1 big thing: China losing its grip

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2. Charted: Traveling in the right direction

3. What's happening

4. Slack CEO signs off

5. Think your way young

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6. What they're saying

Today's newsletter is 694 words, a 2½-minute read.

🔔 The dashboard: The S&P 500 closed down 1.8%.

Biggest gainer? United Airlines (+2.6%), following a stock upgrade and positive comments from Morgan Stanley.

Biggest decliner? VF Corp. (-11.2%), the owner of the North Face and Timberland brands, after cutting second-half guidance and announcing its CEO is stepping down.

Today's newsletter was edited by Pete Gannon and copy edited by Sheryl Miller.

Closer

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green

Catch up on the day's biggest business stories and look ahead to important trends. Led by Hope King and Nathan Bomey.

Axios Closer

1 big thing: Balenciaga's big blunder

2. Charted: Inflation flattening

4. Summit's most memorable moments

5. The powerful's latest power move

Today's newsletter is 685 words, a 2½-minute read.

🔔 The dashboard: The S&P 500 closed down 0.1%.

Biggest gainer? Etsy (+5.5%), the online retail marketplace, on analyst comments that it fared particularly well on record Black Friday shopping.

Biggest decliner? Salesforce (-8.3%), the cloud-based software company, continuing its slide after yesterday's closing bell following the sudden departure of co-CEO Bret Taylor.

📢 Programming note: Join Hope on Dec. 14 in NYC for Axios Communicators' inaugural event featuring comms leaders from Spotify, Volkswagen and more. Register here.

🇨🇭Axios will be at the 2023 World Economic Forum in Davos, Switzerland. Want to attend one of our events? Request an invite here.

1 big thing: A stressful clock

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2. Bonus chart: Leaning on H-1Bs

4. Robinhood chases loyalty

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5. Rising prices fuel GoFundMe surge

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Today's newsletter is 691 words, a 2½-minute read.

🔔 The dashboard: The S&P 500 closed down 1.4%.

Biggest gainer? Textron (+5.3%), the industrial conglomerate, after announcing a U.S. Army helicopter contract that could be worth $70 billion.

Biggest decliner? NRG Energy (-15.1%), after announcing a $2.8 billion deal to acquire Vivint Smart Home.

Today's newsletter was edited by Pete Gannon and copy edited by Sheryl Miller. 

1 big thing: Tesla shares losing power

2. Charted: Into the home stretch

4. Zuck takes a bite of the Apple

5. Spotify wraps up 2022 🎤

Today's newsletter is 677 words, a 2½-minute read.

🚨 Situational awareness: Salesforce co-CEO Bret Taylor steps down; shares slide 6.6% after the close.

🔔 The dashboard: The S&P 500 closed up 3.1%, as Fed chair Jerome Powell signaled a slowdown in the pace of rate hikes.

Biggest gainer? Estee Lauder (+9.7%), the cosmetics company, ending a streak of losses in three straight trading sessions.

Biggest decliner? NetApp (-5.8%) the cloud computing company, after missing revenue estimates for the quarter and providing disappointing guidance for the full year.

1 big thing: Dollar General is coming to town

Illustration of a strip mall dominated by Dollar General signs

2. Charted: Jobs report shows shift

4. Elon Musk says that's enough

5. Cash stuffing is back

Today's newsletter is 683 words, a 3-minute read.

Biggest gainer? Enphase Energy (+7.0%), a solar industry supplier, after announcing the launch in Europe of its IQ8 Microinverters.

Biggest decliner? PayPal (-4.9%), the online payments processor. ¯\_(ツ)_/¯

Today's newsletter was edited by Pete Gannon and copy edited by Patricia Guadalupe.

National

And you thought cargo pants were out of style.

State of play: You were wrong, if sales at Abercrombie & Fitch are any indication.

Cargo pants sold "quite well during back-to-school" shopping, Abercrombie CEO Fran Horowitz said Tuesday on an earnings call. "We didn't have enough."

It's part of a broader trend toward "non-denim bottoms," he said.

