change.

It's a fund that aims to create an environmentally focused and balanced strategy with long-term growth potential. A strategy that understands:

  • In the next decade, the US utility industry's capacity to generate wind and solar energy could grow from 14% to 39%.1
  • On average, climate adaptation and decarbonization measures would create 10 US jobs per $1 million invested.2 

Powered by Fidelity's active management insights and expertise, the Fidelity Climate Action Fund can help you approach opportunities in the green transition with confidence.

Learn more about the Fidelity Climate Action Fund today.

WORLD

Tour de headlines

Maxar satellite imagery overview of Azovstal Iron and Steel Works, eastern Mariupol, Ukraine Satellite image (c) 2022 Maxar Technologies

Ukraine latest: All eyes are on Mariupol's sprawling Azovstal iron and steel plant, where the city's remaining defenders and about 1,000 civilians are holed up. Russian President Vladimir Putin called off a planned storming of the facility, instead telling troops to seal it off "so that a fly cannot pass through." After meeting with the Ukrainian prime minister, President Biden announced the US is sending another $800 million military package to Ukraine.

Elon Musk says he's got funding secured. And this time he may actually mean it. In a securities filing, Musk said he's received $46.5 billion in commitments to help finance a potential tender offer to buy Twitter (he offered $43 billion). More than $25.5 billion of that comes through debt financing via Morgan Stanley Senior Funding and other partners. He's putting up $21 billion of his own money.

Sheryl Sandberg allegedly leaned on reporters. On two separate occasions, in 2016 and 2019, Meta's COO reportedly pressured the Daily Mail's digital edition to quash stories about then-boyfriend and Activision Blizzard boss Bobby Kotick. The stories would have revealed that Kotick's former girlfriend filed a temporary restraining order against him, but a team of Facebook and Activision employees strategized to quash the reporting, according to WSJ. Meta denies any wrongdoing by Sandberg.

        

ENTERTAINMENT

CNN+ after one month

Spongebob getting out of chair meme with text "ight imma head out" Paramount Global

Warner Bros. Discovery said yesterday it's shutting down the roughly three-week-old streaming service, CNN+. We get it, newborns freak us out, too, but this sudden move by the newly merged media behemoth is further proof that consumers are over signing up for new subscriptions for the heck of it.

CNN+ rolled out on March 29 with big ambitions, having spent $300 million for big names like Chris Wallace and Audie Cornish. But it failed to attract a big audience—fewer than 10,000 daily users tuned into the service within the first two weeks, per CNBC. For reference, CNN+ spent about $9.4 million a day compared to the other short-lived streamer, Quibi, which used up $1.75 billion over 239 days, or $7.32 million per day.

  • CNN had planned to spend ~$1 billion on the service in the first four years to make it profitable.

Big picture: David Zaslav, the former CEO of Discovery and new boss of the post-merged Warner Bros. Discovery, wasn't pumped about the CNN+ project before coming into the role. After pulling the plug, he will likely bundle all of the company's video offerings, including Discovery+ and HBO Max, into one app.—MM

        

ENVIRONMENT

Air pollution's making an unwanted comeback

An image of North America from space, clouded by pollution Francis Scialabba

After a nearly two-decadelong decline, US pollution levels have risen sharply over the past five years, according to a new report by the American Lung Association. In fact, more than 137 million Americans live in areas with poor air quality.

This news doesn't mean you have to cancel your Earth Day party, but you may want to change the vibes from "kegger" to more of a "somber yard get-together" deal.

The annual State of the Air report found that 63 million people lived in counties exposed to dangerous levels of deadly particulate matter pollution this year—9 million more people than the previous year. And, according to the study, people of color are disproportionately affected by that pollution: They are nearly four times more likely than white people to live in a county with poor air quality.

  • Particulate matter pollution can come from fossil fuel plants, cars, and agriculture. Increasingly, though, spikes are being caused by hotter, longer-lasting wildfires in the West, which produce smoke that can drift as far as New York City.

