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Hi John, here's what you need to know for November 7th in 2:58 minutes.

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• SoftBank reported WeWork-hit quarterly results, with the Japanese conglomerate announcing its biggest loss in 14 years
• Carmaker BMW reported rising sales in the third quarter, but still expects its 2019 profit to shrink overall

Arigatō, But No Arigatō

What’s Going On Here?

On Wednesday, Japanese conglomerate SoftBank reported third-quarter results which revealed the company’s first quarterly loss in 14 years. And we already know who’s to blame…

What Does This Mean?

SoftBank has poured over $10 billion into co-working space company WeWork – both directly and via the $100 billion Vision Fund, its venture capital investment subsidiary. But after SoftBank bailed out WeWork following a highly publicized fall from grace – in which its valuation shrank from $47 billion in January to just $8 billion last quarter – the value of the company was reduced by $4.6 billion on SoftBank’s books, leading to a major accounting loss. Adding insult to injury – and losses to its bottom line – some of SoftBank’s other investments also did poorly during the quarter: Uber, Slack, and Guardant Health’s stocks all lost roughly a third of their value.

Why Should I Care?

For markets: A little bit of both.
At its core, SoftBank is a “defensive” telecom company, meaning its earnings should be pretty stable and predictable. But loss-making companies such as Uber and Slack are “cyclical”: they have less predictable earnings that ebb and flow with the economic tide, making SoftBank – which has bet big on these companies – a riskier choice for investors than a traditional telecom company (tweet this).

The bigger picture: A brave new world dot com.
SoftBank is, erm, banking on both the digitization of the new economy and – like several others in industries from healthcare to banks – on growth outside Japan. That might work out in the long run, but it can expect a bumpy road for now. Whether investors are prepared to sign up for that journey and back another $100 billion Vision Fund remains to be seen: Saudi Arabia and Abu Dhabi, the current Vision Fund’s two major investors, seem reluctant to commit to another round in the wake of the WeWork turmoil.

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The Inadequate Driving Machine

What’s Going On Here?

German car manufacturer BMW may have reported rising third-quarter sales on Wednesday, but the carmaker hasn’t exactly lived up to its ultimate reputation: it’s expecting a “significant decrease” in its profit for 2019 as a whole.

What Does This Mean?

After a series of setbacks earlier this year – both operational and regulatory – BMW reported an 8% increase in sales and an 11% jump in third-quarter profit versus a year ago. But profit for the year is down 37% so far, and between Brexit uncertainty, trade war tensions, and a global economic slowdown, the carmaker isn’t expecting any miracles this quarter either. Adding pressure to profitability is BMW’s need – whether due to regulation or competition – to invest big in electric vehicles, automated driving, and more. That might explain the $13 billion cost-cutting program it’s moving forward with, then…

Why Should I Care?

The bigger picture: Things are looking up.
With German carmakers like BMW struggling, it’s little wonder eurozone manufacturing activity is hovering near a seven-year low. But data released on Wednesday offers a glimmer of hope: it showed signs of life for German manufacturing, which has been the biggest contributor to the slump in the bloc’s activity. The data showed a rebound in German factory orders, with demand rising 1.3% in September – far exceeding estimates of a 0.1% gain.

Zooming out: Everyone has to leave home sometimes.
German sportswear brand Adidas also reported earnings on Wednesday, beating growth estimates for both sales and profits. The company makes more than 70% of its sales outside Europe, so it’s less exposed to the region’s weakening economy. Sales have been rising in North America, Asia Pacific, and emerging markets – and now that European sales have joined the party, growing last quarter, perhaps it’s time to start looking at the region more optimistically.

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