Hi! If your stop at Starbucks seemed a little duller this morning, it wasn't just the Monday blues — the chain's new dark dress code, designed to let baristas' green aprons "shine," kicked in today. We're exploring:
Big deal: America's updated tariff agreement with China.
Liquid assets: Nestlé wants to spin off its bottled water business.
Only natural: De Beers is shutting its lab-grown diamond division.
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TOGETHER WITH
Weekend in Geneva yields a US-China trade deal
Tariffs on. Tariffs off. Tariffs on bigly. Tariffs on (but less so).
That's the short version of the US-China trade negotiations of the last few months, with stock markets going vertical on Monday morning after a bilateral statement from the United States and China signalled a reprieve in the trade war that has topped investors' concerns for much of this year.
Through repealing some sections of two executive orders, and modifying parts of another, the US tariff rate on China is coming way down, as is China's levy on US goods. For the next 90 days:
US tariffs on Chinese goods will drop to 30%, from 145%.
Chinese tariffs on US goods will drop to 10%, from 125%.
In early trading, US stocks were soaring, with the S&P 500 up 3%, and the tech-heavy Nasdaq 100 pushing even higher — Apple was up more than 6%, and Amazon popped more than 8%.
As analysts dissect this latest chapter in the trade saga, it's still worth zooming out on where the latest rates could leave consumers. With tariffs at 30%, plenty of goods that Americans buy might become more expensive, and many importers may look for alternative suppliers — but which goods do we buy almost exclusively from China?
If you're someone who buys a lot of fake flowers, vacuum flasks, children's books, lamps, or umbrellas — or if you're planning a blowout July 4th firework display — you'll likely notice prices being 30% higher than they used to be for at least (or at most) the next 90 days.
Nestlé is trying to spin off its bottled water business
Nestlé, the world's largest food and beverage company, likes big markets with lots of potential customers. And yet, the company wants to get out of the water business.
After announcing plans to spin offits bottled water segmentas a stand-alone unit last November, the Swiss giant has now hired investment bank Rothschild to advise on the sale of the division, as reported by Reuters on Thursday.
The unit features heavyweights in the "I have enough money to not ask for tap water" game, like Perrier and S.Pellegrino, and could be worth as much as 5 billion euros (~$5.5 billion), with several private equity firms purportedly interested in bidding.
Drop in the ocean
The move comes as part of Nestlé's wider strategy to slim down, with new CEO Laurent Freixe trying to focus on just 30 or so of the bigger namesin the food giant's portfolio of some 2,000 brands — including Nescafé coffee, Purina pet food, Lactogen baby formula, and Kit-Kat chocolate bars, among many others.
Indeed, it's hard to overstate how vast Nestlé actually is. If you sampled one of the company's brands every single day, it would take you over 5.5 years before you'd tried them all.
But the group's revenues still boil down to its biggest names. Nestlé's beverage sector constituted 27% of the group's huge net sales, worth ~91 billion Swiss francs (~$101 billion) in 2024, with petcare brands making up 21%. Meanwhile, its water division made up just 3%.
H2GO
Still, water has become a turbulent category for Nestlé in recent times. Besides scarcity fears mounting and demand for bottled water weakening more broadly, Perrier in particular is currently embroiled in a filtering scandal. Just last week, the French government ordered Nestlé Waters to remove its microfiltration systems and stop using the term "natural mineral water" to describe the brand.
Death & Co is defining modern hospitality with 7,500+ weekly bar visitors and $14M in annual revenue for FY2024.1 They also have multiple award-winning books and placements on "best-of" awards lists including William Reed's North America's 50 Best Bars list — putting the company in a good position to pursue strategic growth.
What's even more exciting is that they're giving readers an opportunity to participate in their latest funding round as they increase their global presence.
De Beers is closing down its lab-grown diamond operation
In recent years, man-made diamonds have surged in popularity — so much so that even De Beers, the world's leading diamond company, got into the lab-grown game with its Lightbox brand range back in 2018. Just seven years later, though, the company is shutting its synthetic gem business, announcing its "commitment to natural diamonds" last week.
Indeed, wholesale prices for lab-grown alternatives to the symbol of eternal lovehave slumpedin the years since Lightbox was established, sending 52% of American couples rushing to incorporate the cheaper stones into their engagement rings.
Never mined
In the late 1980s, the 137-year-old De Beers company had the diamond world locked down, taking an 80% share of the market, per estimates from industry analyst Paul Zimnisky. However, its grip on the business has slipped since then, with the stone giant's earnings coming under pressure as synthetic alternatives have weighed on diamond prices globally.
Last year, one measure of De Beers' profit (underlying EBITDA) came in at just $0.3 billion, down 88% from the $2.4 billion it posted only two years prior, as lab-grown stones from cheaper competitors in China and India dented the company's finances and overall demand.
In recent years, parent company Anglo American has consistently written down the value of De Beers, reflecting the fact that the storied diamond-miner hasn't shone for some time.
US-based Apple users can now apply for their slice of the company's $95 million Siri spying payout — and could get up to $20 per device if approved.
President Trump will reportedly accept a luxury Boeing 747-8 jet from the Qatari royal family, worth ~$400 million, which could serve as the new Air Force One.
Ferrero, the Italian confectionary giant behind Nutella and Butterfinger, is hoping to win over more Americans by adding peanuts to its hazelnut spread and making, er, Dr Pepper Tic Tacs.
Microsoft and OpenAI are reportedly rewriting their multibillion-dollar deal, with an eye on a potential IPO for the ChatGPT giant down the line.
The bells' toll: Almost 60% of Americans think tariffs will make weddings more expensive going forward, per a new YouGov survey.
Charts from Reuters on how measles is spreading in the US again.
Off the charts: Americans have a lot of debt… But which type has been largely forgotten in the last 5 years, with delinquencies plummeting thanks to government relief? [Answer below].
2 The minimum investment is $1,003.94. Gin & Luck is the parent hospitality group of the cocktail brand Death & Company. This is a paid advertisement for Gin & Luck Inc's Regulation A Offering. Please read the offering circular and related risks at https://invest.deathandcompany.com/.
Note: In the Offering Circular, the terms "Gin & Luck Inc" or "Death & Co," refers to Gin & Luck Inc., a Delaware corporation and its consolidated subsidiaries.
DealMaker Securities LLC, a registered broker-dealer, and member of FINRA | SIPC, located at 105 Maxess Road, Suite 124, Melville, NY 11747, is the Intermediary for this offering and is not an affiliate of or connected with the Issuer. Please check our background on FINRA's BrokerCheck.
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