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The Future is Now

The market continued to drift lower this week amid a general anxiety that seems to be building.  The news this week wasn’t any different than that of the past month, but investors seem nonetheless uneasy.  Despite economic data showing slow but positive improvement, it seems headline news will be the driving force behind investor sentiment up to the election and perhaps through to the inauguration.  This is an unusual year in so many ways.  From an impeachment to a pandemic to a presidential election, we’ve all been through a lot.  Unfortunately, we have one more hurdle ahead, and its uncertainty will undoubtedly cause more volatility in the weeks to come.

While there wasn’t much in the way of news this week, there was one theme that I kept coming across. It seems energy is something on everyone’s mind, and specifically the need to reduce carbon emissions. The first story came early in the week when Shell, BP, and Eni announced plans to reduce their focus on oil and gas in the coming decade in favor of new low-carbon businesses. Come again? Next up was a story about how PepsiCo has set a target to source 100% renewable energy across all its company-owned operations globally by 2030. Okay, so not the first company to announce plans like this. But when I heard Airbus has plans to build a zero-emission plane by 2035 using hydrogen as the primary source of power I went, huh? Not to be glib, but the last time hydrogen was used for air travel, it didn’t go so well for the Hindenburg. And last but not least, General Electric reported its intention to exit the coal power market in favor of its wind turbine business. The times are changing, perhaps faster than we had imagined.

In company news, we learned this week that Lowe’s will install self-pickup lockers at all U.S. stores over the next six months. I’ve seen these types of arrangements at stores like Whole Foods and Kohl's but was left a little surprised that Lowe’s would go this route. I’m not sure how many 2x4’s will fit in one of those lockers! In other news, Coca-Cola is jumping on the hard seltzer bandwagon by the middle of next year. Perhaps a bit late to the party, but the hard seltzer market is the fastest growing segment largely dominated by White Claw and Truly. I’ve tried a few of these drinks this summer, and honestly can’t see the appeal. Having said that, I am probably not the target market for these types of drinks. And lastly, Walmart is on track to begin offering its own membership program named Walmart+. One thing that cannot be said of this retail behemoth is that it doesn’t innovate. Just last week it, along with Oracle, reached an agreement to purchase the U.S. assets of TikTok to gain a foothold into the fastest growing social media platform targeting young people. Sorry Facebook. Analysts see this move to a membership model adding incrementally to sales and adding healthy growth to its eCommerce segment. The company anticipates 10 million members by the end of next year. Like I said above, the times are changing.

In closing, I turn to a product announcement this week that definitely demonstrates how the world is becoming more futuristic every day.  Amazon had its Fall 2020 event this week during which it introduced a host of product updates, including the Amazon Echo line of products and Fire devices.  However, the one that caught my eye was a security drone that will fly around the inside of your home while you’re away.  Essentially, it is your own personal security drone (which honestly gave me visions of both Blade Runner and RoboCop).  If it hears a noise that appear suspicious, it will autonomously fly to that location inside your home, notify you on your smartphone, and provide a live video stream of what is happening.  It may take me a while to get over the fear that our robot overlords will one day take over, but it seems like we’re one step closer.  Now you know.

Bruce J. Mason, MBA