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Voices are powerful things. At Vanguard, investors are also owners and their voices are heard. And now with investor choice, they have an even greater voice when investing. It's just another reason millions of investors have turned to Vanguard for 50 years. 50 million investors, 50 million voices Vanguard. Vanguard is owned by its funds, which are owned by Vanguard's fund shareholder clients. To learn more, visit vanguard.com, all investing is subject to risk. Vanguard Marketing Corporation distributor figure as of January 2025.
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What Walmart's longtime CEO stepping down means for the company's future. Plus, what's driving yet another volatile day in markets and how online retailer Quince is scraping the Internet in its quest to sell you cheaper cashmere sweaters.
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A lot of these digital first fast fashion brands that are really big now, they all have a very similar model where they're able to predict what shoppers are going to buy and then they operate in real time.
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It's Friday, November 14th. Alex I'm Alex Osola for the Wall Street Journal. This is the PM edition of what's news, the top headlines and business stories that move the world today. Walmart CEO Doug McMillan is stepping down after over a decade in the role, a change at the top of the country's largest retailer and private employer. Under his leadership, Walmart went from a struggling retailer with stagnant sales to an E Commerce rival to companies like Amazon with diverse revenue Stream. This is McMillan in an interview with the Stanford Graduate School of Business earlier this year.
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We eventually figured out what we wanted to do with E Commerce and now the growth rate's gone back up. We have a more sustainable business model and now we make money from membership, advertising and some other things that flow from that E Commerce investment, Walmart says.
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John Furner, company lifer and head of its US Division, will become the new Walmart CEO in February. For more on the transition and what it means for the company to WSJ reporter Chip Cutter, who covers management, joins me now. Chip under McMillan, Walmart raised wages for its workers, grew revenue, went big into E Commerce. How did he reshape the company?
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McMillan really tried to sort of reorient Walmart for the digital age. So he made a number of big acquisitions. Under McMillan, E Commerce Sales took off. There was also an attempt by McMillan to really change the image of Walmart and to change what it meant to work there. Walmart is, of course, the nation's largest private employer. He increased hourly wage wages and he tried to sort of increase employee retention to make it a place that people wanted to work and stay And I think a lot of his efforts, which have been rewarded by Wall street, have been focused on how do I modernize this company and just reflect sort of the way that people shop and consume.
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Now, Walmart hadn't indicated recently that a CEO transition was imminent. Does the change at the top suggest any shift in Walmart's strategy?
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It's hard to say. And of course, Furner has been a company employee for a long time now. So I think from the outside, it certainly is expected that Walmart will continue on its trajectory. Company executives have also been talking recently about how they do want to change the company to meet this AI moment that we're in. Recently, Walmart recently hired head of AI acceleration. And Macmillan had said the company was bracing for AI to change literally every job. Walmart knows that AI is going to change shopping, it's going to change work. And I think a lot, lot of the company's leaders are focused on that. We can certainly expect the next CEO to follow that and to help put some of those plans in place.
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How are Wall street and investors reacting to this news?
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Macmillan has had just an incredible run. Shares have risen more than 400% on a total return basis under his tenure. Certainly Furner is somebody who is known to the Wall street community. We'll have to see where he takes the company from here.
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That was Journal reporter Chip Cutter. Thank you, Chip.
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Thank you.
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President Trump says he will ask the Justice Department and the FBI to launch an investigation into Jeffrey Epstein's relationship with former President Bill Clinton and other Democrats posting on social media this morning. Trump said Democrats were focusing on his ties to Epstein to distract from their own political vulnerabilities. The president also says the Investigation should examine JPMorgan Chase. A representative for Clinton didn't immediately respond to a request for comment. Attorney General Pam Bondi says she asked Jay Clayton, the U.S. attorney for the Southern District of New York, to take the lead on the request. A JPMorgan Chase spokeswoman said the bank regrets its association with Epstein, but that it didn't help him commit any, quote, heinous acts. Democrats have sought to highlight ties between Trump and Epstein. And a bipartisan group of lawmakers is pushing for the release of the Justice Department's investigative files into Epstein. A vote on that in the House of Representatives is scheduled for next week. And in other news on the Trump administration, a classified Justice Department brief authorizing strikes on drug smuggling boats describes fentanyl as a potential chemical weapons threat. That's according to a member of the House and another person familiar with the memo. The document outlines the Trump administration's legal justification for the continuing military operation. It argues that President Trump's designation of drug cartels as foreign terrorists makes them legitimate military targets. The Pentagon has carried out 20 known strikes against boats it says are carrying illegal drugs in the Caribbean and the Pacific, killing at least 80 people. It has not made public any evidence supporting claims about the vessels. Since the first attack in September, relief over the end of the government shutdown has given way to investors concerns about lofty tech valuations and and whether the Federal Reserve will slow interest rate cuts. Here's David Uberti, who covers markets for the Journal.
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Well, there's been mounting concern since earning season, really, that some of these big bets on AI won't necessarily pay off. And that really varies by company, depending on what your capital expenditure plan might be and what you actually aim to do with AI. If you maybe are hemorrhaging money and are tied to OpenAI, which has not come close to turning a profit, for example, that could hurt your bottom line if you're a supplier to open. And those sorts of questions have been replicated across the sector. That said, not necessarily everyone who's thrown a lot of money into AI is down. So I think what you see increasingly this is sort of bifurcation and just rather than people throwing money at the theme broadly, a little bit more sort of interrogation of the underlying specifics of what these companies are actually spending and what they aim to do.
