Shopping spree
Up the down escalator at Macy's
Good morning, bargain hunters. This is your Stock Market Rundown for December 20th, 2023. Thanks for tagging along with me today. Let’s dig in:
TODAY’S TOP STORY: FROM GLAMOUR TO GLOOM
If you ever sat on a mall Santa’s knee as a young tot and reeled off your wish list, you were part of a tradition that started at Macy’s—the first-ever department-store Santa Claus made his debut at a Macy’s in New York City in 1862.
In the glory days of department stores, they were the go-to spot for everything from pantyhose to pyjamas. But over the past decade, retail sales at department stores have deflated faster than a Macy’s Thanksgiving Day Parade balloon that snagged on a traffic light.
While Macy’s has avoided the bankruptcies that hit Sears and JCPenney, it’s shrunk from 737 locations in 2015 to 566 today, and there’s no sign of a turnaround.
Modern consumers want convenient online shopping and stylish contemporary brands, not maze-like department stores with dowdy wares. The last time I was in a Macy’s I found myself wandering around like Indiana Jones looking for the Ark of the Covenant, except I was looking for Tummy Control Spanx.
Now, the latest news on Macy’s is that it might not be a public company for much longer. A group of investors just offered to buy it out for $5.8 billion. The offer values Macy’s at $21 per share, a big dip from its peak trading price of $73 per share back in 2015.
So if department stores are in terminal decline, why do these acquirers want to own Macy’s? It’s not the stores—it’s what's underneath them: real estate. The iconic Herald Square Macy’s location in New York City alone is worth $3 billion. These investors are more interested in selling off Macy’s property portfolio than they are in spritzing colognes at the fragrance counter.
SO WHAT ELSE IS GOING ON?
A year ago, many economists were predicting a recession, but as 2023 winds down, the economy is as strong as a gym bro on a tren cycle, with minimal layoffs and booming retail sales. The Fed’s recent statements signaled they’ll keep the party going by responding to any recession threat with fast and furious rate cuts.
The rim of a margarita glass isn’t the only place salt is an advantage. A startup called Kairos is building a nuclear reactor in Tennessee that will use molten fluoride salt as a coolant, which they say is safer than traditional water-cooled systems.
Moderna’s stock rose on positive data from a clinical trial of a drug it’s developing for melanoma, better known as skin cancer. Don’t forget the sunscreen, folks—especially you redheads.
Accounting firm PwC just banned its employees from flying business class, since a plane trip in a business-class seat is 50% more “carbon intensive”. However, being cramped in an economy seat is probably 50% more likely to give you deep vein thrombosis. Life really is all about tradeoffs, isn’t it?
That's today's scoop, friends; see you at our usual morning slot for another round. Yours in capitalism, The Axe
Got questions? Compliments? Want to advertise in Stock Market Rundown?
Hit me up at theaxe@stockmarketrundown.co