Three Things (1/6)

“What the Vail?”

Après strike … Skiers hoping for fresh powder at Park City Mountain are facing torturous lines and limited runs due to labor tensions between ski patrollers and Vail Resorts (MTN). The Park City Professional Ski Patrol Association, representing 200+ workers, walked out on Dec. 27 over wages. The union demands a $2 per hour raise, but Vail Resorts, which owns Park City, has countered with modest increases, frustrating workers. 

Just 23% of Park City’s mountain has been open during peak holiday weeks, causing many skiers to vocalize their champagne problems on X and elsewhere. Vail Resorts’ stock tumbled 6% last week, closing below $179, reflecting negative publicity and reduced operations.

Ski resort operations in the U.S. have been trending toward consolidation. Vail Resorts dominates the industry, owning 42 locations worldwide. Revenue stems primarily from lift tickets, season passes, and add-ons like dining, rentals, and ski schools. The company’s multi-mountain Epic Pass has been a financial win, but crowding complaints linger given its high price tag ($600 to ~$1,000 per season, depending on access level).

Climate change compounds the challenges. Warmer winters shorten seasons, and artificial snowmaking becomes both vital and costly. To adapt, resorts are employing preservation techniques and snow farming.

Talks between the patrollers and Vail corporate are ongoing, with a meeting slated for Jan. 9 that will include a federal mediator. Until then, the situation remains icy.

Steel standoff escalates

Trade tensions … President Joe Biden has officially blocked Nippon Steel’s $14.9 billion bid to acquire U.S. Steel (X), citing national security concerns. This decision came despite objections from some of his top advisers, including Treasury Secretary Janet Yellen and Secretary of State Antony Blinken, who emphasized Japan’s status as a key ally and investor in the United States. Japan’s government has called the move “incomprehensible,” warning it could deter future investments from key allies.

Biden’s move aligns with his pro-union stance, as U.S. Steelworkers had expressed skepticism about Nippon’s commitment to American jobs. However, not all workers agreed. Nippon pledged $2.7 billion to modernize aging plants and promised to maintain production capacity for a decade, but Biden prioritized keeping the company domestically-owned.

Nippon Steel made the bid to stabilize U.S. Steel, once a titan of American industry but now facing declining global rank. The company is at a crossroads, with debates over whether to invest in legacy blast furnaces or transition to more efficient electric arc furnaces, as competitors like Cleveland-Cliffs (CLF) and Nucor (NUE) have done.

The U.S. steel industry, valued at over $160 billion, has long been a cornerstone of infrastructure and defense. Though projected to grow, it faces challenges from global competition and carbon-reduction pressures. As President-elect Donald Trump prepares to take office, the future of U.S. Steel remains uncertain, with analysts speculating on a new round of bids or policy shifts under the incoming administration.

Housing market pileup

Supply surge … New data from Redfin (RDFN) reveals that housing supply in the U.S. has reached its highest level in four years. Active listings in November rose 12% year-over-year, driven by a growing number of unsold homes. Notably, more than 54% of these listings remained on the market for 60 days or longer, the largest share since 2019.

As a Redfin spokesperson put it: “There’s a lot of inventory, but it doesn’t feel like enough.” Redfin’s insights indicated that competitively priced homes sell quickly, while overpriced or outdated properties sit unsold for months. Florida and Texas lead in “stale inventory,” with cities like Miami and Austin seeing over 60% of listings linger unsold for over two months.

Migration trends further complicate the picture. States like Florida, Texas, Arkansas, and the Carolinas have seen an influx of movers seeking lower costs, spurring demand and driving up housing prices. In contrast, states like New York, New Jersey, and California are seeing the highest degree of outbound migration.

JK Moving, one of the largest moving companies in North America, adds additional context. President David Cox says that remote work and an aging population are key factors shaping demand. Seniors increasingly seek specialized housing, while remote workers reassess living arrangements. Cox predicts pent-up demand may drive a stronger housing market in 2025 as mortgage rates stabilize and buyers reenter the market.

One more thing: Coming up this Thursday, the December jobs report will give the first clear read on the labor market in 2025, with 150,000 job gains and a 4.2% unemployment rate expected. Investors are watching closely to see if the data supports optimism for the economy and stock market. With 73% of institutional managers predicting we'll avoid a recession, the report could set the tone for the year ahead.