The Best One Yet - Facebook’s crypto vs. the Fed, Lululemon’s 20K-sq-foot mega-store, and why healthcare stocks jumped big

Episode Date: July 12, 2019

Fed Chairman Jerry Powell was visiting Congress — So he shared his thoughts on Facebook’s planned cryptocurrency (that may have caused Bitcoin to drop). Lululemon whipped up a 20,000-square-foot mega-store/club/studio, a sweatlife store format it wants to take nationwide. And healthcare stocks jumped this week on multiple headlines, so we jump into the factors that drive the unique industry.Learn more about your ad choices. Visit podcastchoices.com/adchoices Hosted on Acast. See acast.com/privacy for more information.

This is Nick. This is Jack. And this is Snacks Daily. It is Friday, July 12. T-B-O-Y, the best one yet. This is a really good snack. Well, we got a lot of first this week. The Dow hit 27,000 for the first time.

Gotta love a nice round number. But our three stories start with Fed Chairman Jerry Powell. He just spoke to Congress all week about interest rates. When he's not listening to Snacks daily. But we're curious what you thought about Facebook's new Libra cryptocurrency. Not a fan. Not a fan. No, he is not a fan.

No, no. Second story is Lulu Lemon. It just opened its 20,000 square foot megastore in Chicago. Is this a social club? That's what they want you to think. Or is it a Jim Locker? What is it? It's like everything.

It's got a restaurant going on. We're going to jump into this thing. Third and final story, healthcare stocks jumped way higher today on two giant gifts for the entire industry. We're looking at one key about the healthcare industry that it thrives on. Pricing strategy. So true. Pricing, pricing. Now, before we hit those stories, we want to mention an awesome hookup from Robin Hood.

Our employer. For snacks, daily listeners. We love you guys. We're going to be giving away a free stock for new Robin Hood customers, aka Robin Hoodies. Go to Snackspodcast.robinhood.com to get it. Now, we talk about stocks a lot on this podcast, so you may have an itch to invest. Robin Hood's a really great place to do this. Here's why.

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Keep those coming. So for Snacks podcast listeners, a free stock is waiting for you if you set up an account. One stock is selected from a pool of stocks like Fitbit, Lyft, or Microsoft. So sign up, and here's the key address again, Snackspodcast.robinhood.com. Once your account is set up, a free stock is sitting right there waiting for you to claim. It's Snackspodcast.robinhood.com to get your free stock. All right. Now listen to these keywords before our story is.

Can't wait. You're tuned in the snacks daily. We spoke to the lawyers and we got to get something legal out the way. The snacks about the hearing food is air candy. They don't reflect the views of the Robin Hood family. It's all informational just so. You know, we're not recommending any securities. It's not a research report or investment advice.

Not an offer or sale of a security. Snacks is digestible. Business news for you. Robahood Financial, LLC, member FINRA slash SIPC. Jack, tighten up your spanned out. For our first story, Lulu Lemon's new 20,000 square foot store is a huge retail store, and it shows the future of retail. This is the best thing to happen to Chicago since Wrigley Field. So Lincoln Park, Chicago is getting the same.

And if you Google Lulu Lemon News Store Chicago, which is kind of fun. You'll see some competing headlines. One will say it opens a gym. One will say Lulu Lemon opened a restaurant. Another, you might even find that it opened a co-working space. Because the answer is C, all of the above SAT style. So this is like a we work meets hotel meets gym situation. On the first floor, it looks like a pretty conventional Lulu Lemon store with wonderful, stretchy clothes.

Classic merchandise. You get up the floor, too. The succulents even have succulents. There's like a West Elm bookshelf. There's a stack of pretty books. Pretty, pretty books. Because they got to look good for the photos. It is a welcoming place that is full of awesome experiences.

Now, let's walk you through how the experience works. First, you're going to sign in with a concierge at the second floor. And then you get to choose three different studios that have three different kinds of classes going on. So you got meditation as an option. yoga as an option, and then a high-intensity interval training thing that's like a cardio workout craziness. You can sign up for all these things like typical yoga style on mindbody.com. Right, we're talking like berries before berries. So the classes cost about $25 each. They have 50 different classes per week. And you're already behind. We wish we told you earlier. They've sold out week

number one. You're going to have to wait until week number two comes out. Get this. You can test out the Lulu Lemon clothes in those classes. Not sure how the sports bra fits. Try it on. Use it and then hand it back Kalulu. You didn't buy it. Most stores have dressing rooms. True. Lulu Lemon has a dressing studio. Jack's been waiting to drop that. They better clean this stuff because I sweat hard in the yoga studio. Now, shopping and workouts, those things can vary to them different times a date.

They want to get you in the store consistently, so they're focusing on another key. Food. In addition to those studios we just talked about, they have a restaurant that is called fuel. It's serving plant-based meats, smoothies, I'm sure. Awesomeables, I'm guessing. Of course. It even has a liquor license.

