MARKETS

Dow Hits 29,972

Riding a wave of good vibes, the Dow Jones Industrial Average rallied past 29,972 points yesterday to a record high. 

• It also topped 30,000, another completely arbitrary number. 

Quick refresher on the Dow: It’s a collection of 30 "blue-chip" U.S. stocks. Blue chip = big, established companies like Microsoft, JPMorgan, Disney, and McDonald's. It’s often criticized for a funky weighting system and a small sample size (the S&P has more than 500 companies), but the 124-year-old index still holds a symbolic grip over Wall Street. 

And that’s exactly how professional investors view the Dow at 30k: symbolic, nothing more. The number could get some individual investors excited, but from a technical POV, it’s just another data point within the broader market rally.

Let’s talk about that rally 

How it started: The Dow was in the dumps during the onset of the pandemic, trading below 19,000 points in March. Industries such as energy, travel, and banking—all of which are featured prominently in the Dow—were crushed disproportionately due to the lockdowns.

How it’s going: Those beaten-down industries are enjoying a renaissance thanks to what Bloomberg calls the “back-to-normal” rally. Skyrocketing tech stocks (like Zoom and Peloton) are taking a breather while names like Boeing and AMC are mounting a comeback. 

What’s driving the back-to-normal rally? It’s likely the confluence of several developments: 

1. News that an effective vaccine(s) could be rolled out in weeks
2. Uncertainty around the election result fading away following President Trump’s legal setbacks 
3. Expectations that President-elect Joe Biden, and his Treasury Secretary nominee Janet Yellen, will push for more economic stimulus

The more you know: The Dow hit 10,000 for the first time in March 1999, and touched 20,000 in January 2017. Of course, each 10,000 point milestone represents a smaller proportional gain, because math. 

FOOD

L Catterton Passes the Cholula to McCormick

Yesterday, spice aisle mainstay McCormick decided to do what you do when the eggs come out a little rubbery: add Cholula. It agreed to buy the wood-capped hot sauce company’s parent from private equity firm L Catterton for $800 million. 

McCormick’s POV: Cholula will add to a spicy category within the food giant’s slate of offerings. Hot sauce sales in the U.S. are projected to near $1 billion this year, per Euromonitor, approaching ketchup’s throne. 

• McCormick has had a buttery, delicious year, with a major shift toward at-home cooking boosting sales of its grocery products, which include French’s mustard, Old Bay seasoning, and Frank’s RedHot. Others in the sector such as Kellogg have also seen higher sales numbers. 
• McCormick said that with Frank’s and Cholula, it’ll command about 30% of the U.S. hot sauce market. 

Cholula’s POV: McCormick said it would help Cholula boost e-comm sales, improve distribution, and strengthen its restaurant biz. DYK? Forty percent of consumers discover Cholula at restaurants. 

As for Cholula’s previous owner, L Catterton is reportedly expecting a 4x return on its 2019 purchase of Cholula. 

EDUCATION

College Students Have One More Test to Pass

As hundreds of thousands of college students trek home for Thanksgiving, public health experts hope Zoom burnout and dirty laundry are all they bring back. 

Universities are taking extra precautions: Many are ending in-person instruction this week and will wrap the semester up virtually. Some are encouraging students to stay home through the extended winter break.  

• The American College Health Association advised schools with in-person classes after Thanksgiving to ask students to remain on campus.

Big picture: A great migration of asymptomatic college students could worsen the U.S.’ Covid-19 caseloads. In the last week, new cases averaged 173,165 per day. 

What’s it mean for spring semester? 

Many colleges are expected to stick with virtual or hybrid learning, but we could see more human bodies on college campuses.

Yesterday, Princeton invited all undergrads to campus in January, though most instruction will remain virtual. And the University of Alabama is considering requiring all students and staff to return full-time unless they have a medical excuse. 

SPONSORED BY FIDELITY FRESH INVEST

Keep It Fresh

Trying to understand investing today can feel a bit like climbing Mt. Everest—without a Sherpa. 

So we teamed up with our friends at Fidelity to help guide us—and other young investors out there—on everything from investing trends to economic shifts to the pandemic’s effect on the market. 

Introducing Fresh Invest: What to Know When Investing Today—a limited podcast series hosted by our very own Alex Lieberman, CEO of Morning Brew (you know, the media company behind this here newsletter).  

Each week, Alex and a guest from Fidelity will dig into an oh so fresh topic as it relates to investing today, and answer some of the biggest questions on the minds of young investors. 

In this week’s episode, Alex and Katie Shaw, an analyst and portfolio manager at Fidelity, examine how the rise of e-commerce during the pandemic is shaping the retail sector today, and what you should be keeping track of as you assess the market as an investor. 

Tune in right here.

RETAIL

Retail Roundup

Sifting through Q3 retail earnings felt like a nice walk around the mall circa 2015. 

Gap Inc. shares fell over 8% after hours as earnings came in under expectations. Demand for athleisure and e-commerce boosted sales for Athleta and Old Navy, but that wasn’t enough to offset declines in its namesake and Banana Republic brands.

It was a raging quarter for e-commerce all around. 

