Philip Morris Straps On Its White Hat

Plus: Why is JP Morgan chasing the uber wealthy? Because the rich got richer ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

May 31, 2023

Read in Browser

TOGETHER WITH

Good morning.

California legislators are seeing red.

The Golden State’s state assembly passed a bill on Tuesday banning the use of five chemical additives in food products, including the commonly-used Red 3, a coloring dye which has been linked to cancer in test lab animals, as well as titanium dioxide, a coloring agent used in Skittles. We’re perfectly fine with that so long as it doesn’t change the taste of the little yellow and green Skittles.

Morning Brief

•

Musk wants US and China to kiss and make up.

•

Philip Morris realizes smoking isn’t cool anymore.

•

JPMorgan keeps chasing wealth.

International

Elon Musk Visits Beijing, Calls for Better US-China Relationship

“Decoupling” is not even in Elon Musk’s vocabulary.

Musk met with Chinese leaders yesterday to discuss expanding Tesla’s presence in the country and emphasize the importance of US-China relations. But Musk is as ever the contrarian as more and more Western investors retreat from China.

Stuck on You

In 2022, strict border controls and covid lockdowns continued to impede foreign investors looking to do business in China. Nikkei reported that foreign direct investment into China totaled just $42.5 billion between July and December 2022, a 73% decline on the year and the sharpest drop since 1999. But once China did away with its zero-covid policy, FDI bounced back, slightly. The Ministry of Commerce reported nearly $58 billion in foreign investment for the first quarter of 2023, a roughly 6% increase from last year’s historic drought.

Still, Beijing and DC continue to pour hundreds of billions of dollars into industries like electric vehicles, microchips, and energy in their respective countries, both boasting they’re well on their separate ways to, if not self-sufficiency, than at least being less reliant on each other. To Musk, that’s not an option. During his meeting with China’s Foreign Minister Qin Gang, Musk described the US and China as “conjoined twins,” according to statements from the ministry. And with Tesla developing a new “Megapack” factory in Shanghai, Musk would like to see the two nations do a better job of working things out.

Yet, in a time filled with spy balloon shenanigans, supply chain disruptions, intense oversight, and cut-throat competition, many Western institutions are thinking twice about China:

•

During a private equity conference in Hong Kong on Tuesday, Goldman Sachs’ Asia-Pacific asset manager, Stephanie Hui, said she doesn’t conduct any fundraising in the US anymore. A spokesperson for the bank told the Financial Times that Hui was referring to North American investors’ wariness about pouring money into Chinese ventures and businesses as political and economic tensions mount.

•

According to a recent American Chamber of Commerce in China survey, 2023 marks the first time in 25 years that China is not a top three investment priority for a majority of US firms. “A year ago, 60% of companies said China was the top or a top three investment priority and this year that’s fallen to 45%,” Michael Hart, president of the organization, told Bloomberg. “China is falling in the rankings as a place for people to invest globally.”

Get Out: America’s not the only one looking for the exit. Earlier this year, both the British Columbia Investment Management Corporation and the Ontario Teachers’ Pension Plan — funds worth hundreds of billions — hit pause on direct investments into China. Meanwhile Italy is considering leaving China’s Belt and Road Initiative, and Taiwanese companies’ investments into China dropped more than 10% year-over-year in the first quarter. But they’ll always have Elon.

– Griffin Kelly

ESG

Philip Morris Dreams of Becoming an ESG Stock

The company behind Marlboro cigarettes wants you — and more importantly, investors — to know they’re gonna be better cowboys.

Philip Morris International CEO Jacek Olczak gave an interview to the Financial Times on Tuesday, in which he said PMI is on track to becoming an ESG stock as the company retreats from cigarettes and shifts toward vaping. For anyone who’s had a popcorn-scented vapor smack them in the face during a stroll, that might not position PMI as a force for good.

Are We The Baddies?

If you’re asking yourself why one of the world’s biggest tobacco companies is bothering to play the ESG card, the FT has your answer. Some major investment entities have shed their PMI stock because of their own ESG policies, so if the company could re-classify itself, it might be able to get back in their good graces and, by extension, their portfolios.

Olczak told the FT PMI has been tentatively talking to some of the asset managers who cut it loose recently, and those talks gave him hope. “I’m not saying that they are building a position in Philip Morris […] but the asset managers will not spend the time on talking with you if they don’t have in mind that one day is coming that they should reconsider the exclusion,” he said.

Olczak argued the company’s renewed focus on reduced-risk products like vapes means it’s in with a chance. Maybe. While vaping is not as bad for you as smoking, it’s not harmless and regulators are starting to close in on it:

•

The UK government on Tuesday announced a crackdown on underage vaping. The new crackdown will restrict marketing aimed at children as well as ban free samples for under-18s, which to be honest we’re surprised was a thing in the first place.