What others are saying: "They're effortless, cool, trendy and so comfortable," EOnline reports.

The bottom line: Celebrities are apparently leading the way, with Kylie Jenner herself wearing them this summer.

Other celebs embracing the "throwback trend" include Halle Berry and Hailey Bieber, according to Parade.

Cargo pants are back: Abercrombie can't get enough

A man in a pink shirt and cargo pants walks the sidewalk

NBA player Shai Gilgeous-Alexander is seen in cargo pants on Nov. 16, 2022, in Washington, DC. Photo by THE HAPA BLONDE/GC Images

Fashion

And you thought cargo pants were out of style.State of play: You were wrong, if sales at Abercrombie &amp; Fitch are any indication.

After a record economic expansion, the coronavirus pandemic sent the U.S. economy into a recession as unemployment soared to staggering heights. The country now faces urgent questions about how much stimulus is needed for reeling consumers and businesses, and what a recovery might look like.

Economy & Business

As sports gambling sweeps across the nation, pressure is building on sportsbooks, regulators and leagues to ensure that no one gets an unfair advantage.

Why it matters: Suspicious betting on a recent UFC fight cast a spotlight on the need to ensure a level playing field for gamblers.

State of play: After a slew of bettors appeared to get a heads up on a pre-fight injury, officials turned to a little-known but increasingly powerful firm called U.S. Integrity to investigate.

“At our core we are an anomaly detection company, so we look for abnormalities across the sports betting ecosystem and then highlight them,” Scott Sadin, COO of Las Vegas-based U.S. Integrity, tells Axios in an exclusive interview.

Catch up quick: A featherweight fight on Nov. 5 between Darrick Minner and Shayilan Nuerdanbieke ended suddenly in the first round in a cloud of suspicion after the odds on the fight “moved dramatically in the hours leading up” to it, ESPN reported.

“Bettors were convinced that not only would Nuerdanbieke win, but he would do so in the first round."

What they're saying: Sadin declined to address the UFC investigation, but said the company is focused on exposing the “misuse of insider information, potential game manipulation and match-fixing concerns,” zeroing in on “abnormal” bets, officiating, roster decisions, plays and coaching maneuvers.

How it works: U.S. Integrity uses algorithmic analysis, sifting through betting data in real time on behalf of certain clients — and in other cases analyzing wagers after the fact upon request.

The company takes those insights and then uses old-fashioned, shoe-leather investigative techniques to assess whether any manipulation took place or whether anyone got an unfair edge. 

Clients include the largest sportsbooks — such as DraftKings, BetMGM and Caesars — as well as sports leagues.

“There is very much a balance we have to strike between art and science,” Sadin says. “It’s a combination of both.”

The big question: What constitutes an unfair edge? It’s not necessarily illegal to make a bet based on personal knowledge about a player’s health, for example.

But leagues and sportsbooks don’t like it — and anyone they catch doing it can be punished, Sadin says. Gamblers, for example, can be banned from certain sportsbooks or limited to smaller bets.

"Whether it’s illegal or not we want to highlight it for the key stakeholders so that operators can move forward,” Sadin says.

Worth noting: U.S. Integrity’s duty is to its clients, not to the public. 

Sadin says the company does not feel a responsibility to report matters to the public. That’s up to the leagues, sportsbooks or regulators, he says.

The bottom line: With the proliferation of legalized sports betting across the country, sportsbooks and leagues must work to assure the public that the market isn't rigged.

Meet the secretive company that investigates suspicious sports betting activity

Illustration of a die wearing a burglar mask.

Sports betting

As <a class="gtmContentClick" data-vars-link-text="sports gambling" data-vars-click-url="https://www.axios.com/sports/sports-betting" data-vars-content-id="4708dbcd-c970-49c2-9300-fda4c0a96f3c" data-vars-headline="Meet the secretive company that investigates suspicious sports betting activity" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/sports/sports-betting" target="_self">sports gambling</a> sweeps across the nation, pressure is building on sportsbooks, regulators and leagues to ensure that no one gets an unfair advantage.Why it matters: Suspicious betting on a recent UFC fight cast a spotlight on the need to ensure a level playing field for gamblers.