• Abercrombie reported a 43% uptick in online sales.
• Nordstrom’s rose 54%. 
• Dick’s e-commerce sales rose 95%, while same-store sales grew 23%. 

C-suite shuffle: The sporting goods chain also dropped major news that its CEO of 36 years, Ed Stack, will transition to executive chairman and current president Lauren Hobart will take his spot. J.Crew also named a new CEO, Madewell chief Libby Wadle, who will replace Jan Singer after just 10 months on the job. 

The rest: RadioShack has more lives than a cat. A 70% jump in China sales gave Tiffany a jolt of confidence for the holiday quarter. And Best Buy shares fell 7% when the company warned early holiday sales could mean lower demand ahead. 

MUSIC

Music Biz in 2020: WAP Stands for We Aren’t Performing

Yesterday, the Recording Academy announced this year’s roster of Grammy nominees. 

The highlights: Obscure indie vocalist Beyoncé notched nine nominations in eight categories, and Taylor Swift scored six. 

• Dua Lipa, former Alabama Shakes frontwoman Brittany Howard, Billie Eilish, Megan Thee Stallion, and DaBaby could also take home some hardware in January. 

The snubs: The Academy still thinks of The Weeknd as Saturday and Sunday, even though the pop star will perform at the Super Bowl. Country star Luke Combs isn’t on the nominee list, either. 

Zoom out: Many artists are still scrambling to recover from the broad cancellation of live performances prompted by social distancing restrictions. In the first half of 2020, streaming music grew to 85% of the market by value, compared with 80% the prior year, per the Recording Industry Association of America. 

Looking ahead....plans for the Jan. 31 ceremony are murky, though we know late-nighter Trevor Noah will host. Producer and Recording Academy chairman Harvey Mason Jr. said the artists will be present and there will be a small audience.

WHAT ELSE IS BREWING

• YouTube suspended the right-wing One America News Network (OANN) from posting videos for a week because it promoted a phony Covid-19 cure.
• Purdue Pharma pled guilty to three federal felonies related to its role in fueling the opioid epidemic. 
• Elon Musk is now richer than Bill Gates...and everyone else on earth besides Jeff Bezos.
• France is easing some lockdown restrictions, while the UK will allow households to form a “Christmas bubble.” 
• Restaurant workers are getting laid off again.
• Jay-Z has been named the “chief visionary officer” for a cannabis-focused SPAC.

BREW'S BETS

A better career path is more attainable than ever. The CMA® (Certified Management Accountant) is the global benchmark for finance and accounting pros, and until Nov. 30, get 50% off. Make a difference in your career, get 50% off CMA® Entrance today.*

Secure early access. SimpliSafe’s Black Friday sale is here and you’re one of the first to know (seriously, we asked). Get their award-winning, 24/7 home security system for 50% off and a free HD security camera right here.*

Fun activity: We created an all-in-one virtual trivia game so you can connect with loved ones this holiday week. Learn more here (and if you do play, reply and tell us how it went). 

#Brewto100k: While the Dow passing 30k is a big deal, we’ve been laser focused on a different milestone: passing 100,000 followers on our Twitter account. On Monday we asked our ~97,000 followers to predict when we’ll pass the threshold, and the person who guesses correctly will win a Brew mug. Smash that follow button and make your own prediction.

Two Thanksgiving tips: 1) An exhaustive list of virtual turkey trots around the country and 2) how to donate to your local food bank that’s distributing Thanksgiving dinners.

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FROM THE CREW

Dept. of Warm Fuzzies, Follow-up Division

Yesterday, to celebrate the season of gratitude, we asked you to share the unexpectedly good things that fell into your laps during 2020. We got lots of lovely messages about quality time with family, rediscovered hobbies, and positive career moves. A few of our favorites: 

“Working from home almost 100% has provided me the opportunity to see my daughter walk for the first time (among many of her other firsts)!”—Alyssa A. 

“I'm immunodeficient, and quarantine has been a godsend for me. The extra sanitization and screening procedures, wearing masks, and people washing their hands have all helped me to NOT be sick for the first time in DECADES.” —Kelly W. 

“I've fallen in love all over again with my Covid lockdown partner, my wife of 30+ years.”—Terry F. (Editor's note: )

“I took 9 strokes off my USGA handicap!”—Adrian K. 

"I've learned I can experience the same amount of joy from walking in my local neighborhood as visiting grand marvels like the Grand Canyon. More importantly, I have befriended a cardinal named Roy. He stares into my soul daily looking through my window when I am WFH."—Taylor R.

"Losing a job I hated brought me to a job I love where I am valued more than I thought imaginable in a career.”—Jacob S. 

Thanks for sending in your good vibes. They filled our Tuesday with the best kind of slow-spreading smiles.

GAMES

Dow or No Dow?

We’ll give you a company; you have to determine whether it’s one of the 30 stocks in the Dow. Ready? 

1. Tesla 
2. Home Depot 
3. Visa 
4. Cisco 
5. Facebook 

ANSWERS

1. Tesla = no 
2. Home Depot = yes 
3. Visa = Yes
4. Cisco = Yes
5. Facebook = no

** A Note From Fidelity Fresh Invest

Morning Brew and Fidelity Investments are independent entities and are not legally affiliated.

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