Thanksgiving dinner > Chili’s

MARKETS

  • U.S. markets: The S&P snapped its five-day losing streak thanks to major gains from JPMorgan and Apple. What else turned this slumping market around?
  • Trade: The U.S. and China appear to be ramping up efforts to figure out a trade agreement. U.S. Trade Representative Robert Lighthizer reportedly told some execs the next round of China tariffs is on hold, although his office denies it.
  • Brexit: Two important UK ministers resigned, the pound fell, and the situation once again seems uncertain. But draft agreement in hand, Prime Minister Theresa May is fighting on.

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E-CIGARETTE

Words Used to Describe the FDA’s Anti-Smoking Crackdown

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"Sweeping."

"Surprising."

"Multipronged."

"Sweeping" again...and again...(this one was pretty popular).

So what was sweeping, surprising, and multipronged about yesterday's announcement?

Sweeping

The FDA is curbing sales of most flavored e-cigarettes so that they can only be sold in retail stores that a) already prohibit entry for people under the age of 18 or b) have a section of the store that doesn't allow minors in. That'll essentially ban most flavored e-cig products from convenience stores/gas stations.

The reason, per FDA Commissioner Scott Gottlieb: "I will not allow a generation of children to become addicted to nicotine through e-cigarettes."

And the FDA unleashed new data to highlight the problem:

  • Vaping among high schoolers jumped 78% from last year.
  • In middle school, the increase was 48%.

Surprising

The FDA action on flavored e-cigs wasn't as strict as earlier reports seemed to indicate (i.e. an all-out ban in retail stores). And it's not that clear what establishing a separate "section" of a store means in practice. Commissioner Gottlieb did say, "It needs to be a complete separate structure. A curtain won't cut it."

Multipronged

The FDA isn't just targeting underage Juul-ers. It's also proposing a ban on menthol cigarettes and other flavored cigars.

It's a longer-term play: Any ban on menthols probably won't go into effect for at least several years, and could face legal challenges.

Here's why a menthol ban is significant:

  • Scale: Menthols account for ~35% of U.S. cigarette sales.
  • It matters to Big Tobacco: British American Tobacco took control of Reynolds American for $49 billion last year (Reynolds makes Newport, the leading menthol brand in the U.S.).
  • Race plays a role, too: Menthols have historically been marketed to African Americans. Civil rights organizations including the NAACP called the ban "long overdue."

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Bottom line, per the NYT: "The three measures have a common target: the myriad flavors used to entice young people to vape and smoke."

RETAIL

Is That an AI Lab? Nope, Just a Walmart

If we've told you once, we've told you a thousand times: A booming economy and strong consumer sentiment have been great for retailers.

So instead of only telling you about Walmart's (-2.01%) third-quarter financials (which, BTW, featured 3.4% U.S. sales growth and $124.9 billion in revenue), let's talk about how Walmart, the world's largest retailer, is trying to innovate.

There's a major focus on winning customers online. With annual e-commerce sales growth clocking in at 43% in Q3, Walmart looks ready for the prime-time holiday season.

  • Walmart is set to pass Apple to become the third largest e-commerce retailer by sales this year (behind Amazon and eBay), according to eMarketer.
  • It'll snag 4% of U.S. e-commerce sales, up from 3.3% last year.

And that takes tech investment. Stores are morphing into tech powerhouses, complete with distribution hubs to speed up deliveries, employees trained to work in tandem with AI/robots, and handy apps to help customers find what they need.

TECH

Zuck and Sandberg Are Definitely Ready for the Weekend

Not sure who you've been talking to the past few months...but NYT journalists were chatting in secret with 50+ people (execs, lawmakers, lobbyists, etc.) about Facebook's (-0.26%) handling of its recent scandals.

What did they find? The report claims that CEO Mark Zuckerberg and COO Sheryl Sandberg ignored warning signs, deflected blame, and sought to "shift public anger toward rival companies." And that's only the first couple paragraphs.

Here's more:

  • "At critical moments over the last three years, [Zuckerberg and Sandberg] were distracted by personal projects, and passed off security and policy decisions to subordinates..."
  • Apple CEO Tim Cook's criticism of Facebook "infuriated Mr. Zuckerberg, who later ordered his management team to use only Android phones."

