Economy & Business

Why it matters: Despite murmurs of an impending economic crash, the U.S. has seen strong job growth and record low unemployment as trade wars, sweeping technological change and new media consumption habits are changing the American economy.

All economy & business stories

Wall Street falls into correction territory as coronavirus rout intensifies

A trader on the floor of the New York Stock Exchange. Photo: Johannes Eisele/AFP via Getty Images

The S&P 500, Dow Jones and Nasdaq all entered correction territory on Thursday, down 10% from their recent record highs amid a global market rout that began earlier this week following a spike in the coronavirus cases around the world.

The big picture: Stocks fell more than 3% for a time on Thursday morning, extending the market’s worst week since the financial crisis in 2008, according to CNBC.

Podcast: Space tourism blasts off

This year, both Virgin Galactic and Blue Origin plan to fly passengers on suborbital space trips. Dan and and Axios' Miriam Kramer discuss how tourism could change space industry economics, regulation, and size.

Grocery delivery gets a target market

Reproduced from CivicScience; Note: Not all responses shown; Chart: Axios Visuals

The ideal grocery delivery customer is young and rich, new data from CivicScience shows.

Why it matters: Companies like Amazon and Walmart are investing further in grocery delivery and the data show who their target demographic could be.

Record low rates could exacerbate debt, housing issues

Illustration: Rebecca Zisser

The stock market selloff has drawn the most attention this week, but moves in the U.S. government debt market will likely have much more important impacts on the economy.

The state of play: Mass bond buying has taken place since the beginning of the year and picked up steam as headlines about the spread of novel coronavirus have grown more worrisome.

CEO salaries are growing at an unprecedented pace

Reproduced from As You Sow; Chart: Axios Visuals

CEO pay is growing at breakneck speeds even for top executives who aren't doing a very good job. In response to this trend of overvalued execs, social responsibility nonprofit As You Sow released its latest report on the most overpaid CEOs of S&P 500 companies.

What it means: The list is a calculation based on the chief executive's pay package, total shareholder return of the company during the previous year, and the pay relative to their company's average worker.

Microsoft says PC unit will fall short of guidance due to coronavirus

Photo: Nicolas Economou/NurPhoto via Getty Images

Microsoft does not expect its PC unit, which includes Windows and Surface, to meet its previous quarterly revenue guidance due to the impact of the coronavirus on computer production, the company said in a Wednesday statement.

Our thought bubble, via Axios' Ina Fried: It's PC supply, not demand, that is below expectations, as the supply chain — much of which is in China — has been slower to return to full production.

The rise of "granny flats"

Illustration: Eniola Odetunde/Axios

Tiny cottages in backyards and apartments above garages — also known as granny flats or in-law suites — are gaining popularity in cities desperate for more, smaller housing options.

Why it matters: About 75% of the land in U.S. cities is zoned for single-family housing only. Proposals to build multifamily housing often run up against stiff NIMBY-ist opposition.

Why Amazon's bigger Go grocery stores matter

An Amazon Go store in Seattle. Photo: David Ryder/Getty Images

With the opening of its first large-format cashier-less grocery store in Seattle on Tuesday, Amazon is on its way to further expanding its physical footprint across U.S. cities.

The big picture: Amazon’s 2017 purchase of Whole Foods was never the end of its grocery ambitions — or its fight to win a bigger share of the whopping $700 billion per year American grocery industry. With its own network of stores, Amazon could attract shoppers looking for cheaper prices than Whole Foods and dramatically grow its brick-and-mortar reach.

Blackstone to acquire U.K. student housing company iQ for $6 billion

Stephen Schwarzman, co-founder and CEO of Blackstone Group, on Nov. 5, 2019. Photo: Pedro Fiúza/NurPhoto via Getty Images

The Blackstone Group agreed to buy British student housing company iQ for $6.06 billion (£4.66 billion) from Goldman Sachs Merchant Banking and Wellcome Trust.

Why it matters: It's Britain's largest-ever private real estate acquisition, and is part of Blackstone's apparent goal to become much of the world's landlord.

