Welcome to Bespoke Brunch Reads — a linkfest of the favorite things we read over the past week. The links are mostly market related, but there are some other interesting subjects covered as well. We hope you enjoy the food for thought as a supplement to the research we provide you during the week.

Labor Markets

Stigma of Criminal Record Fades as U.S. Employers Get Desperate by Steve Matthews (Bloomberg)

As the supply of available workers declines, employers are increasingly willing to give a shot to Americans with a criminal record or the formerly incarcerated. [Link]

Wall Street’s Endangered Species: The College Jock by Justin Baer (WSJ)

A pedigree that included college athletics used to be a ticket to a job in finance, but as the industry has become increasingly quantitative other skill sets are replacing former college athletes. [Link; paywall]

Thanks for Your Job Application—Shall We Begin at the Squat Rack? by Christina Rexrode and Serene Ng (WSJ)

We’re not clear that requiring a workout as an interview venue is entirely legal, but that doesn’t mean it isn’t happening as fitness-oriented companies seek good fits. [Link; paywall]

Will Robots Take My Job

Pretty self-explanatory: type your job, see if the alleged rise of the machines puts you in danger. [Link]

Discovery

Has science cracked the peanut allergy? by David Crow (FT)

Clinical testing is in the final stages for drugs that could help treat peanut allergies. [Link; soft paywall]

6 reasons why scientists are so excited about gravitational waves by Brian Resnick (Vox)

You may not have felt it, but back in January a tiny ripple in space time passed through Earth on its multi-billion year journey. [Link]

Investors

Steven Cohen’s Hedge-Fund Comeback Shoots for a Record Target: $20 Billion by Rob Copeland (WSJ)

With the end of Cohen’s ban from the securities industry looming, he’s targeting a massive hedge fund launch that would be made up mostly of his own 10 figure family fortune. [Link; paywall]

An Amazon engineer is letting thousands of Twitch users play the stock market with $50,000 of his own money by Matt Weinberger (Business Insider)

In a unique experiment, it’s now possible to vote on what happens next in a modestly sized portfolio of stocks owned by a brave Amazon engineer. [Link]

College

The Disinvestment hypothesis: Don’t blame state budget cuts for rising tuition at public universities by Jason Dellsle (Brookings)

There’s lots of debate over whether increasing student subsidies increases tuition, but not much debate over whether lower per student appropriations raise it. There should be. [Link]

Fashion

The Botmakers Who Rule The Obsessive World Of Streetwear (Wired)

A fascinating dive into the exclusive world of Supreme, a brand we’d never heard of until this article, that inspires an arms race of bots used to purchase its merchandise online. [Link]

How Paul Newman’s Legendary Rolex Cosmograph Daytona Was Found—and Where It’s Going Now by Michael Clerizo (WSJ)

The story of the race car driver’s watch, passed down to his daughter’s partner and now going up for auction. [Link; paywall]

Retail

Wal-Mart employees can now deliver your online orders on their way home from work by Courtney Regan (CNBC)

Headed home for your shift? Might as well drop something off on the way. So goes the thinking from the nation’s largest retailer. [Link; auto-playing video]

Best Buy And Retail’s Long Road Back By Kevin O’Marah (Forbes)

A case study on why Best Buy has been able to flourish despite a brutal brick-and-mortar environment. [Link]

Bleecker Street’s Swerve From Luxe Shops to Vacant Stores by Steven Kurutz (NYT)

The story of New York’s most unlikely retail district, from Sex and the City fame to insane rents that make it impossible for even the strongest brands to have a profitable presence. [Link; soft paywall]

Europe

EU presses plan to bundle debt of eurozone countries by Jim Brunsden and Guy Chazan (FT)

As the Eurozone has become more friendly to integration with the departure of the UK from the EU and the election of Macron in France, an official proposal on combining debt across countries has been offered. [Link; soft paywall]

After Brexit: the UK will need to renegotiate at least 759 treaties by Paul McClean (FT)

One of the most overlooked areas of the Brexit process is the fact that the UK will no longer be a part of mutually negotiated treaties entered into as an EU member. [Link; soft paywall]

Emerging Markets

EM sovereigns: Buy defaultlessness by Gabriel Sterne (FTAV)

Changes in the composition of dollar versus local currency debt burdens in EM creates new incentives in the event of default. [Link; registration required]

Investing In Asia

Fretting over savings, Mrs Watanabe turns to bitcoin by Minami Funakoshi and Joyce Lee (Reuters)

On the exploding popularity of bitcoin as a trading vehicle in Japan, Korea, and other Asian financial markets. [Link]

‘Ghost collateral’ haunts loans across China’s debt-laden banking system by Engen Tham (Reuters)

Loans “secured” by hard assets like metals stockpiles may be held up only by collective faith. [Link]

Real Estate

The Housing Market Is Ripe for Tech Disruption by Barry Ritholtz (Blooomberg)

An outline of where tech may be able to step in and simplify the process of buying a home. [Link]

Lunch

Going Out for Lunch Is a Dying Tradition by Julie Jargon (WSJ)

As workers feel more and more urgency to be at the keyboard for the whole day, lunch at the desk has displaced sit-down mid-day meals to an increasing degree. [Link; paywall]

Have a great Sunday!

The two most widely followed gun makers are Sturm Ruger (RGR) and American Outdoor Brands (AOBC), which was formerly Smith & Wesson.  Through much of President Obama’s two terms, these stocks went gang-busters.  Anytime there was talk about limiting or outlawing gun ownership, a certain percentage of Americans would rush out and buy more of them.  Investors realized this as well, and the stocks were bid higher.

Leading up to the 2016 Presidential Election, both RGR and AOBC were rallying because the stock market was giving Clinton a much higher chance of victory than Trump.  When Trump shocked the world and won on November 8th, the gun-makers tanked the following day.  With the GOP guaranteed to hold the White House for the next four years, investors quickly realized there would be no Second Amendment threats for the foreseeable future.  You can see the sharp drops following the 2016 Election in the charts of RGR and AOBC below.

In the first few months following last year’s Election, RGR and AOBC continued to trend lower.  At their lows in early March, RGR was down 25%, and AOBC was down 35%.

We’re highlighting the two names today because recently they’ve been on a tear.  AOBC has rallied 30% off its lows, while RGR has rallied 38% and just this week moved above where it was trading prior to the Election.

Over the last few weeks there have been a lot of data points highlighting the “Trump fade,” where asset classes that moved sharply higher immediately following the Election have given it all back.  In the case of the gun-makers, it’s the same story only in the opposite direction.

Below is a chart of the S&P 500’s price versus its trailing 12-month P/E ratio.  As you can see, up until the March 1st high for the S&P, its P/E ratio was trending right along with it.  Since then, however, we’ve seen P/E contraction, even though the index has gone on to make a new high.  This means that earnings (the E in P/E) have outpaced price (the P in P/E) over the last couple of months.  That’s a good thing, especially for anyone who was worried about valuations.