Pricey Bacon

MARKETS

• Canada: Canadian Prime Minister Justin Trudeau’s position hangs in the balance as the country votes in a general election today. Trudeau’s in a dead heat with Andrew Scheer, the leader of the opposition Conservative Party.
• Earnings: This week, about a quarter of the S&P 500 will reveal their financials for the previous quarter.

ECONOMY

For Global Investors, Life Is a Maze-ing

In trying to navigate today’s zany political climate, investors must feel as though they’ve been blindfolded, dropped into a corn maze, and told the forecast calls for sleet and freezing rain.

Political pickles span almost every continent:

• This weekend, the U.K. government was forced to ask the EU for another Brexit extension.
• Despite a “phase one” agreement, a lasting solution to the U.S.-China trade war seems far away.
• Protests (sometimes violent) have erupted in global cities including Barcelona, Spain, and Santiago, Chile. And of course, Hong Kong.
• A simmering feud between Saudi Arabia and Iran threatens the world’s oil supply.

All this unrest reminds us...

Have you heard the one about economists with too much free time?

They create indexes that measure global uncertainty. Here are the latest readings, per the WSJ:

• One uncertainty index hit its highest level on record in August. Turns out, we’re more uncertain now than after 9/11, the European debt crisis, and Trump’s election in 2016.
• Another uncertainty index that zeroes in on trade policy averaged a level of 2 between 1996 and 2018. This year, it’s close to 100.

Zoom out: The private sector looks to the public sector to inform investment decisions. Without stability, you might get what UBS Chairman Axel Weber has called a “broad-based investment strike” that is “politically made rather than made by markets. And that is a really bad environment.”

That attitude was echoed at the IMF and World Bank meetings in D.C. last week, during which the World Bank’s chief economist pleaded with politicians to get their acts together.

• “Policy is supposed to remove instability, instead it is suppressing old certainties. No one knows what tomorrow will bring.”

Meanwhile, on Wall Street...

The S&P and Dow are around 1% below their all-time highs.

AVIATION

Get These People on a Treadmill ASAP

A Qantas Airways Boeing 787 touched down in Sydney, Australia, Sunday morning after 19 hours and 16 minutes in the air. The 10,100-mile trip from NYC was a test to determine the feasibility of operating ultralong routes as soon as 2022.

Let’s go live to the postgame press conference:

• Capt. Sean Golding: “Overall, we’re really happy with how the flight went and it’s great to have some of the data we need to help assess turning this into a regular service.”
• Bloomberg reporter Angus Whitley: “Personally, I would choose a direct Sydney-New York flight over one with a layover,” but “it won’t suit everyone.”

FOOD

Chick-fil-A Makes Its Brexit

The first Chick-fil-A in the U.K. will be closed on Sundays...and every other day of the week. A mall in Reading, England, has decided not to renew its lease with the restaurant chain over criticism of the owner’s history of opposing gay marriage. The location opened Oct. 10.

A local LGBTQ advocacy group, Reading Pride, led the protests. It posted on Twitter, “The chain’s ethos and moral stance towards #LGBTQ people goes completely against our values, and that of the UK.” What they’re referring to:

• In 2012, now-CEO Dan Cathy said the company believed in the “biblical definition of the family unit.”
• The company’s foundation has also given money to organizations that push anti-LGBTQ policies.

The company said it was “grateful for customer responses to our food” and that the Reading location was part of a longer term international strategy.

Zoom out: Chick-fil-A may not be welcome in parts of the U.K., but it’s the #1 restaurant among U.S. teens, according to a Piper Jaffray survey.

FOOD

Let’s Keep the Meat Theme Going

But instead of chicken let’s talk about pork. Because as Bloomberg reports, it’s getting very expensive.

African swine fever has devastated the hog population in China and elsewhere, causing pork and bacon prices to surge globally.

• China’s swine herd will drop almost 40% from the beginning of 2018 to the end of 2020, per the USDA. Global pork production will decline by 10% in 2020 as a result.
• Pig meat will likely see the biggest jump in price since the health scares around mad cow disease and bird flu in 2004.

Looking ahead...prices will remain elevated in China and some neighboring countries ahead of the Lunar New Year in late January. People eat a lot of pork then.

Before we leave meatland, here’s a Bloomberg snapshot of bacon prices around the world, because...the more you know.

CALENDAR

The Week Ahead

Today is the 60th anniversary of the iconic Guggenheim museum building in NYC, which was recently designated a UNESCO World Heritage Site. Do you know the name of the designer? Answer is at the bottom of the newsletter.

Monday: The MoMa reopens; earnings (TD Ameritrade, SAP)

Tuesday: Existing home sales; NBA season tips off; earnings (McDonald’s, Snap, P&G, Novartis, United Technologies, UPS, Chipotle, Hasbro, Texas Instruments)

Wednesday: Mark Zuckerberg will testify on Capitol Hill about libra; Weird Al turns 60; earnings (PayPal, eBay, Microsoft, Boeing, Ford, Tesla, Caterpillar)

Thursday: Durable goods orders; initial jobless claims; new home sales; World Polio Day; ECB monetary policy decision; earnings (Visa, Amazon, Comcast, Intel, 3M, Celgene, Twitter)

Friday: The American Dream mall opens in New Jersey; World Pasta Day; earnings (Verizon, AB InBev)

WHAT ELSE IS BREWING

• President Trump said the U.S. will not host next year’s G7 summit at his Doral, FL, golf resort.
• A Goldman Sachs investment banker was arrested over allegations of insider trading.
• Kik, a messaging app that was about to shut down, will remain alive after an acquisition by the holding company MediaLab.
• California utility PG&E said it could impose temporary preventive blackouts for as long as 10 years.
• GM could make an electric Hummer, Reuters reports.

BREAKROOM

Choose the Bigger Number: Houston vs. Washington, D.C.

1. Population: Houston // D.C.
2. Median home value: Houston // D.C.
3. Distance to Orlando, FL: Houston // D.C.

Breakroom Answers

2. This one isn’t close, either. The median home value in D.C. is $567,900, while the median home value in Houston is $189,900, per Zillow.

3. Houston is farther from Orlando than D.C. is by just over 100 miles.

Guggenheim Trivia
Frank Lloyd Wright