Happy Thursday! The stock market is at an all-time high, and Tesla shares rose 17.6% in the first five trading days of the year. If they carry on at that rate, the carmaker’s shares will each be worth $1,661,772 by Christmas, and Tesla’s market cap will hit $287 trillion.
In this week's newsletter: War isn't bad for stocks, why Australians are donating money to their government, the work-from-home trend, more on Tesla, and a Netflix joke.
Illustration: Aïda Amer/Axios
War. What is it good for? The stock market, it turns out.
Driving the news: U.S. stocks sold off when investors were faced with the specter of possible war with Iran. War kills hundreds of thousands of people every year, which is good for no one. Stocks understandably fell after Iraq invaded Kuwait in 1990, or when terrorists attacked the U.S. on September 11, 2001.
The big picture: Don't pay too much attention to short-term stock market gyrations. When you take a step back, it looks like war tends to be good — not bad — for American stocks.
By the numbers:
Determining the effect of war on the stock market isn't easy, since the U.S. is almost always at war. Since the end of World War II, per Eurasia Group, the U.S. has been at war in every year bar 1949 and 1985.
It's not just share prices, either. Mark Armbruster, president of Armbruster Capital Management, ran the numbers for the 1926–2013 time period and determined not only that large-cap and small-cap stocks outperform during wartime, but that they do so with lower volatility.
How it works: If Iran were to bring down the internet in North America, or set off a nuclear device in Manhattan, there would certainly be immediate and significant negative repercussions for stocks. But it's hard to price in tail risks.
The bottom line: Iran is not a significant part of global trade. The only way that U.S. companies can make money from Iran is by selling materiel for use in a war there. The bigger the war, the more money they can make.
America has gotten involved in 36 different wars since 1949; a conflict with Iran would bring that number up to 37. None of those wars caused a significant bear market.
Illustration: Sarah Grillo/Axios
The wine industry descended on Capitol Hill this week in a last-ditch attempt to avert 100% tariffs on all EU wines — as well as cheeses, cosmetics and other consumer products.
Why it matters: The U.S. has declared its intention to impose these tariffs as retaliation against the way that European nations illegally subsidized Airbus. But if they go into effect, the brunt of the pain will be borne not by European companies but by Americans.
How it works: European winemakers can sell their product anywhere in the world. American wine importers, distributors and retailers, by contrast, can only source European wine from Europe.
What they're saying: "We are fighting not just to be able to drink European wine; we are fighting for our livelihoods and for our hundreds of thousands of employees," writes another wine importer, Jenny Lefcourt, in the NYT.
The bottom line: It can take decades to cultivate transatlantic relationships with European winemakers. If the Trump administration severs those ties, no one knows when or whether they might grow back.
Former Nissan chairman Carlos Ghosn was in pugnacious form yesterday during a 145-minute press conference in Beirut, at which he proclaimed his innocence while simultaneously bemoaning the underperformance of the Nissan share price.
The big picture: Tesla stock closed on Wednesday at $492 per share, boosted by dreams of massive growth in China. That's comfortably above the $420 at which Elon Musk notoriously mulled taking the company private.
Illustration: Eniola Odetunde/Axios
The Australian wildfires have elicited massive charitable donations: $33 million crowdsourced from Celeste Barber via Facebook; $1 million from actor Chris Hemsworth; $700,000 from a bikini model sending nudes on Twitter.
Between the lines: The human urge to donate money in the wake of a disaster — to feel that you're doing something — can be incredibly strong.
Why it matters: Firefighting is a central part of what governments should provide, and to that end the RFS receives hundreds of millions of dollars from the government every year. The RFS is staffed by volunteers, but it is not primarily a charity.
My thought bubble: Part of the challenge facing the RFS is going to be to spend these funds on things it doesn't need, perhaps just by passing the money on to victims of the fire. All necessities should be covered by standard government funding mechanisms.
The first super-viral #brandtweet of 2020 came from Netflix India, which racked up almost 150,000 retweets and 700,000 "likes" by telling us all to just use someone else's account if we want to get our Netflix for free.
The big picture: In a way, Netflix likes it when you use someone else's account. A paying customer is better than a non-paying customer, but a non-paying customer is better than no customer at all.
The U.S. economy is shifting inexorably away from manufacturing and toward services, and with that shift comes a rise in remote work.
By the numbers: St. Louis Fed researchers found that more than 3% of American employees primarily worked from home in 2017, up from 0.7% in 1980.
What they're saying: "The technological substrate of collaboration has gotten shockingly good over the last decade," wrote Stripe CTO David Singleton in May, announcing that his company's fifth engineering hub would be "Remote."
The bottom line: America's self-employed have been working from home for decades. Now full-time employees are beginning to discover the attractions of avoiding the dreaded open office.
Illustration: Sarah Grillo/Axios
Why it matters: It’s a symbol of progress between the two nations. It doesn’t end the trade war — $250 billion worth of Chinese goods are still subject to 25% tariffs.
Frogmore Cottage. Photo: GOR/Getty Images
Frogmore Cottage is a late 18th century cottage on the grounds of Windsor Great Park, outside London.
The cottage was recently refurbished at a cost to U.K. taxpayers of £2.4 million (about $3.1 million). It had previously been five homes; the renovation turned it into just one, for the Duke and Duchess of Sussex, aka Meghan and Harry.
Finally, a wine-related note and disclaimer. When it comes to buying delicious wines from European winemakers, one of the best things you can do is start paying attention to the importer's name on the back label.
I enjoy and trust the wines imported both by Zev Rovine and by Jenny Lefcourt's Jenny & Francois. Whenever you find an importer who shares your taste in wine, that makes it much easier to make delightful discoveries.