Reassessing the global impact of the coronavirus

Illustration: Aïda Amer/Axios

Economists are rethinking projections about the broader economic consequences of the coronavirus outbreak after a surge of diagnoses and deaths outside Asia and an announcement from a top CDC official that Americans should be prepared for the virus to spread here.

What's happening: The coronavirus quickly went from an also-ran concern to the most talked-about issue at the National Association for Business Economics policy conference in Washington, D.C.

Disney and Salesforce departures highlight intensifying CEO shuffle

Bob Iger. Photo by Rodin Eckenroth/FilmMagic

A wave of CEO departures was announced Tuesday, as the chief executives of Mastercard, Salesforce, Thomson Reuters and Disney all had notice of their impending departures made official.

The big picture: The incredibly high-profile turnover announcements are part of what has become an emergent trend at the top of U.S. businesses over the past year.

Weak U.S. debt auction shows market sees even lower rates

Illustration: Rebecca Zisser/Axios

The Treasury held an incredibly weak auction of 2-year government debt Tuesday that saw primary dealers, who are essentially on clean-up duty, take home their highest share of the auction since December 2018.

What it means: Even though yields on the 2-year note have fallen by nearly 40 basis points this year, traders are convinced that there is "certainly more room for yields to fall," Ben Jeffery, rates analyst at BMO Capital Markets, tells Axios.

Small cap stocks have lost

Data: Investing.com; Chart: Axios Visuals

When President Trump launched the U.S. into a trade war in 2018, many fund managers argued that small-cap stocks were poised to outperform because their business would be immune to tariffs and uncertainty.

What's happening: They did well over the course of that year but after Tuesday's 3.5% decline, the Russell 2000 index, which tracks many of the nation's small public companies, has fallen to near its closing level from February 2018.

Exclusive: Rich Clarida's big announcement

Richard Clarida, the Fed vice chair. Photo: Dominik Bindl/Getty Images

Richard Clarida is back in the recording studio cooking up some heat, the Fed vice chair tells Axios exclusively.

Scoop: Clarida is working on a follow-up album to 2016's certified banger "Time No Changes," he says, and has already recorded a number of tracks.

Rural America's meager business growth

Reproduced from Center for American Progress; Chart: Axios Visuals

The growth of small businesses has been concentrated in big cities and urban suburbs since the Great Recession, while nearly all rural areas have experienced substantial loss of businesses in the past decade.

Why it matters: "Firm growth is a crucial part of economic development, and business creation has been critical in the aftermath of previous recessions. But policies geared toward encouraging startups have not been effective in rural areas, leading to a growing regional divide," per a new report by the Center for American Progress.

Cannabis-based drug is going mainstream

Epidiolex has a list price of $1,310 per bottle. Photo: GW Pharmaceuticals

Sales of the epilepsy drug Epidiolex hit almost $300 million in 2019, GW Pharmaceuticals reported Tuesday. Sales are expected to surpass a half-billion dollars this year as the drug gains more insurance coverage in Europe.

Why it matters: Epidiolex is the first FDA-approved medication made from a substance in cannabis, and it's starting to take off.

Go deeperArrowFeb 26, 2020 - Health

Bob Iger stuns media world with sudden departure as Disney CEO

Photo: Jeff Kravitz/FilmMagic

In a move that shocked the media industry, Bob Iger said Tuesday he would step down from his role as CEO of the Walt Disney Company after leading the entertainment giant to unprecedented success during his 15-year run in the job.

Why it matters: Iger is credited with having successfully led Disney through a series of risky but highly successful acquisitions that not only solidified the company's entertainment dominance, but also ultimately reshaped the entire media landscape.

Minute Media raises $40 million at valuation exceeding $500 million

Illustration: Sarah Grillo/Axios

Minute Media, a holding group that owns digital sports and entertainment websites like Players' Tribune and The Big Lead, announced Wednesday that it has raised $40 million in venture capital in its latest fundraising round. Sources tell Axios that the company's post-money valuation is more than $500 million. It's raised $160 million to-date.

Why it matters: Minute Media is hoping to expand its business by selling publishing software as a service, not just by monetizing content.

More economy & business stories