8 BARRON’S September 2, 2019
26,403.
Dow Industrials:+774.
Dow Global Index:+7.
10-year treasury note:-0.
BEYOND MEAT HITS KFC
Weathering the Storm
Stocks are being buffeted by trade
winds. They dove after President Don-
ald Trump threatened to force compa-
nies out of China and to raise tariffs on
Chinese goods, then climbed as he
walked much of that back. The result:
uncertainty, with the yield curve inver-
sion deepening at midweek. Despite
that, the Dow industrials on the week
surged 3%, to 26,403.28; the S&P 500
rose 2.8%, to 2926.46; and the Nasdaq
Composite popped 2.7%, to 7962.88.
Mixed Messaging
Trump suggested that he was rethink-
ing tariffs, only to be corrected by his
own administration. He then said
China was calling to seek a restart to
trade talks, only to have Chinese offi-
cials say no call had been made; it’s still
unclear who’s talking to whom. Trump
did announce a trade deal with Japan,
promising Japanese corn purchases in
exchange for going easy on Japanese
car imports to the U.S. The deal has yet
to be finalized.
Carney’s Virtual Currency
Although Federal Reserve Chairman
Jerome Powell got the headlines at
Jackson Hole, Wyo., the head of the
Bank of England, Mark Carney, may
have stirred the most provocative dis-
cussion. With trade conflicts in mind,
Carney proposed a digital virtual cur-
rency that would replace the dollar as
the world’s reserve currency. While
even Carney admitted that his plan was
unrealistic in the near term, St. Louis
Fed President James Bullard put it into
perspective: “The best [policy] would
be: get rid of the political uncertainty.
Then you wouldn’t have this issue.”
Paying for Opioids
An Oklahoma judge found Johnson &
Johnson responsible for abetting the
opioid crisis in that state, and hit the
drugmaker with a $572 million penalty.
J&J stock then rose, probably because
investors were happy that it was a lot
less than what the state had sought:
$17.5 billion. The case will be appealed.
Separately, the Sackler family, owners
of OxyContin maker Purdue Pharma,
are in talks to pay $3 billion to resolve
lawsuits, part of a $10 billion to $
billion settlement. The family would
give up ownership in Purdue, which
would file for Chapter 11.
Boris Shuts Parliament
Queen Elizabeth II granted United
Kingdom Prime Minister Boris John-
son’s request to suspend Parliament
until Oct. 14 after Parliament returns
from its August recess. Johnson in-
sisted he needed more time to gather
his “exciting new agenda,” but mem-
bers of Parliament argued that he was
trying to force through his approach to
Brexit by the Oct. 31 deadline.
A Hard Rain
Dorian, a potential Category 4 hurri-
cane, brushed Puerto Rico and ap-
peared headed to the Florida coast on
Labor Day. Meanwhile, The Wall Street
Journal reported the administration is
considering a plan to roll back rules on
methane emissions, despite opposition
from major energy companies.
Chicken, the
New Frontier
Holy alternative cow! Beyond Meat tested plant-based
fried chicken at a KFC in Atlanta, and the stuff sold out
in five hours. It was another win for the start-up, which
at last count had products in over 53,000 outlets. The
chicken foray also demonstrates that the alternative-
meat industry’s initial beef-mimicking products are just
the start for plant-based protein.
“We are truly on the tip of the iceberg,” says Danny
O’Malley, the “presiplant” of Before the Butcher, another
alternative-meat start-up. The company makes alterna-
tive chicken and pork, as well as alternative beef. O’Mal-
ley left food distributor Sysco for Beyond Meat, then
founded Before the Butcher. His company has products
in more than 2,000 retail outlets.
“There is no technical difficulty related to chicken
specifically,” says a spokeswoman for Impossible
Foods, another alt-meat producer. “The heme content
will be lower in chicken, as it will with other white
meats.” Impossible makes synthetic heme, which helps
the company mimic the flavor profile of animal-based
protein.
Despite Beyond Meat’s product expansion, Barron’s
continues to worry about new competition, its lofty val-
uation, and stock volatility. Still, the excitement across
the industry is palpable. Two weeks back, JPMorgan’s
Ken Goldman made the firm’s list of its most-read re-
search with a Beyond Meat upgrade. After KFC, the
stock is up 14% this past week. So far, investors’ appetite
for Beyond Meat shares equal diners’ desire to try alter-
native meat. —Al Root
1.91%
The yield on the 30-year Trea-
sury on Wednesday morning, an
all-time low.
$251 B
International tourism spending
in the U.S., one of the few areas
the U.S. runs a trade surplus.
47.8%
Increase in the value of aircraft
and parts in July, mostly attrib-
utable to Boeing. Overall durable
orders rose 2.1% for the month.
2 %
Seasonally adjusted annual
gross-domestic-product growth
rate in the second quarter,
down from 2.9% in 2018.
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THE NUMBERS
HE SAID
“If the conditions
are right,
then I would
anticipate we’ll
take advantage
of long-term
borrowing.”
Treasury Secretary Steven Mnuchin
on the possibility of issuing 50- or
100-year bonds
Nicole Fara Silver (KFC); Al Drago/Bloomberg (Mnuchin)REVIEW