What’s up, dough? I’m Ryan Grace, it’s October 4th 2019 and this is The 3Cap. Today we’re talking about Square offering its services to CBD retailers, a consumer staples star and a 50 year low for unemployment. Square is opening its platform of merchant services and digital payments to businesses that sell CBD in the US. If you’re not into weed, CBD is a non-psychoactive compound that’s found in cannabis and people use it for its purported health benefits. It’s illegal in some states but it was legalized at the federal level last year with the passage of the 2018 Farm Bill. According to BDS Analytics, sales of CBD at dispensaries are growing at a faster rate than overall sales of dispensaries and they think the market could hit 20 billion dollars in revenue over the next five years. If this happens Square is positioning itself to offer CBD merchants payroll and inventory management services while charging around 4% for both in-person and online transactions. Square is up about 5% since the start of the year. And you can find it in dough’s Payments Selection. Pepsi has been one of the highlights in the consumer staples sector this year. The sector ETF, XLP is up over 19% year to date but Pepsi has outperformed it returning over 22% during the same period. Pepsi also had earnings earlier this week and reported that again it beat estimates which its done every quarter for the past five years, while its yearly sales are on track to grow by over 4%. Pepsi is seeing strong growth due to its increased spending on advertising and demand for its lineup of healthy snacks from its brands like Bare and Off the Eaten
Path. Sales of its carbonated water brand Bubly are also picking up. Bubly is a competitor to La Croix in the sparkling-water category. Pepsi thinks it’ll be one of its next billion dollar brands. If you want to trade Pepsi or add it to your favorites, the symbol is PEP and it also has a dividend yield of 2.7%. The jobs report was released this morning and it showed the US added 136k jobs in the month of September. While this was below the consensus forecast of 145k jobs added, the unemployment rate in the U.S. has dropped even further to 3.5% which is the lowest level since December 1969. Additionally average hourly earnings which is the change in how much people are getting paid compared to the year before came in at 2.9%, which was lower than the 3.2% analysts estimated. Wage growth is important to the economy. If people have more money, they tend to buy more stuff and this can help drive economic growth as a result. So it was a mixed report. The unemployment rate dropped but the number of jobs added in growth in wages was lower than some expected. That’s it, I’m Ryan Grace and that’s a 3Cap, check back again to stay on
top of what’s going on in the market.