Those wildfires are a big part of the reason that California topped the charts in terms of air pollution. The state has 11 of the 25 most polluted cities.—MK

        

GRAB BAG

Key performance indicators

chart of biomass on the Earth Our World in Data

Earth Day stat: Humans account for 0.01% of all biomass on the Earth, and just 2.5% of animal biomass. But where have we made the biggest impact? In raising livestock. Livestock accounts for 4% of animal biomass, compared to 0.38% for wild mammals and birds.

Quote: "One of our learnings from past mistakes is to act promptly when we discover new information about an investment that is inconsistent with our original thesis. That is why we did so here."

Just three months after scooping up a $1.1 billion stake in Netflix, hedge fund billionaire Bill Ackman decided that he doesn't have the stomach for the bumpy ride ahead. He sold his entire Netflix holdings for a loss of about $400 million.

Read: There's an article for everyone in the latest issue of Works in Progress. (Works in Progress)

Ask: We asked readers yesterday whether they would continue to mask up on planes now that it's optional. 46% said they would still wear a mask, while 54% said they wouldn't.

        

QUIZ

The Northquiz

Weekly news quiz

The feeling of getting a 5/5 on the Brew's Weekly News Quiz has been compared to getting a Starburst pack with all pink.

It's that satisfying. Ace the quiz.

BREW'S BETS

Have you thought about investing in real estate? Get started with free access to education, analysis tools, and a supportive community of more than 2 million members.

Friday vibes: Here are some old movie stars dancing to "Uptown Funk."

Corporate tea to sip this weekend: White Hot: The Rise & Fall of Abercrombie & Fitch on Netflix.

New from the Brew: IT pros, start your countdown! IT Brew launches May 2, bringing the latest news and trends shaping the IT industry straight to your inbox. Subscribe today to catch the first issue.

WHAT ELSE IS BREWING

  • Philadelphia pulled its indoor mask mandate just days after reinstating it.
  • A new study found that time-restricted eating, a form of intermittent fasting, had no effect on weight loss.
  • The FAA will revoke the pilot certificate of Trevor Jacob, a YouTuber whom the agency found to have purposely allowed a plane to crash last year (Jacob had said it malfunctioned).
  • The average interest rate on a 30-year mortgage rose to 5.11%, its seventh straight week of gains and the highest level since 2010.
  • Mark Zuckerberg and 28 other Americans are not allowed to enter Russia under new sanctions unveiled by Moscow.

GAMES

Friday puzzle

Today's brain teaser comes from The Guardian.

Replace each letter in the word LOLLIPOP with one of these symbols: 0 1 2 3 4 5 6 7 8 9 + - x ÷ =, so that the word becomes a balanced equation. Within the word, the same letter becomes the same symbol and different letters become different symbols.

Example: For CLEVER, the answer would be 9 + 1 = 10.

If you get LOLLIPOP, try ESCAPEES or REFERRAL.

FROM THE CREW

Enter our YouTube giveaway

Morning Brew's YouTube giveaway

In this episode of Street Value, we hit the streets of New York to find out which famous CEO people would trust with their future. Subscribe to our YouTube channel and leave us a comment on the video and you'll be in the running to win $500. We'll pick three lucky winners on April 25. Watch now.

*Terms and conditions apply. US entries only.

ANSWER

LOLLIPOP: 1 + 11 = 6 + 6

ESCAPEES: 25 x 9 = 225

REFERRAL: 43 = 344 ÷ 8

✢ A Note From Fidelity

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus, offering circular or, if available, a summary prospectus containing this information. Read it carefully.

Investing involves risk, including risk of loss.

1. Source: Morgan Stanley, Coal capacity to be gone from U.S. power grid by 2033

2. McKinsey & Company, America 2021: Renewing the nation's commitment to climate action

Fidelity Brokerage Services LLC, Member NYSE, SIPC. © 2021 FMR LLC. All rights reserved.

985338.2.0

         

Written by Neal Freyman, Max Knoblauch, and Matty Merritt

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