True. And executive chef, chef, chef Paul Larson, has kind of. and said he's made the menu so it like can switch up really quickly because you know about your buddy who is keto one week, paleo the next and just went back into some mysterious diet that we can't understand. Now, you might have noticed that typical Lulu Lemon stores have brand ambassadors. They even have like photographs of them up on the wall. We looked into this. The average store has eight Miranda Bastert. This one in Lincoln Park, Chicago has 45. Including a dietitian who advised the fuel restaurant menu and has like 50,000 Instagram followers. This is sweat life to the max. Shopping, working out, eating all insuffet. You're thinking. You're probably going to set up your next meeting here.

Well, there's a little bit of caution because it's not all fun in games with this big real estate investment. I don't know how much this building cost, but I know it was a lot. CFO had to sign off on this thing twice. And Lulu Lemons really focused on real estate. They're expecting double-digit growth in physical store footage over the next few years. And their plan is that 10% of their stores in the year 2023 will be laid out like this with studios, restaurants, dressing studio. So it seems like it's going to be a lot of fun. it is a huge investment. So Jack, what's the takeaway for our buddies over at Lulu?

We've said it once. We'll say it again. Please. Retail's not dead. Bad retail is dead. Preach restoration hardware. We've told you about them. They've turned a store into a dating destination in New York. Casper, the private mattress company, has launched NAP stores in a number of cities. And then Albert's the direct-to-consumer shoe company. They've got an hamster wheel at their New York location to get you involved, get you in the store,

and actually trying them on a human-sized hamster wheel. Successful retail stores are offering physical experiences that online. shopping on your couch, can't touch. By the way, this is Jack, and I own shares of Lulu Lemon. For our second story, Fed Chairman Jerry Powell is a quote-unquote seriously concerned human with Facebook's new cryptocurrency. It's funny. Some call him Jay, some call them Jerome. We call him Jerry. We go with Jerry. I like Jerry. I feel like he knows us. So the Fed Cherry, Jerry, he's arguably the most powerful financial person in the world. And he's had a busy last 48 hours because he was speaking to both the Senate and then to the

House of Representatives with a focus on interest rates. Yes. He's probably going to lower interest rates this summer to make sure economic growth continues. Now, everyone was talking about interest rates at Snacks Daily. We thought it was really interesting how we talked about Facebook, aka Zuckbucks. And Libra, aka Zuckbux. Now, it's time for an update on the Zuckbucks. Last month, Facebook announced Libra, the digital payment method for the entire world accessed through the Facebook app. People were excited. Politicians were not happy. It was met with intense backlash. Can we tell you about the Financial Services Committee's letter that said, quote, immediately cease implementation plans, Facebook.

Or the senator from Ohio that called it Facebook's monopoly money. But it's not just in D.C. 27 of the corporate partners like Uber and Visa who signed up to run the thing with Facebook, there's reports that they're really nervous and not sure this whole thing's going to work. Yeah, they kind of jumped in for a FOMO situation and they're a little nervous. So Jerry Powell, everyone wanted to hear what he thought about Facebook's cryptocurrency. And he dropped two powerful words. Quote unquote, he has serious concerns.

Now he's going to set up a working group of regulators who are going to investigate the Facebook Libra cryptocurrency and kind of see what the potential is. That regulatory group could put a kibosh on the whole thing. Now, Bitcoin happens to be the biggest cryptocurrency on the blockchain playground these days. It dropped on the news. It dropped by 12% on Thursday on this news because Facebook and the Libra, it could be a validator for all of cryptocurrency and help it go mainstream. So, Jack, what's the takeaway for our buddies at Facebook and Libra, the cryptocurrency? The 2020 launch date Facebook announced, it looks completely undoable. Now, the Bank of England's Mark Carney says that Facebook cannot just, quote, unquote, learn on the job or, quote, unquote, not be rock solid.

Yeah, he said everything has to be figured out before they launched. And Jay Powell, he listed off the concerns he has very nicely yesterday, so we'll repeat them to you here. I think we should jump into this. First concern, money laundering. People could use this cryptocurrency for drug deals and illicit activity via Facebook. Second concern, privacy. Because, you know, Facebook. Third concern, consumer protection. Fraudsters could be running free, ripping people off with like the rabbits' Facebook group.

If you love rabbits, donate here. And boom, they're taking your Libra. And they're beyond regulators' reach. And then finally, there's financial stability. Yeah, what if Libra has a crisis? Will that spread to other financial markets? And what's that going to look like if regulators can't control Facebook? So these four categories are all very risky for society and for people like you and men. Now, the interesting thing here is that no one's really stopped Facebook. from doing pretty much anything yet.

Yeah, they have done whatever they've wanted, but this could be the first time it gets stopped. For our third and final story, healthcare stocks just jumped hugely because of two big developments. Nick, what is one of the few, few, few bipartisan issues out there? I'm going to select A, the price of drugs. Reducing drug costs.

