️ Suit up

MARKETS

• U.S. economy: Retail sales dropped in September for the first time in seven months. All of a sudden, manufacturing isn't the only sector flashing warning signs.

AUTO

GM Strike Might Soon-ish Likely Be Sort of Over

Yesterday, the United Auto Workers (UAW) said it reached a proposed tentative agreement with GM to end the monthlong strike that's shut down over 30 U.S. factories.

If that sounds like a hedged statement, we don't entirely disagree with you, for the most part.

What it means: The conflict isn't all wrapped up with a bow, but it might be in the next couple of weeks.

• The strike will continue at least until union leaders vote in support of the proposal—which they may do at a meeting today in Detroit.
• If it passes muster, the leaders will send it to all 46,000 UAW-represented GM employees for ratification.

What it means for workers: We don't have details on the agreement yet. But the Detroit Free Press reports a) workers' health care costs won't increase thanks to an earlier GM concession and b) workers will get bonuses of more than $9,000 once the deal is approved.

• Previously floated proposals have included plans for GM to invest at least $7–$7.7 billion in manufacturing operations and add thousands of hourly union jobs.

What it means for GM: A potential tourniquet on a gushing wound.

• Analysts put strike-related costs at about $1.5 billion.
• Shares have dropped about 5% since the strike began.

Zoom out: The strike's effects have rippled beyond GM and even the auto sector. About 575,000 workers are in industries directly or indirectly affected, from GM suppliers to local businesses that are usually GM union workers' favorite haunts.

• Plus, all those people going without taxable income for a month adds up to about $222 million in lost tax revenue.

Looking ahead: The UAW also represents Ford and Fiat Chrysler workers. It plans to bring the contract template hammered out with GM to the other Two of the Big Three.

CANNABIS

It’s Been...One Year of Legalized Weed

Today, we mark 365 days since Canada became the first major economy to legalize recreational cannabis. The jokes have been plentiful, but the profits...not as dank.

Pot stocks have tanked. In the last year, shares of what were in Oct. 2018 the top 10 Canadian cannabis producers have averaged negative returns north of 57%. Six of the top 10 have parted with at least half their value.

Legal prices can’t compete with those in the black market. Legal weed prices fell 3.9% in Q3, but that’s the first drop since legalization and still nearly double the illicit market’s going rate. A survey found 42% of Candian pot consumers got at least some of their supply from an illegal source in Q2.

Sales have sputtered. In June 2018, Deloitte predicted legal sales would climb to C$4.3 billion in 2019. In the first seven months of the year, Canadians only bought C$524 million of legal weed, half of which was Seth Rogen alone.

Positive spin: Cannabis has still contributed $8.3 billion to Canada’s economy. And soon, higher-margin products like edibles and topicals will be legal.

CYBERSECURITY

Charm City Takes Cover

Baltimore officials have approved plans to buy $20 million in cyber insurance coverage for the city, because the only thing better than Old Bay on cottage cheese is avoiding another multimillion-dollar cyber attack.

The details: Baltimore opted into a pair of $10 million policies from Chubb Insurance and AXA XL Insurance that’ll together cost the city $835,000 in annual premiums. That’s $835,000 for incident response coverage, business interruption loss, ransom payments, and peace of mind.

The background: In May, hackers froze thousands of city computers and demanded roughly $76,000 in bitcoin as ransom.

• But Cal Ripken Jr. didn't play 2,632 straight games to give in to cybercriminals. The city opted not to pay the ransom, because doing so might encourage more cyberattacks.
• In total, the attack cost the city at least $18 million.

The big picture: Municipal computer systems have become popular targets for hackers. And last week, Chubb reported ransomware attacks jumped 84% annually last year. But...according to ProPublica, insurers actually prefer to pay ransoms, because satisfied hackers → more cyberattacks → higher demand for insurance.

SPACE APPAREL

A Suit for When You Just Need Some Space

Dinner with parents? Button-down, no tie. Work holiday party? Business casual. $250,000 space flight? One of these ensembles.
Yesterday, Virgin Galactic launched a launchwear line—a collection of high-tech spacesuits created jointly with Under Armour.

• Bargain hunters, rejoice: They’ll be included in the cost of a space trip once Virgin Galactic’s tours of the atmosphere officially begin.
• Virgin Galactic consulted with astronaut trainers, pilots, doctors, stylists, and candlestick makers to design the “spacewear.”

Looking ahead: CEO George Whitesides has said the space trips could get going in the spring of next year.

BOOK REC

Ray Dalio's Got Principles

Founder of the biggest hedge fund in existence. 66th richest person in the world. Mastermind behind the chicken nugget. Deep sea explorer. And...workplace guru?

After nearly 45 years in the biz, Ray Dalio should be kicking back on a private island in the Caymans. But how could he when there are thousands of businesses and millions of workers in need of a little more...radical transparency?

You might remember last week's Pumpkin Spice author Adam Grant touting Dalio's company, Bridgewater Associates, for a culture where everyone is not just encouraged, but expected to voice ideas and challenge status quos.

Dalio wants to help you follow his lead. He recently sat down with the Brew to discuss Principles (his one-part memoir, one-part business philosophy treatise), why he believes you should create your own principles to live and work by, and the tools he can offer to help you get there. Plus, an update on his deep sea exploits and favorite Burning Man memories.

WHAT ELSE IS BREWING

• Netflix stock shot up more than 8% after hours following its Q3 earnings report. The tl;dr: The company beat on earnings, missed on U.S. subscriber adds, and looks forward to battling new competitors.
• The FCC reportedly formally approved the proposed T-Mobile/Sprint merger yesterday.
• Jury selection began in Ohio for the first federal trial over the opioid epidemic.
• U.S. and South Korean authorities announced they have broken up one of the world’s biggest child pornography markets.
• Shonda Rhimes's production company has signed a three-year podcast deal with iHeartMedia.
• SoftBank is reportedly prepping a roughly $5 billion financial rescue package for its least favorite child, WeWork.

BREAKROOM

Guess the Stock Chart
Hint: A Canadian e-commerce company that's expected to pass eBay in U.S. merchant sales volume.

Breakroom Answers