Numlock News: July 5, 2018

By Walt Hickey

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More Fuel For The Entertaining Money Fire

For $10 per month, MoviePass subscribers can see one movie a day, and MoviePass will pay for that ticket. This means that every time a subscriber uses MoviePass, MoviePass loses money. It's essentially a wealth redistribution system that takes investor money and gives it to movie fans and I guarantee we will look back in awe on this moment in history when a company was willing to implode so I could see $80 worth of movies in June for $10. Now we've got details on the scope and extent of this money fire and it is breathtaking. Previous SEC documents said MoviePass burned through an average of $21.7 million a month. In May, that figure was $40 million. It expects its June cash deficit will be $45 million. The company told regulators it wants to sell $1.2 billion in stock and debt securities to keep the party going.

Jill Disis, CNN Money

Insurance Against Adverse World Cup Outcomes

Companies take out lots and lots of insurance on the World Cup, and Allianz SE goofed by getting a bit cocky about its home country's chances in the tournament. If you ran a German business who offered a promotion or prize with a German World Cup win, you would probably call Allianz to take out a policy to insure that risk. Allianz, seeing too high of a chance for a German win, declined to offer such policies. With Germany out of the tournament, that's a lot of money left on the table. The total insured value of the World Cup is between $6 billion and $7 billion, higher than the $5 billion value of insurance for the 2014 World Cup in Brazil.

Mengqi Sun, The Wall Street Journal

A Critical Crop Grown In Swing States

China was forecast to buy 97 million tons of soybeans this marketing year. Where they’ll obtain those soybeans from moving forward is now in question, as Chinese companies are expected to cancel most of the soybeans they committed to buy from the U.S. — some 1.14 million metric tons through Aug. 31 — when a new retaliatory tariff takes effect Friday. This spat could continue past that date and could get ugly. China imported 25 million tons of soybeans from the U.S. in the last quarter of 2017 and the first quarter of 2018, and prices for the alternative Brazilian soybeans in August were 70 percent higher than U.S. prices.

Bloomberg News

Square Footage

Occupied retail real estate in 77 U.S. cities fell by 3.8 million square feet in the second quarter. That's the largest drop in occupied retail space since 2009 and the only negative quarter since 2010. The considerable drop is largely due to the closure of Toys “R” Us stores. The national retail vacancy rate rose 0.2 percentage points to 10.2 percent primarily from the Toys “R” Us fallout.

Jordan Yadoo, Bloomberg

Restaurant Margins

Foot traffic in restaurants fell 1.2 percent in May according to data from Miller Pulse, and margins are falling: Earnings before interest and taxes are down, with the median margin dropping from 10 percent at the end of 2015 to 7.6 percent as of the first quarter of 2018. Prices are poised to go up, as labor costs rise due to either minimum wage increases or a tight labor market with a low jobless rate.

Leslie Patton, Bloomberg

Registered Voters

A new Morning Consult/Politico poll found that 52 percent of respondents wanted the Supreme Court justice who replaces Anthony Kennedy to support abortion rights, while 29 percent hoped the next justice would oppose them. The survey — 1,990 registered voters that ran from June 28 to 29 — found that the traditional party lines on access to abortion aren't as unanimous as they may seem. Yes, 73 percent of Democrats hoped Kennedy's successor would support abortion rights and 54 percent of Republicans hoped they would oppose them. But 31 percent of Republicans want the next justice to support access to abortion as do 49 percent of independents, and 13 percent of Democrats want them to oppose abortion rights.

Cameron Easley, Morning Consult

Investors Who Did The Wrongest Thing

A new study looked at the behavior of some 50,000 U.K.-based investors who used Nutmeg Saving and Investment's trading platform and found that men were four times more likely than women to withdraw from investments during periods of market turbulence. Generally speaking, the best thing to do is to factor in general risks when crafting a portfolio and not unwind investments at the first sign of trouble. Most investors got that memo, as only 2.4 percent sold investments or adjusted their risk tolerance when times got tough.

Dani Burger, Bloomberg

People Who Want To Be Here

The Trump Administration has significantly reduced the number of people attempting to legally move to the United States. An analysis of State Department data found the number of people receiving visas to move to the U.S. permanently will drop 12 percent through President Trump's first two years in office. Setting aside dramatic drops from countries targeted by the administration's ban on travel from a set of Muslim-majority countries, the number of visas approved for Africans is on pace to fall 15 percent, and applications for the H-1B visa fell for the first time in five years.

Abigail Hauslohner and Andrew Ba Tran, The Washington Post

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