A news summary, focused on 10 big employers; updated 5:21 p.m.
The Dow Jones Industrial Average cratered 3.3% this afternoon, tumbling 589 points and wiping out its year-to-date gains as fears gripped markets with Britain’s stunning vote to leave the E.U. The broader S&P 500 tumbled 3% and the Nasdaq slumped 3.8%. Latest news.
All 10 big-employer stocks tracked by Boulevard fell sharply:
- Amazon: down 3.2% to $698.76
- Brown-Forman: class A, 3.4% to $101.65, and B shares, 3.4% to $94.60
- Ford: 6.6% to $12.52
- GE: 3.8% to $30.01
- Humana: 1.7% to $184.05
- Kindred: 3.9% to $11.14
- Papa John’s: 1% to $67.05
- Texas Roadhouse: 1.9% to $45.68
- UPS: 2.5% to $104.51
- Yum: 4.2% to $82.33
To fully appreciate the magnitude of the losses, consider Kentucky’s richest family, the Browns of Brown-Forman. They saw $201 million of their more than $6 billion in paper wealth evaporate in a matter of hours.
The impact of last night’s stunning Brexit news for Louisville employers will be greatest for those with extensive overseas footprints and currency exposure.
They include Brown-Forman, which sells 15 brands such as Jack Daniel’s in 160 countries worldwide. The U.K. is the company’s second-biggest market, accounting for 10% of fiscal 2016 sales, according to Brown-Forman’s annual report. Europe, excluding the U.K., was 21%. The U.S. is No. 1, with 46%. The company says foreign markets are increasingly important: “In fiscal 2016, we generated 54% of our net sales outside the United States compared to 41% 10 years ago.”
Other companies likely taking post-Brexit hits include Papa John’s, which operates in 39 countries; Yum in 130 countries and now reshaping overseas operations with a planned China spinoff in October; Ford, which is already reworking its European sales strategy, and Amazon, a relative newcomer abroad.
Boulevard’s Stock Portfolio companies routinely warn investors about risks of doing business outside the U.S. Papa John’s, for one, noted in its annual report that “international operations could be negatively impacted by changes in international economic, political, security or health conditions in the countries in which the company or our franchisees operate.”
Yum’s 14,600-unit KFC Division bears the biggest overseas exposure; it’s in 120 countries, with more than a third — 5,003 restaurants — in China.
“Our business,” Yum says in its annual report, “is increasingly exposed to risks inherent in international operations. These risks, which can vary substantially by country, include political instability, corruption, social and ethnic unrest, changes in economic conditions . . . as well as changes in the laws and policies that govern foreign investment in countries where our restaurants are operated.”
Also, Yum warns, “results of operations and the value of our foreign assets are affected by fluctuations in currency exchange rates, which may adversely affect reported earnings.”
Boulevard’s Big 10 companies employ 63,000 workers in the Louisville area, and nearly 2 million worldwide.
In non-Brexit news; updated 5:38 p.m.: Continue reading “DOW PLUNGES 589 POINTS IN GLOBAL ROUT, AS INVESTORS REEL FROM BREXIT VOTE; FORD DIVES 7%; YUM, OTHER LOUISVILLE STOCKS SLAMMED”
Federal Election Commission reports for the month of May continue to show a shift of support among some gubernatorial appointees and others to the Republican Party, now that it controls the governor’s office, according to The Courier-Journal.
Brown-Forman itself also filed a 39-page FEC report for May, showing it had $192,000 in the bank for its Nonpartisan Committee for Responsible Government PAC.
Related: Brown-Forman’s history and Louisville presence.
Boulevard reviews the latest media coverage of the Oscar-winning Louisville native in our exclusive Jennifer Lawrence Diary™. Today’s news, rated on a scale of 1-5 stars:
Legendary Pictures emerged victorious last night, landing the pitch package “Bad Blood,” with Lawrence starring as Elizabeth Holmes, the disgraced founder of controversial Silicon Valley blood-test company Theranos, according to Deadline.
Legendary will pay around $3.5 million for the script to be written by director Adam McKay, who just shared a Best Adapted Screenplay Oscar for “The Big Short.” McKay will direct as well. Universal will distribute through its deal with Legendary, according to Deadline.
The trade site had reported earlier that the project featured all the requisites for the big packages studios are responding to right now, including a hot-button subject matter and Oscar winner Lawrence, 25, who’s found herself in the Academy Awards mix on prestige projects, most recently another film about an entrepreneur ‘Joy.’”
The mania around the latest movie cements Lawrence’s status as one of Hollywood’s most bankable stars — and highest paid, too: a reported $20 million per film.
The “Hunger Games” series star pulled in $52 million between June 2014 and June 2015 alone, ranking her No. 34 of 95 on Forbes’ magazine’s latest list of the world’s highest-paid celebrities. No. 1: professional boxer Floyd Mayweather, at $300 million.
“Bad Blood” is Lawrence’s fourth project in the works. She’s now filming an untitled Darren Aronofsky project; “Passengers” is in post-production with a Dec. 21 release date, and “It’s What I Do” is in pre-production. There’s also been speculation she might star opposite Sandra Bullock in an all-female reboot of “Ocean’s Eleven.”