International companies with ties to China are closely monitoring the sudden surge of protests in the country over the government's "zero COVID" stance — particularly if the unrest leads to any policy changes.

Why it matters: The restrictions have kept the pandemic in check in China for a long time — but they've also had sweeping implications for businesses, undermining domestic consumer demand and triggering production shortfalls in international supply chains.

Zoom out: Analysts say Chinese authorities are stuck in an uncomfortable spot, not wanting to back down from their position while also needing to ensure that the unrest doesn't spread.

"The economic outlook is terrible, whatever the authorities now do," Capital Economics chief Asia economist Mark Williams wrote Monday.

The latest: Chinese state media continued to praise zero-COVID measures on Monday, signaling no change in official policy, Axios' Bethany Allen-Ebrahimian writes.

The impact: If China were to respond to the protests by easing restrictions, Apple would be among the first to benefit.

The tech giant is reportedly facing significant supply shortages in its iPhone line due to ongoing lockdowns and labor unrest at a key manufacturing facility.

Wedbush Securities analyst Dan Ives said Monday in a research note that "many Apple stores" have only 35% to 40% of typical inventory of the iPhone 14 Pro.

"The zero China Covid policy has been an absolute gut punch to Apple's supply chain with the Foxconn protests in Zhengzhou a black eye for both Apple and Foxconn," Ives wrote.

The bottom line: International companies with the biggest investments in China face the most risk if the country refuses to budge, Niagara University economist Tenpao Lee tells Axios.

"Economically there are incentives for companies to move production out of China in order to save production costs," Lee says.

Apple, for example, has already taken steps to shift some production to India.

"But this is a long term situation," Lee says. "It’s not going to happen in one year."

China's COVID frustration boils over, protestors call for Xi to resign

China maintains zero-COVID despite unprecedented protests

Apple squeezed by COVID lockdowns in China

How China "zero COVID" protests affect companies like Apple

International companies with ties to China are closely monitoring the sudden surge of protests in the country over the government's "zero COVID" stance.

Illustration of gloved hand holding briefcase

China

International companies with ties to China are closely monitoring the sudden surge of protests in the country over the government&#x27;s &quot;zero COVID&quot; stance — particularly if the unrest leads to any policy changes.Why it matters: The restrictions have kept the pandemic in check in China for a long time — but they&#x27;ve also had sweeping implications for businesses, undermining domestic consumer demand and triggering production shortfalls in international supply chains.

Friday's sentencing of Elizabeth Holmes serves as a reminder of the danger of showing blind faith in promising business leaders with inadequate oversight.

Why it matters: The demise of Holmes — the disgraced leader of once-heralded blood-testing startup Theranos — and this month's implosion of FTX illustrate the real-world consequences of giving even the most captivating leaders too much leeway to do their own thing.

Driving the news: Holmes, who was convicted in January of three counts of wire fraud and one count of conspiracy to commit wire fraud, was sentenced on Friday to 11 years and three months in prison.

Threat level: Absolute power has been a recurring formula for a rapid rise — and a rapid fall — in the business world.

Holmes famously arranged for a Theranos board with little scientific expertise, making it easy for the company to mislead investors and customers on the progress of its rapid-testing technology.

Sam Bankman-Fried appears to have had little oversight at FTX as he led his crypto exchange into a series of disastrous and potentially fraudulent maneuvers that've led to its collapse.

In all, big-name investors lost more than $600 million in missing the red flags at Holmes' Theranos. And investors ordered to “support and observe” Bankman-Fried are set to lose close to $2 billion in FTX.

The bottom line: "No one always makes the good judgment," Charles Elson, founding director of the University of Delaware's Weinberg Center for Corporate Governance, tells Axios. "That’s why you need a good board, a good adviser or a good spouse to say, 'Hey, what are you doing?'"

