Mood post CBD oat latte [Westend61 via Getty Images]
While we posted Insta stories of blurry fireworks and underwhelming cheers, Jeff Bezos shared his NYE moment: standing poolside among palm trees on a yacht, sporting a groovy disco fit. Some were unimpressed with the #look.
The techy Nasdaq had its worst week since last February, plunging 4.5% after the Fed’s latest meeting (more on that in a sec). The US added only 199K jobs in December — fewer than half of what was expected. Still, unemployment inched close to pre-pandemic levels. But an estimated 5M Americans could be isolating at home this week for Omicron, leaving many businesses scrambling.
Pre (and post) NYE test... Frequent Covid tests are becoming a necessity, from travel and family gatherings, to entering offices and schools. The US is logging record infections as Omicron surges and makes up 95% of cases. It’s nearly 4X as contagious as Delta among the vaxxed, but has been milder with fewer hospitalizations. Last month, a daily record of 2.3M Covid tests were performed in the US — not counting at-home swabs.
Testing is a pricey habit... especially for people with lower incomes. Free testing is available to everyone in the US through 20K government sites (or 1 per ~17K people). But with hours-long lines at free sites, many are turning to lab tests, which can cost $200+, or $25 home kits. Some of the corporations benefiting:
Testing is out of reach for many… while demand is soaring. Covid testing in the US isn’t easy or affordable when compared to testing in many developed countries. Across Europe, home kits cost much less and are widely available. UK residents can request seven free rapid tests at a time. Even Biden said he's "frustrated.” But some help is coming, like: additional testing sites in six states. Starting mid-January, those with private insurance can file reimbursement claims for home tests — but 150M+ Americans who aren’t privately insured won’t be eligible.
Fed-y to rumble... The Fed may end its stimulus early and hike interest rates by March to cool spiking prices. Refresher: Higher interest rates discourage borrowing/spending. Last week, the tech-y Nasdaq sank 5%, with Netflix down 11% and Twitter down 7%. Longer term, analysts say markets could slump 10 months after a rate hike. Plus, mortgage rates are at two-year highs, and inflation’s at a 39-year high. Relief is coming: Biden’s giving out $4.5B to help cover rising winter heating costs, while working to salvage his $1.7T social and climate spending bill.
Digi-Yuan vs. Dollar... Last week China launched a wallet app to expand use of its state-run digital currency (#DigiYuan) ahead of a national rollout. And WeChat owner Tencent, which has 1B+ users, said it’s joining ecomm giant JD.com in supporting the currency. China is positioning the digi-yuan for international use, starting with next month’s Beijing Olympics — and it’s pressuring companies like McDonald’s and Visa to accept it. As US and Chinese financial markets continue decoupling, digi-yuan could threaten the USD’s global dominance while the US debates its own digital dollar.
Vanilla hemp smoothies and THC-lagers... Weed stocks got a pandemic boost as millions toked up at home. Last year, US pot sales hit a record $24B as canna-connoisseurs in nearly half of states stocked up on legal bud. Weed giant Tilray, which reports earnings today, saw sales surge 43% last quarter on demand for its core pot biz, plus international growth through its Aphria merger. Now it’s investing “beyond the leaf” (think: buzzy brews, CBD oatmeal) to spark mainstream growth. Still, Tilray’s losses are piling up, and the stock fell 30% last month as investors grow impatient for federal legalization.
Racking up reward points… Chase, Wells Fargo, and Citi kick off bank earnings this week, as pandemic stimulus measures dry up. Last year, bank giants had record quarters on booming IPO activity and consumer spending — thanks to #stimulus, billions in expected loan defaults never happened. Bank stocks have boomed to ring in the new year as expected rate hikes could boost their balance sheets (think: more credit-card interest). But Omicron may take a toll on loan activity, which has just begun to rebound as consumers turn to credit to pay off bills and shopping orders. Nonetheless, analysts expect loan growth to continue this year.
Blood: Last week disgraced Theranos founder Elizabeth Holmes was convicted of defrauding investors, a rare fate for a tech exec. But despite Holmes’ Icarus moment, funding for US biotech startups has nearly tripled since 2015.
Chilled: Walmart plans to expand its “InHome” service — which delivers perishables like guac directly to your refrigerator — to 30M customers this year. The online grocery-delivery market’s predicted to hit $93B in 2022.
Giga: Tesla’s stock jumped 13% last Monday after the EV-maker said it delivered nearly 1M cars in 2021. But as rivals VW, Ford, GM, and Lucid double down on EVs, Tesla may need to build more Giga-factories to maintain its lead.
Liquid Death: sounds like a heavy-metal band or a new Four Loko flavor, actually a canned-water startup that just hit a $500M valuation.
Tune in to hear how the biz made magic out of water, aluminum, and marketing.
Authors of this Snacks own shares of: Walmart, Tesla, Delta, Netflix, GM, Twitter, and Ford