Canceled

MARKETS

• Shutdown: Big news. President Trump is expected to sign a spending bill to avoid a government shutdown and declare a national emergency to fund a border wall.
• U.S. markets: Some unsettling economic data (more on that soon) spooked the stock market—and snapped the S&P’s four-day winning streak.

HQ2

First Porzingis, Now Amazon?

The company said it will not be building a large headquarters in NYC as originally planned, adding the biggest twist of all to the marathon HQ2 search that began in 2017.

Still unclear: Whether Amazon’s 30-day return policy applies to $2.5 billion corporate campuses.

Why Bezos backed down

• “For Amazon, the commitment to build a new headquarters requires positive, collaborative relationships with state and local elected officials who will be supportive over the long-term.”
• “While polls show that 70% of New Yorkers support our plans and investment, a number of state and local politicians have made it clear that they oppose our presence...”

Let’s talk about the (now overjoyed) opposition

That Amazon (-1.06%), one of the largest public companies in the world, had been promised roughly $3 billion in government incentives didn’t sit too well with many activists and local leaders in NYC.

They criticized the lack of transparency in the search process and highlighted the potentially disruptive effects the massive new campus would have on the local community. In the end, Amazon didn't want to fight this battle.

This is a mess...

• ...for stakeholders (like prominent New York politicians and real estate professionals) eagerly anticipating the more than 25,000 high-paying jobs and $27.5 billion in tax revenue Amazon was expected to generate.
• ...and for Amazon, which thought it could bully any U.S. city into submission. Urban studies expert Richard Florida called it a “site selection disaster of epic proportions.”

Looking ahead: Amazon said it’s going to double down on its new locations in Northern Virginia (the big one) and Nashville (the smaller one), while growing its other existing locations around the country.

Zoom out: As Amazon became the target of an angry grassroots movement over the past year, fellow tech giants Google and Apple quietly announced their own (more modest) U.S. expansions to positive press. Amazon might want to take notes.

CRYPTO

Must Be Something in the Water

JPMorgan (-0.61%) CEO Jamie Dimon took a page from the Bezos playbook and fell in love with an alive girl changed his mind in a very public way.

After deriding bitcoin as a “fraud” back in 2017, Dimon’s JPMorgan will now become the first major U.S. bank to introduce its own cryptocurrency for real-life use, CNBC scooped.

The coin—dubbed JPM Coin (because Bananacoin was taken)—will represent $1 in value and begin testing “in a few months.”

Its aim? Settling “a tiny fraction” of transactions for corporate clients of JPMorgan’s wholesale payments business (through which JPMorgan moves a total of $5 trillion or more each day).

• Tell your cryptomaniac roommate to keep her day job, though. Unlike bitcoin, JPM Coin will only be available for JPMorgan’s big institutional clients.

Zoom out: JPM Coin is proof Dimon meant it when he said bitcoin was for the birds but its underlying blockchain tech had legs. Now, the precedent is set for the institutional crypto wave.

RETAIL

For Retail, a Bad Date? Or Bad Data?

Terrible trends have a way of creeping back into our lives—bucket hats, fanny packs, and dismal retail sales, to name a few.

That last one is arguably the most concerning. Month-over-month retail sales unexpectedly tanked the most since 2009 in December.

• Retail sales fell 1.2% during the key holiday season...but economists were expecting a 0.1% gain.
• The report (which was delayed several weeks thanks to the government shutdown) also raises concerns about what upcoming (and also-delayed) fourth-quarter GDP growth data might look like.

Alright, on to the next story.

And now...the post-credits scene: Some experts have suggested that these numbers can’t be trusted.

The report was “much weaker than expected, but so much so that the data lose credibility,” said High Frequency Economics.

And other experts suggested the shutdown itself could have sullied the Commerce Department’s data collection, leaving us with some “seriously out of whack” stats.

Wait, is that Nick Fury without an eye patch?

AVIATION

Saying Goodbye to a Superjumbo

We’d give it a bear hug but...it weighs over 1.2 million lbs and, with a cruising speed of Mach 0.85, it’s quite elusive.

Airbus said it will stop producing the A380 following a cut in orders from Emirates, the plane's biggest customer. It joins the list of things that seem cool but don’t make much business sense, like Segways and the Fyre Festival.

A little background:

• After delays and cost overruns, the A380 entered service in 2007 with ambitions of shuttling close to 600 passengers between major hubs.
• It's pretty luxurious. (We flew economy from JFK --> Dubai in an A380...the cabin was roomier than an NYC apartment.)

But the industry changed

And the A380 got left in the contrails by smaller jets that were a) easier to fill and b) able to sidestep larger cities for more regional destinations.

Zoom out: No one was particularly surprised by the decision, as Airbus execs had been preparing the move for a year. Now, the company wants to focus on its more popular jets to capitalize on the growing number of air passengers (expected to increase 6% in 2019).

QUIZ

I Quiz Therefore I Am

Less in debt than the U.S. government. More knowledgeable about Mars than Opportunity. Will eventually dominate the Metaverse. It’s the Brew’s weekly news quiz.

1. A new battle royale video game from EA hit 25 million registered players in a week. What is it called?

2. Last weekend, the U.K. government canceled a contract with a ferry company that had what unique quality?

3. The FDA announced the broadest dietary supplements policy modernization in decades. That industry was doing $4 billion in sales in 1994...what about now?

4. Which of the following startups is not on CB Insights/NYT’s 50 future unicorns list?

1. Grow Mobility—Dockless bikes and scooter
2. Tudder—Tinder for cows
3. Farmers Business Network—An online platform for farmers to share and analyze data, buy supplies, and sell crops
4. Zola—Online wedding registries and wedding planning tools

5. Fill in the blank: Last year, 8 million people used their phones to _______.

Answers: 1) “Apex Legends” 2) It had no ferries 3) $50 billion 4) Tudder wasn’t on the list, but it does exist 5) File tax returns on the TurboTax app

WHAT ELSE IS BREWING

• General Electric (-3.18%) said it will downsize its new HQ in Boston and reimburse Massachusetts for nearly $90 million in incentives. Seems like the right
• Coca-Cola shares fell nearly 8.5%, their worst day in over 10 years. The outlook for 2019 looks grim, with currency pressures and other macro factors hurting sales growth.
• Payless ShoeSource is reportedly planning to close all 2,300 of its stores when it files for bankruptcy later this month, per Reuters.
• Nvidia (+8.07% after hours) turned a crypto-fueled, year-end roller coaster into an earnings and revenue beat for last quarter.

BREAKROOM

Friday Puzzle
How many words can you find in the grid below? Each word must contain the central V and no letter can be used twice, but the letters do not have to be connected. Proper nouns are not allowed, however, plurals are. There is at least one nine letter word.

O E R
D V B
R A O

How you can rate yourself...Genius: 28 words. Excellent: 20 words. Good: 16 words. Average: 12 words.

Breakroom Answers

Friday Puzzle
Above, adverb, ave, aver, brave, braved, braver, bravo, bravoed, deva, dove, drove, drover, ova, over, overboard, overbroad, overdo, rave, raved, raver, rev, rove, roved, rover, var, verb, voe.