Elizabeth Holmes and SBF exemplify dangers of insufficient oversight

Friday's sentencing of Elizabeth Holmes serves as a reminder of the danger of showing blind faith in promising business leaders with little oversight.

Photo Illustration of Elizabeth Holmes and Sam Bankman-Fried with eyes and rectangles behind them

Photo Illustration: Natalie Peeples/Axios. Photos: Taylor Hill and Bloomberg/Getty Images

Friday&#x27;s sentencing of Elizabeth Holmes serves as a reminder of the danger of showing blind faith in promising business leaders with inadequate oversight.Why it matters: The <a class="gtmContentClick" data-vars-link-text="demise of Holmes" data-vars-click-url="https://www.axios.com/2022/11/17/elizbeth-holmes-sentencing-friday" data-vars-content-id="89ccd8a4-3fbb-42f4-9a00-d8c331e55965" data-vars-headline="Elizabeth Holmes and SBF exemplify dangers of insufficient oversight" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2022/11/17/elizbeth-holmes-sentencing-friday" target="_self">demise of Holmes</a> — the disgraced leader of once-heralded blood-testing startup Theranos — and this month&#x27;s implosion of FTX illustrate the real-world consequences of giving even the most captivating leaders too much leeway to do their own thing.

Dollar General's store-on-every-corner strategy is accelerating as consumers seek relief from inflation.

Why it matters: Price increases are prompting shoppers to trade down to less expensive products or stay closer to home — and that plays right into the hands of discount retailers like the nation's largest dollar-store chain.

Driving the news: Dollar General announced Thursday that it'll open another 1,050 stores in 2023, after posting an 11% sales increase in the third quarter compared with last year, and an 8% jump in net income.

The company already has the most locations of any retailer in the U.S. with more than 19,000, according to GlobalData.

What they're saying: "The fact the business model is firing on all cylinders has given Dollar General the confidence to continue its rapid pace of physical expansion," GlobalData managing director Neil Saunders wrote.

State of play: Dollar General's omnipresence has been key to its success.

Six in 10 lower-income consumers are shopping closer to home to save gas, according to GlobalData.

Meanwhile, arch rival Dollar Tree has been dealing with a litany of operational issues in its Family Dollar division, including a devastating rat-induced recall.

Yes, but: Dollar General's rapid expansion may be taking a toll.

It warned Thursday that it needs temporary warehouse space to meet its inventory needs, and securing it is taking longer than expected — driving up costs.

It's also facing higher-than-expected supply chain costs and is paying more for transportation.

That was enough for it to lower its full-year profit outlook, sending its stock down 8% Thursday.

Loop Capital Managing Director Anthony Chukumba told Yahoo Finance, however, that the selloff was "overdone." He characterized a lot of Dollar General's headwinds as "temporary." 

Shares bounced back Friday, trading up 2% around noon despite overall market declines.

What's next: Dollar General is moving into new categories, setting its sights on the elephant in the room, Walmart.

Dollar General CEO Jeff Owen said on an earnings call that the retailer has already started selling fresh produce in 3,000 stores and plans to do so in more than 10,000 locations.

Dollar General tightens its grip on American retail

The company's expansion is accelerating as consumers seek out relief from inflation.

Retail

Dollar General&#x27;s store-on-every-corner strategy is accelerating as consumers seek relief from inflation.Why it matters: Price increases are prompting shoppers to trade down to less expensive products or stay closer to home — and that plays right into the hands of discount retailers like the nation&#x27;s largest dollar-store chain.

Nathan Bomey

Stories

Dollar General tightens its grip on American retail

How China "zero COVID" protests affect companies like Apple

Cargo pants are back: Abercrombie can't get enough

Meet the secretive company that investigates suspicious sports betting activity

Elizabeth Holmes and SBF exemplify dangers of insufficient oversight

Newsletter editions

⏰ H-1B visa anxiety

👷 Slack CEO exits

🛒 Dollar General is everywhere

🫥 Balenciaga's big blunder

🐰 Bad Bunny's triple crown