The free-tuition dream 🎓
| 💸 COOLING ON CHINA 
Wall Street oracle-of-the-moment Cathie Wood is reportedly scaling back her exposure to Chinese companies. That is, for the investing world, a record-scratch moment.
Wood, the CEO of Ark Invest, doesn't like what she's seeing in Beijing's sweeping regulatory crackdown on private enterprise, according to the Financial Times.
KEY CONTEXT China's private sector has long been under strict government oversight, but the central government in Beijing has tightened its grip in recent months. For example, over the course of a single weekend last month, Beijing effectively wiped out the country's entire multibillion-dollar for-profit education industry. Authorities are also forcing tech companies to limit children to three hours of online gaming per week.
For Wood, those constraints signal that Chinese authorities are focused on social engineering at the expense of capital markets. The profitable, fast-growing businesses within China that have attracted billions from foreign investors now look increasingly risky.
"We have not eliminated our positions but we have reduced our positioning in China dramatically and we have swapped some of our holders, which became losers, into companies that we know are courting the government with 'common prosperity,'" Wood was quoted as saying by the FT.
WHY IT MATTERS Investors are watching Wood's every move right now. Her flagship Ark Innovation exchange-traded fund surged nearly 150% in 2020 and helped turn her into one of Wall Street's most talked-about investors. Although the fund has underperformed this year, it still comfortably outstrips annualized returns delivered by the S&P 500 over the past five years.
And Wood is also second high-profile investor this week to raise red flags about China's crackdown. Financier George Soros called out BlackRock in a Wall Street Journal op-ed Monday, calling the fund's push into China is "a tragic mistake."
All of this points to a sea change in China, which once seemed like an obvious play for foreign investors. There appears to be a growing fear that this is just the beginning of President Xi Jinping's push to ensure companies serve the Communist Party and the align with its social and economic agenda. #️⃣ NUMBER OF THE DAY 310,000 The number of first-time claims for jobless benefits fell to a new pandemic-era low of 310,000 last week. That's welcome news, and proof that the job market recovery is chugging along. Employment has been steadily recovering since the mass layoffs of 2020, but we're still more than 5 million jobs below pre-pandemic levels.
🎓 SCHOOL'S IN  The US labor market is so tight, employers are offering the kind of perks that were once unheard-of. Like, footing the bill for their workers' entire four-year college education.
THE NEWS Amazon became the latest behemoth to try to attract and retain workers with the carrot of free tuition. Starting in January, the company will offer to cover four-year college tuition, including fees and books, for most of its 750,000 hourly workers in the United States.
Walmart, which employees 1.5 million people, and Target, with 340,000 workers, have similar free-tuition programs via partner schools.
It's a pretty sweet deal: You get to keep working and earning a wage while getting a degree. That will be a life-changing opportunity for some. And when companies like Amazon and Walmart do a good thing, it helps set a precedent for the rest of Corporate America.
But… here's my two-cent big-picture concern about this kind of thing:
Private companies are increasingly taking up the baton that government has dropped – often because it's the right thing to do, and just as often because it looks like the right thing to do. But corporations are ultimately beholden to shareholders, not the voting public. It's not a bad thing for Amazon to try to solve a problem, but it's kinda bad if we, the people, rely on corporations — whose largesse is out of our control — to graciously step in where government has failed. The problem with getting a college degree in America is that tuition is stupidly expensive. Rather than hope Company X will foot the bill, we could, I dunno, demand that ultra-billionaires like Jeff Bezos pay a fairer share of taxes to fund public institutions like the rest of the developed world? Just a thought.
WHAT ELSE IS GOING ON? 🚗 Ford is ending production in India, laying off roughly 4,000 employees and and taking a $2 billion hit.
👓 Silicon Valley really isn't giving up on the dream of smart glasses. Facebook is the latest to get into the game, and it's partnered with Ray-Ban to make devices actual humans might want to wear. (Emphasis on might.)
🌮 Taco Bell is rolling out a nationwide pilot program for customers to send used sauce packets back through the mail to be recycled. 🐦 TWEET OF THE DAY   CNN BUSINESS NIGHTCAP You are receiving this newsletter because you're subscribed to CNN Business Nightcap.
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