Facebook's board pushed back yesterday, calling the report "grossly unfair." It admitted the company was "too slow" to detect Russian election interference, but said it's "made considerable progress" since then.

Exhibits A and B? Its ability to limit misinformation around the midterm elections, and this brand new report detailing its removal of harmful content. Plus, Zuckerberg made a point to defend himself in front of reporters yesterday.

FOOD

Thanksgiving Dinner > Fries at Chili’s

Whether you're watching football, tuning into Santa's arrival in front of Macy's, or chopping onions 'til your eyes turn into fountains...Thanksgiving is getting better for everyone this year.

According to the American Farm Bureau Federation, a classic Thanksgiving dinner to feed 10 (plus leftovers) will come to $48.90 on average, down 22 cents from 2017.

Your math is right. The average Thanksgiving meal this year costs under $5 per head, as in...less than an order of Texas Cheese Fries at Chili's. The cost of the meal has been steadily declining for three straight years now, per the AFBF.

And why's that? Just look to the star of the show—the turkey.

  • A 16-pound bird averages $21.71 this year, or about $1.36 per pound. That's down ~3% from last year. And retail turkey prices are now at their lowest level since 2014.

+ Wondering what else will be different this Thursday? We're breaking it down, from stuffing to pumpkin pie, in our Sunday edition—Light Roast. Just refer three friends to the Brew and it's all yours. Get Light Roast now.

QUIZ

The Brew’s Weekly News Quiz

Heavier losses than Uber. In greater turmoil than Brexit. More volatile than the natural gas markets. It's the Brew's weekly news quiz.

1. What announcement has sparked a "condo gold rush" in the Long Island City neighborhood of Queens?

2. An equipment issue at California's largest utility is being investigated as the possible cause of the Camp Fire in northern California. What's the company's name?

3. Last weekend, a startup called Rocket Lab launched several satellites into orbit. Why was the launch notable?
Picture
a) It was the first launch with the mission of contacting intelligent life-forms in space
b) It symbolizes a new era of smaller rockets
c) Rocket Lab is completely bootstrapped
d) New Zealand's Prime Minister was on board

4. Do you remember the unit of measurement for natural gas we mentioned yesterday?

5. Fill in the blank: Pabst Brewing Co., creator of PBR, headed to court to battle ______, which Pabst says is trying to put it out of business.

6. WeWork's biggest investor plugged it with another $3 billion in funding. Who is its biggest investor?

7. Speed round: Gather up your co-workers, pass out some paper and pencils, and set a timer to 90 seconds. As we remember Marvel Comics legend Stan Lee, we ask you...how many Marvel characters can you name?

Answers: 1) Amazon's HQ2 2) PG&E 3) Symbolizes a new era of smaller rockets 4) mmBtu 5) MillerCoors 6) SoftBank 7) Here's a list

WHAT ELSE IS BREWING

  • Apple (+2.47%) has tapped A24, the Oscar-winning studio behind "Moonlight," to produce a slate of films.
  • J.C. Penney (+10.57%) shares rebounded in a big way after the retailer reported disappointing revenue last quarter.
  • The U.S. Treasury has issued sanctions against 17 Saudi Arabian officials who are accused of being involved in the killing of journalist Jamal Khashoggi.
  • SpaceX won approval from the FCC to deploy more than 7,000 satellites.
  • Nvidia stock nosedived as much as 19% after hours after the chipmaker missed revenue and guidance estimates.
  • PG&E, the California utility under intense financial pressure from the wildfire, saw its shares drop 31% during the trading day...only to shoot up 36% after hours on a report that regulators do not want it to go bankrupt.

BREAKROOM

From the Crew
Things we've learned together in the last two weeks: Panda Express Orange Chicken is polarizing, people take really long showers, and, per some of your responses to yesterday's airport rankings...

...the Denver airport has a fiberglass sculpture of a demonic horse with red eyes. It's nicknamed "Blucifer."

But really, if you're in the mood for a good Friday morning conspiracy dive, then have some fun with all the wild theories about Denver's airport. Can you say Illuminati HQ?

Friday Puzzle
Name a well-known U.S. city in two words. Replace each of those words with a word that rhymes with it, and you'll name a large sea creature in two words. What is it?

(Answer located at bottom of newsletter)

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Breakroom Answers


Friday Puzzle
Santa Fe → Manta Ray

 

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