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Today's markets bounced around as tech stocks pared steep initial losses. The Nasdaq gained 0.1%, the Dow dropped 0.7%, and the S and P was slightly in the red. David says we can expect volatility to continue.
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The VIX has definitely been up the last couple of days. We're coming out of this longest government shutdown in US History. So people on Wall street, they're sort of waiting for this deluge of data to figure out what's actually happening in the US Economy. And that could come in like a very staccato set of data releases. So we'll understand what has happened, you know, September, October, November and December, just in a couple of weeks, rather than having that information spanned out over. So I think the long and short of it is that you should expect more volatility ahead.
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The federal government will release the first backlog monthly jobs report, the one for September next Thursday. More data is due to start flowing soon. Coming up, how does online retailer Quince always have what you're looking for? That's after the break.
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The US has reached a trade deal with Switzerland, reducing tariffs on the country from 39% to 15%. The deal includes Swiss companies relocating some manufacturing to the US and investing $200 billion in the US by the end of 2028. Here's US Trade Representative Jamison Greer speaking this morning on CNBC about what's in the deal.
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They're going to send a lot of their manufacturing here to the United States. You know, pharmaceuticals, gold smelting, you know, railway equipment. So we're really excited about that deal and what it means for American manufacturing.
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Trump shocked Switzerland in August when he imposed the 39% tariff. The country's economy, which relies on exports like watches, chocolate and medications, has strained under the tax, and Swiss officials and business executives have been pushing for a resolution. Today's deal comes after a charm offensive from Swiss business executives, whose efforts include an Oval Office meeting earlier this month when they brought President Trump an engraved gold bar and a Rolex desk clock immediately after the president ordered his administration to kickstart the stalled negotiations with the Swiss government. The White House says the deal with Switzerland will put it on a path to eliminate a trade imbalance with the US by 2028, and a white House spokesman said that, quote, the only special interest guiding President Trump's decision making is the best interest of the American people. We're exclusively reporting that Topgolf Callaway Brands is in talks to sell driving range operator topgolf to private equity firm Leonard Green. People familiar with the matter said that the deal would value Topgolf at about $1 billion. Leonard Green has already taken a small stake in Topgolf and given the company's management feedback on its business. Topgolf Callaway had said last year that it planned to split itself into two separate companies. If you've browsed for clothes online in the past few years, chances are you've seen products from a company called Quince. And if you're like me, you've been absolutely inundated with ads for the company's sweaters or sheets or boots. That's all part of its strategy. Find a hot item, price it cheaper, and then nab the shopper before they spend their money elsewhere. And this strategy seems to be working. Quint sells everything from tennis bracelets to pickleball sets to magnesium supplements. And it's expanding its offerings to food like wine, olive oil and coffee. The company has more than $1 billion in annual revenue and says it's nearly profitable. Javi Lever covers fashion and culture for the Journal and is here to tell us how Quince is doing this.
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Quince has been really strategic about finding exactly what you want and then making it at a lower price. So they have built proprietary technology where they are basically scraping the web, looking at what some of the best sellers are at all these top brands and making the stuff that everybody wants to buy.
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It seems preternaturally good at guessing what it is that people are looking for. Is that just a really good algorithm? Do they have excellent fashion sense? What's the secret sauce here?
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They were very careful about what it is that they built, but it sounds like it's a combination of predicting technology. For sure. There's AI involved in there. It's worth noting that a lot of these digital first fash fashion brands that are really big now, like Shein, like Cider, they all have a very similar model where they're able to predict what shoppers are going to buy and then they operate in real time.
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And how is it doing it so much more cheaply than other retailers?
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The CEO Sid Gupta told me that they have a couple of ways that they do this. First of all, they don't own factories, but they work directly with them. And they say that they cut out the middleman. So anyone in the process of making clothing, like sourcing fabrics or third parties to work with factories, and then they claim that they have less waste.
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I feel like the thing that always comes up with fast fashion is quality. What do outside experts say about their quality?
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I interviewed a manufacturing and sourcing expert, Melanie DeSalvo, and she thinks Quince is saving costs with production. So she thinks that the sewing is not as high quality. They're not using as much material. Quints, of course, they dispute this. They say that they operate on the highest of quality and that they're cutting costs with their business model and not with quality. And then if you talk to shoppers, some people said they love Quince and then some shoppers said that they were disappointed with the quality.
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That was WSJ reporter Javi Lieber. Thanks, Javi.
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Thank you.
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And that's what's news for this week. Tomorrow you can look out for our weekly markets wrap up. What's news in markets? Then on what's New Sunday, we'll look at whether we're entering a restaurant recession and whether young consumers pullback from fast, casual spots like sweetgreen and Cava could signal trouble for the broader economy. And we'll be back with our regular show on Monday morning. Today's show was produced by Pierre Bienname and Zoe Culkin, with supervising producer Tali Arbel. Michael Lavall wrote our theme music. Jessica Fenton is our technical manager, Aisha El Musleam is our development producer. Chris Zinsley is our deputy editor. And Falana Patterson is the Wall Street Journal's head of news audio. I'm Alex Osola. Thanks for listening.
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Here's Vanguard's Andy Reid, head of behavioral economics research, explaining why humans aren't necessarily wired for investing success.
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Being an expert in investing is rare. It's the exception to the rule. The average American lacks foundational knowledge, and they don't teach this stuff in schools. We're working on it, though. You've got people who are sort of, let's say, unskilled and unaware. So they're overconfident. They make really risky bets, they make more trades and they get worse performance.
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Get more insights from Vanguard on how you can navigate an uncertain market@vanguard.com.