Lol Brexit

MARKETS

• Government shutdown: Bipartisan talks to reach a deal on the border wall aren’t going too well, according to multiple outlets. The deadline to avoid another shutdown is this Friday, but the realistic deadline is much earlier.
• China: Markets are reopening following the Lunar New Year holiday. Will the celebratory mood stick around?

CONSUMER

The Art of Consumer Goods

Look, we’re not about to go all Bob Ross on you. But no matter how you paint it, the consumer goods space is bracing for more than just “happy little accidents.”

Why? Expectations of sputtering growth, concerns about earnings, and falling consumer confidence have flashed bright red warning lights for investors, and now consumer goods companies are feeling the pinch. Then toss in a trade war? Not great.

Let’s paint by numbers (Okay, we’re going a little Bob Ross.)

• Analysts now expect Q4 earnings growth of 14.7% for the S&P 500’s consumer discretionary index...down from the 17.8% estimated in October.
• As for Q1, experts predict consumer discretionary earnings will fall 1.7%, compared to forecasts of 6% growth in October.

Confidence is key

And we’re all feeling like the new kid on the first day of high school. U.S. consumer confidence fell to a 1.5-year low last month thanks in part to the partial government shutdown and market turbulence.

Esplanade Capital told Reuters that while the “consumer remains generally robust, most people have had something in their life in the past few months that has given them pause.”

• Whether that’s watching the stock market fall 15% or shutdown-induced uncertainty or financing your superyacht, it’s been a wear on consumer goods firms that rely on you to splurge on Crest 3D White instead of generic toothpaste.

Now, some of them—from Clorox to P&G—are raising prices to combat higher costs and generic toothpaste buyers (for P&G, at least, it seems to be working).

Looking ahead: We’re still in the thick of earnings season for consumer companies. Results from the likes of Coca-Cola, Walmart, Macy’s, and more will offer some much-needed insight as to how long these happy little accidents will keep popping up.

MEDIA

Les Moonves Plots His Next Move

Just a few months after being ousted at CBS following multiple accusations of sexual misconduct, the longtime exec appears to be back in show business.

His new venture is known as Moon Rise and consists of Moon Rise Unlimited, Moon Rise Technologies, and Moon Rise Productions, according to a filing. Aside from that info, all we know is that he’s set up shop in 9000 Sunset Boulevard, a highly visible office tower in West Hollywood.

Oh, and one more thing: CBS is probably paying for it
Per Moonves’s exit agreement, the company said it would pay “office services” for Moonves for at least one year. What hasn’t been sorted out yet is Moonves’s $120 million severance package. CBS is refusing to pay, but he’s mounting a legal challenge.

You can’t make this stuff up: NYT reporters went looking for Moonves, but a security guard at the building told them, “We don’t have a directory because our tenants don’t want people to know they are here.”

WORKFORCE

Finland's so Basic

The Finnish government released the results of a two-year basic income trial on Friday:

• It didn’t make recipients more likely to work, as many of the program’s supporters had hoped.
• But here’s the thing: The trial did make people happier...and that’s in a country already rated the world’s happiest by the UN last year. Basically, if you're not actively laughing you're assumed to have just lost your house in an asteroid collision.

The basic income experiment was part of Finland’s search for alternatives to its social security model. Roughly 2,000 unemployed Finns were chosen randomly to receive regular monthly paychecks from the government—which didn’t slash those payouts even if recipients found work.

Other governments were watching. If basic income could encourage the unemployed to take low-paying jobs without fear of losing benefits, states could hypothetically slash welfare costs.

• The takeaway? “Seems to have been minor on the grounds of the first trial year,” Finland’s minister of health and social affairs said.

If you’re reading, Finnish government, we’ll gladly volunteer as tribute for the next study. You know...for science.

INTERNATIONAL

Lol Brexit

After an Irish backer withdrew its support, the UK government has scrapped an $18 million contract with a ferry company that—get this—has no ferries.

Seaborne Freight was tapped in December to shuttle supplies between England and Belgium in the event of a “no-deal Brexit,” which many companies fear could royally screw up the flow of goods and people between the EU and Britain.

But there were some red flags from the start of the Seaborne agreement:

• “Criticism of the deal increased when it was discovered that part of Seaborne’s website appeared to have been copied from a food delivery firm,” the AP writes.
• Seaborne’s CEO previously ran a business that was liquidated with unpaid tax bills, plus two other Seaborne board members were directors at a company that went into liquidation.

The government said it “carefully vetted” Seaborne. After all, you’d think a company with that much expertise in liquids should be able to run a nautical business.

Alas, that’s flawed logic—and Transport Secretary Chris Grayling is getting raked over the coals for brokering the ill-fated deal.

CALENDAR

The Week Ahead

It's a best practice not to flirt with our readers, but like...if you’re free Thursday night hit us up.

Monday: Factory orders; earnings (Restaurant Brands International, Loews); the 143rd Westminster Kennel Club Dog Show opens; swipe on Tinder

Tuesday: Jolts; earnings (Under Armour, Activision Blizzard, Nissan, Molson Coors, Groupon, HubSpot); swipe on Bumble

Wednesday: CPI inflation data; earnings (Teva, Cisco, Yelp, MGM); swipe on Hinge

Thursday: Valentine’s Day; retail sales; earnings (Coca-Cola, Nvidia, CME Group, Yeti, Waste Management)

Friday: Government shutdown deadline; industrial production; Munich Security Conference begins; earnings (PepsiCo, Deere & Company)

WHAT ELSE IS BREWING

• A Saudi minister said the kingdom has “absolutely nothing to do” with the AMI-Jeff Bezos dispute.
• The 2019 Grammy Awards, as it happened.
• Google’s main policy chief, Karan Bhatia, called for “common rules of the road” in regulation of big
• The U.S. is in the throes of its biggest wage gap since Gatsby—wealth inequality currently stands at a level not seen since the 1920s, per one Berkeley economist.
• “The Lego Movie 2” came in No. 1 at the box office this weekend, but its haul ($35 million) was disappointing.

BREAKROOM

Guess the Stock Chart

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