•

Earlier this month Australia announced a ban on recreational vaping, trying to limit vaping as much as possible so it’s only used by people trying to quit smoking. The crackdown includes stopping imports of non-prescription products, outlawing funky flavors, and banning bright packaging.

Not Pulling Punches: Australia’s Health Minister Mark Butler smoked out tobacco companies when the ban was announced. “Just like they did with smoking […] ‘Big Tobacco’ has taken another addictive product, wrapped it in shiny packaging and added sweet flavors to create a new generation of nicotine addicts.”

– Isobel Asher Hamilton

SPONSORED BY INCOGNI

Stop Spam Calls at the Source

You know those infuriating calls trying to convince you there’s an issue with your car warranty? The ones that send even the most zen among us into an expletive-filled rage?

If you want to stop them, you have three options:

•

1) Throw your phone into the ocean

•

2) Block unknown callers – but keep having to comb through spam voicemails

•

3) Stop spammers from getting your number in the first place with Incogni

We highly recommend option 3, and not just because electronic garbage is bad for aquatic life.

Incogni’s automated personal information removal service can sniff out the data brokers providing your info to the scammers – then force them to remove it. Plus, Incogni will reduce the number of spam emails in your inbox.

Incogni navigates data companies’ byzantine systems for requesting information removal, so you don’t have to – and they restart the process every three months, so your personal information stays out of scammy hands.

Get started with Incogni right here.

Wealth

JPMorgan is Building Out its Ultra-Wealth Management Division

Succession’s Roy family may not have found a happy ending, but at least they have a place to stash all those billions of dollars that have posed such a big problem for their family dynamic.

JPMorgan is slowly but surely expanding the services of internal unit 23 Wall, a division dedicated to managing the wealth of the uber-rich, according to a report Tuesday from Bloomberg, expanding its reach in one of banking’s most hotly contested corners.

Ultra-Wealth Makes Health

When we say uber-rich, we mean it. 23 Wall doesn’t have a minimum wealth threshold, but that’s because it’s an “if you have to ask what the unlisted price is, you can’t afford it” type situation. The unit is tailored to servicing the world’s richest 0.01%, or, more specifically, roughly 700 families worth more than $4.5 trillion, division head Andy Cohen told Bloomberg.

And, surprise surprise, it’s a clientele group that just keeps getting richer. Inflation, deteriorating supply chains, and Jerome Powell’s rate-hiking campaign have left a scant impact on society’s upper-crust — so far this year, the 500 richest people in the world have seen their collective wealth increase by roughly half a trillion dollars, according to the Bloomberg Billionaires Index.

Wealth management has now long been considered an important driver of growth for banking’s biggest players. It’s no wonder, then, that JPMorgan is diving headfirst in the race to win the ultra-wealthy’s trust (and trusts):

•

The division now houses offices in over 12 cities across six countries, with roughly half of its clients coming from outside of the US.

•

“Our typical clients have portfolios of public and private assets, real estate and a vested interest in community and philanthropy, all with an ever-increasing interest in private deals,” Cohen told Bloomberg.

Tasty Morsels: Still, the unit is just a part of the bank’s overall push into the lucrative world of wealth management. Last year saw roughly one new client a day with assets worth at least $100 million, Mary Erdoes, JPMorgan’s CEO of asset and wealth management, said at last week’s investor day, adding that in the past 10 weeks alone, over 40,000 new accounts have been opened in JPMorgan’s private bank. They may not have taken any pleasure in Silicon Valley Bank’s implosion, but they sure are benefitting from it.

– Brian Boyle

Extra Upside

•

Hasta la vista, climate change: Arnold Schwarzenegger says call it pollution.

•

You’re in the club now: Nvidia hits the $1 trillion market cap.

•

A discount on solving your problems? That’s like rewards points for a day off or getting a bonus for having a tasty lunch. It’s also what BetterHelp is offering – 25% off your first month of therapy (over $50 in savings). You can get matched with one of over 32,000 licensed therapists in as little as 48 hours. Get started with BetterHelp right here.*

*Partner.

Just For Fun

Search party.

Strike a pose.

ADVERTISE // CAREERS

No longer want to receive these emails? Unsubscribe here.

//campaignmonitornewsletter.everestengagement.com/ea/BntD2QJCyg/?e=postie@btcnews.com.au’ width=’1′ height=’1′ style=”margin-top:0 !important;margin-bottom:0 !important;margin-right:0 !important;margin-left:0 !important;padding-top:0 !important;padding-bottom:0 !important;padding-right:0 !important;padding-left:0 !important;border-width:0 !important;height:1px !important;width:1px !important;-ms-interpolation-mode:bicubic;” />