That's one of the huge things. And yesterday, two developments hurt that cause. Now, if you're looking at healthcare stocks right now, you'll notice that yesterday they jumped pretty big. United Health is one of the biggest insurers, and it had the biggest jump in the Dow by 5.5%. And there are only 30 stocks in that Dow Index. CVS is a pharmacy that also owns health insurance company at not. It jumped 5%.

And Cigna, another health insurance company, is up 9%. Now, we wanted to jump into this because we were curious about the healthcare industry, which can be very confusing. We noticed there were two big issues that happened this week. Two proposals are on the table to try to reduce the price of drugs. So here is the first one. The first issue was drug prices on TV. The idea from President Trump was to make drug makers put a sticker price on every single drug TV ad. Right.

Because if you're looking at an ad and you see two couples in a bathtub trying to have a really fun night, it may change whether or not you buy that drug if you know it's $39 for the fun night. Right. So the idea is make consumers aware of prices because drug makers might just be embarrassed by how expensive things are. It's a shame strategy. It's a shame strategy. You show the price and it's going to make the drug makers lower the price because they know you're staring at it. If they have to tell everyone it's $7,000 a pill, they might get shamed into lowering the price.

So what happened this week? The result was that a federal judge said no to this proposal to make drug companies show their prices and ads. Yeah, they said that that was an unconstitutional thing, so the plan is dead. So that was the first issue. The second one's a little more confusing. It has to do with eliminating a very costly middleman in health insurance. So there is a discount or rebate that drug makers give to companies that represent your health insurer. And the idea is to eliminate that rebate because the discount isn't passed on to you or me. It just drives up prices. So the purpose of this second proposal was that since your health insurance companies

represented by this third party who's getting like a kickback from the drug companies, they're incentivized to either pick the drug that's highest priced or get a discount that's never passed on to you. Do you see how complex drug pricing is in this country? If you have to rewind and put us on point five, we don't blame you. We do that to ourselves sometimes. Now, that plan kind of got aborted this week because probably because government agencies couldn't even understand what the proposal was. But basically a lot of lobbyists were involved in this. And it looks like they're not sure about what the actual costs will be.

Lobbyists probably won this battle. So, Jack, we just nailed down two critical healthcare developments of the week. What is the takeaway for our buddies over at health insurance companies? Pricing can define an industry. Healthcare as an industry happens to thrive off of pricing. opakness, aka anti-transparency. People just don't compare prices when they're thinking about getting a critical drug. That's the reality.

Or if you're in a bathtub and you're just having to have a great night, you're not going to look at the cost. And that's for a bunch of reasons. One, you don't ever see the price they add. Two, you just do what your doctor says. And third, no matter what health insurance will probably cover it if you are insured. Now, what we thought was so interesting is that, again, this is a bipartisan supported issue.

And these two initiatives that we just outlined had bipartisan support. But the system is so complex. and there's so much lobbyists that nothing happened this week, so healthcare stocks jumped. And they jumped because pricing will remain a complete mystery. Jack, can you loosen up the spandex and give us the takeaways over there? Lulu Lemon is transforming its stores into everything stores for people living the sweat life. Remember, retail's not dead, bad retail's dead. The Fed, Congress, and regulators around the world are not fans of Facebook's cryptocurrency cryptocurrency.

And this could be the first group that ends up saying no to Zuck, because we haven't seen that. Healthcare companies scored another win as two proposals. to cut drug prices died this week. And this is an industry entirely based on pricing strategy. Now, time for our snack fact of the day. This one sent in by Amber, who it took a while to get it because she sent it from the North Pole. The North Pole is a real town in Alaska. We didn't make it up.

Ironic, because it's slightly south of Fairbanks. And you don't have to just believe in it to make it real. Now, Amber told us straight up. She hasn't verified this fact, but we're going to tell you anyways. Alaska sells more ice cream per capita than any other state in the country. Now, Amber, we love our snackers. You're right, we couldn't verify that. We were actually concerned.

So instead, we found a verified fact to add on to yours. We feel like it's like a combo fact, like chalking them and all ice cream together. The average American eats 20.8 liters of ice cream per year. Now, we know brains can't compute that until we put this in pints. So in terms of pints, we're talking a big number. 44 pints, which is one-tenth of a lift. Now, a couple other great stories we're snacking on in our snacks daily. All right, Lyft has increased prices for ride hails in over 100 cities,

and Uber is expected to follow suit. Snackers, loved having you on with this this week. It felt like a pretty good week. Actually, maybe the best one. Have a fantastic weekend. We're going to catch on Monday. We'll be back, money. Yeah, wait.

The Robin Hood Snacks podcast you just heard reflects the opinions of only the hosts who are associated persons of Robin Hood Financial LLC and does not reflect the views of Robin Hood Markets, or any of its subsidiaries or affiliates. The podcast is for informational purposes only, is not intended to serve as a recommendation to buy or sell any security, and is not an offer or sale of a security. The podcast is also not a research report

and is not intended to serve as the basis of any investment decision. Robin Hood Financial LLC, member FINRA SIPC.