RETAIL

A Tale of Two Retails

It was the best of times (the holidays), it was the worst of times (a pandemic). So how are retailers faring right now? 

First up, Walmart

In Q3, e-commerce sales at the world's biggest retailer surged 79% and profits 56%—impressive numbers despite a subdued back-to-school season and the petering out of government stimulus. However...

• After rising 10% and 9.3% the first two quarters, same-store sales growth slowed to 6.4%.

The takeaway: Foot traffic is down, but customers are spending more per trip and taking advantage of curbside pickup and delivery. Walmart's massive store footprint remains an important complement to growing e-commerce ambitions.

Home Depot's turn. Consumers are still directing unused travel, restaurant, and leisure funds to shiplap, mulch, and questionably large skeletons. Home Depot's net profit and U.S. same-store sales both rose 24% annually, beating expectations. 

Pulse check: Home Depot and Walmart are situated in retail categories that have remained bright spots for consumer spending amid the pandemic—household essentials and home improvement. 

• Other retail categories, like apparel, haven't been so lucky. Yesterday, Kohl's reported a 13.3% decline in Q3 sales. 
• And overall, October retail sales eked out 0.3% growth, below expectations and September's 1.6% gain. 

What's next? 

As Covid-19 cases rise, anxious consumers are once again squirreling away essentials like TP, cleaning products, and dry food. In areas with worsening outbreaks, Walmart has seen supplies run short, though CEO Doug McMillon assured investors his superstores are better equipped to handle things this go-around. 

• Other retailers are also taking precautions: Kroger, Wegmans, and Publix are reducing store hours and reinstating purchase limits on paper products, hand sanitizer, and disinfectant spray. 

Bottom line: Covid has fundamentally changed people's shopping habits. The current trajectory of the pandemic and recent earnings reports indicate that fewer in-person trips, more e-commerce, and curbside pickup are here to stay. 

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FED

Senate Shelves Shelton

Judy Shelton, President Trump's nominee for the Federal Reserve's Board of Governors, was rejected in a 50–47 vote on the Senate floor yesterday. Republican Senators Mitt Romney, Susan Collins, and Lamar Alexander broke party lines to block her. 

In econ circles, Shelton's more controversial than creamed spinach as a Thanksgiving side. Critics have questioned her personal ties to Trump (she was a former campaign adviser), her assertions that the Fed should be less independent, and her former advocacy for the abandoned gold standard.

• Democratic Sen. Ron Wyden criticized the confirmation push, saying Shelton's "ideas are so wacky and outdated, giving her authority over the dollar would be like putting a medieval barber in charge of the CDC."

Looking ahead...Senate Majority Leader Mitch McConnell can still bring Shelton's name up for consideration if he gets at least 50 votes together.

+ While we're here: Shelton was vying for one of two open seats on the Fed's Board of Governors. Learn more about what they do and who's in charge in the Brew's Fed diversity map.

HEALTHCARE

Your Medicine Is Out for Delivery

Yesterday, Amazon announced it's diving headfirst into a new sector: healthcare. The e-comm giant rolled out a prescription drug delivery service. 

• OK, so Amazon actually waded into healthcare a while ago—it bought online pharmacy PillPack in 2018. But this is a much bigger initiative. 
• Shares in CVS and Walgreens, the U.S.' dominant pharmacies, dipped as much as 9% and 10%, respectively. 

How it works: Customers can use the Amazon app or website to order prescription drugs. Prime members get free two-day delivery, plus steep discounts (up to 80% off generics). 

Big picture: The healthcare sector is big and ripe for disruption. But the current system is fairly ingrained, since most people are used to going to their IRL local pharmacies. And in some cases, switching to a new pharmacy requires visiting the doctor, which people are hesitant to do as Covid-19 cases soar. 

Then again, the era of social distancing may be the perfect time to get consumers used to ordering prescription drugs online.

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Athletic Greens’s tasty ingredients work together to fill the nutritional gaps in your diet, increase energy and focus, aid with digestion, and support a healthy immune system. The best part? No pills and it tastes super scoopin’ delicious.

And now, Athletic Greens is giving away a winter months special with a free year's supply of immunity-supporting vitamin D and five free travel packs with your first order. 

Invest in your health today.

SOCIAL MEDIA

Congress Gets Its Monthly Dose of This Guy

Yesterday, Facebook CEO Mark Zuckerberg and Twitter chief Jack Dorsey mic'd up yet again for a remote hearing with the Senate Judiciary Committee. To channel Michael Barbaro…

Here's what 

you need 

toknowabout it: 

• Republican lawmakers were most concerned about the platforms' content moderation policies, imploring the CEOs to intervene less in user activity. Sen. Joni Ernst also raised issues around Facebook's plans to add end-to-end encryption and questioned whether that would impede efforts to root out illegal activity. 
• Senators also brought up the spread of misinformation, antitrust, and whether these products could be considered addictive. 
• Both CEOs said President Trump's accounts would face tougher rules after he's no longer president. 

Zoom out: Though Zuckerberg and Dorsey both defended their companies, they made very different arguments about the path forward. Zuckerberg said Facebook's ultra-sophisticated algorithms can be deployed to tackle the issues lawmakers raised. Dorsey favors empowering the user to opt out of algorithmic sorting that surfaces the most popular (and therefore potentially the most divisive) content.

CRYPTO

Bitcoin to the Moon?

In 2010, a software developer bought two pizzas for 10,000 bitcoin.

After this week's rally, a single bitcoin is now worth more than $17,000. That's tantalizingly close to its all-time high of nearly $20,000 set during the crypto frenzy of December 2017. 

What's going on? With bitcoin, it's always dangerous to speculate, but many see the recent buy-in of institutional names—including Fidelity, Square, and PayPal—as handing the digital asset some mainstream ~currency~. 

One other thing about this rally: No one's talking about it. Whereas in late 2017 you couldn't go two Morning Brew newsletters without seeing a bitcoin headline, the conversation this time around has been tamer.

• Daily tweets about bitcoin have dropped from 120,000 during the initial boom to around 30k–60k, the managing director of crypto brokerage eToro told Bloomberg. 

Crypto bulls think that reflects a more sustainable path forward, rather than the wild speculation that drove prices higher three Thanksgivings ago. 

Ray Dalio is not one of them. Yesterday, the hedge fund legend tweeted a few criticisms of bitcoin, saying he'd "love to be corrected." 

WHAT ELSE IS BREWING

• Robinhood, the pioneering trading app, is shopping around for banks to help with a 2021 IPO, Bloomberg reports.
• Twitter’s disappearing tweets feature, Fleets, went live yesterday.
• SoftBank CEO Masayoshi Son told the NYT he’s sitting on about $80 billion in cash and is ready to pounce with more big bets. 
• Roger Ferguson, the CEO of money manager TIAA, is stepping down after 12 years. He’s rumored to be on the short list for a Biden Cabinet position.
• Conan O’Brien is ending his daily late-night talk show on TBS and moving to a weekly variety show on HBO Max. “In 1993 Johnny Carson gave me the best advice of my career: ‘As soon as possible, get to a streaming platform,’” Conan said in a statement.

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GAMES

Leaderboard

The following list shows the top five items in which category?

1. Colosseum
2. Millennium Falcon
3. Hogwarts
4. Taj Mahal
5. Diagon Alley (from Harry Potter)

ANSWER

The largest LEGO sets in history. The Roman Colosseum set was just released, featuring 9,036 bricks.