Situational awareness: NAFTA is now USMCA, please update your address book accordingly. Unless you're a dairy farmer, you're unlikely to notice much of a difference. And if you can't remember or pronounce the new name, that's probably by design. Trade agreements are never popular. The best we can hope for is that they're forgotten as soon as they're announced. Given the news cycle these days, that isn't hard.
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The best-performing sector of the American stock market this year, bar energy, has been the "consumer discretionary" category — the companies that sell the things we like to buy but don't have to buy.
It's also been one of the main drivers of the market as a whole. While the broad stock market is up a very impressive 332% from its 2009 lows, consumer discretionary stocks are up a stunning 630%.
The bottom line: We're in a virtuous cycle, where record-low unemployment (just 3.7%, in September) feeds into job security, heightened consumer confidence and higher spending. In turn, that drives corporate growth in profits and headcount.
The U.S. consumer overwhelmingly shops at real, physical stores. For all the talk of Amazon's domination, only 10% of US retail sales are made over the internet.
By the numbers: The death of shopping malls is exaggerated: They are currently 94% occupied, according to CBRE.
Yes, but: What about New York City's empty storefronts? Well, as any New Yorker will tell you, our town is unique.
Illustration: Lazaro Gamio/Axios
The biggest unclaimed territory in the consumer discretionary universe is cannabis. Even though cannabis remains illegal under federal law, Americans spent $6 billion in 2017 on legal recreational and medical marijuana.
Why it matters: Americans may have spent a total of $50 billion on recreational cannabis last year, according to the best estimates. That leaves enormous room for the legal market to grow, even if cannabis consumption remains flat.
Early investments in growing cannabis have not necessarily paid off, with the price of "outdoor flower" plunging from about $3,000 per pound four years ago to as low as $250 per pound today, according to Drake Sutton-Shearer, the CEO of cannabis media shop Prøhbtd. Thanks to falling prices, marijuana sales in Colorado dispensaries actually fell in May 2018, compared to a year earlier.
A lot of people, including stock-market speculators, assume that a legalized and branded future awaits, just as with coffee, alcohol, tobacco and pharmaceuticals. But even if that's true, no one has a clue who the ultimate winners might be. (Remember that Juul came from nowhere to dominate the tobacco vape space.)
The bottom line: Hundreds of billions of dollars are currently spent on alcohol, tobacco, opioids and pharmaceuticals that treat pain or stress. Legal cannabis could, theoretically, capture a significant part of that market. But picking winners is hard. And full legalization is hardly a foregone conclusion. Expect extremely strong opposition before that happens.
The stock market might look as though it's effortlessly gliding to record highs, but there's a lot of turmoil right below the surface, much of it related to tensions between shareholders and management.
At Tesla, CEO Elon Musk seems to be constitutionally incapable of dialing down the tweets that have cost him and his shareholders billions of dollars in wealth.
At Unilever, lame-duck CEO Paul Polman wanted to cement his legacy by finally getting rid of the company's anachronistic and confusing structure of having dual listings and dual headquarters in London and Rotterdam.
At GE, CEO John Flannery was unceremoniously defenestrated on Monday, after just one year running the troubled conglomerate.
Illustration: Sarah Grillo/Axios
Later tonight, we'll get the results from the first round of presidential election results in Brazil. Former President Luiz Inácio Lula da Silva, the most popular candidate, is barred from running on account of being in jail. Far-right Jair Bolsonaro is the front-runner. He's almost certain to finish in the top two without reaching the 50% necessary to become president immediately.
Also tonight, the UN Intergovernmental Panel on Climate Change will release a special report on what's going to happen when the world gets 1.5°C (2.7°F) warmer than it was before the Industrial Revolution.
Very few countries face greater peril than Indonesia, where 1,500 islands could be underwater by 2050 and 40% of the capital city is below sea level. Indonesia also happens to be hosting the annual meetings of the World Bank and IMF this week, on the resort island of Bali.
We need to work together to de-escalate and resolve the current trade disputes. ... History shows that, while it is tempting to sail alone, countries must resist the siren call of self-sufficiency — because as the Greek legends tell us, that leads to shipwreck.— IMF Managing Director Christine Lagarde
Behold a tale of two budget deficits. True to stereotype, Italy's deficit was always greater than that of the U.K. — until 2007, when it shrank to just 1.5% of GDP. Since then, the roles have been reversed: Italy, constrained by its membership in the eurozone, has had relatively modest deficits, while the U.K., with a free-floating currency, has been able to spend more to recover from the crisis.
One effect of the booming stock market: Rich-people money has never flowed so freely. Michigan University has raised $5 billion in a single campaign, a record for a public university, while Harvard's most recent campaign raised a bonkers $9.6 billion, blowing away its $6.5 billion goal.
Mark Zuckerberg is hiring a chief investment officer to oversee $10 billion at his personal philanthropy, the Chan Zuckerberg Initiative. A primary objective, says Bloomberg, will be “optimizing the performance of CZI’s investment portfolio.”
Thought bubble: Philanthropies get richer every year, thanks to donations and investment returns. But the need is greatest now. Let tomorrow's billionaires address tomorrow's problems. If they can't, that's a sign that inequality will have been solved. The highest and best use for today's charitable funds is always to be found today, not tomorrow. Why is this money being invested, rather than spent?
If you like losing money, there has never been a better time to raise even more of that short-lived cash: 83% of IPOs this year have been from money-losing companies, and, per Axios' Dan Primack, that number is only likely to increase.
Dame Zaha Hadid, the first woman to win the Pritzker Prize for architecture (in 2004), also became the first woman to win the Design Museum Design of the Year Award, for 2013's Heydar Alijev Cultural Center in Baku, Azerbaijan. The single flowing envelope, curving in highly complex ways, contains multiple functions across eight floors, including a museum and a large auditorium. The building almost immediately became the signature landmark of modern Baku.