🧪 Covid-testing $$$

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.

• US officials stress the importance of self-testing, but kits are in short supply.To ease the crunch, the Biden admin said it would send 500M free at-home tests to Americans (that’s less than two/person).
• The ordering website is expected to launch this month. Meanwhile, the president told people desperate for tests to "Google it."

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:

• Retailers: Kroger and Walmart have hiked prices on at-home tests (from $14 for a two-pack to $24). Meanwhile, Walgreens raised its forecast after notching $3.6B in quarterly profit, as shoppers rushed in for at-home and on-site swabs.
• Test makers: Rapid tests can cost a few dollars to make, but companies like Abbott and Quidel have seen stunning sales. Abbott tripled quarterly profits last year after its BinaxNow Covid self-test kit became a top seller.
• Lab companies, which process PCR tests: Labcorp’s profit surged by 40%, to $4.2B, in the first nine months of 2021. When the testing boom started, in late 2020, Quest Diagnostic’s quarterly profit doubled while Abbotts’ tripled.

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.

• Innovate: From mind-controlled and invisible earbuds to cars that change color with the weather, this year's CES showed off the latest (and strangest) tech from around the world.
• Donate: Instead of fundraising, some nonprofits are dataraising — asking people and companies to chip in with data instead of cash. Think: an app that collects amateur bird-watching pics to power biodiversity trackers.
• Primed: Cosmetics brands are snatching up tech companies as personalization becomes beauty’s chicest power play. Like: AR and AI tech that let you virtually try on that lipstick or color-match foundation.

• Monday: Earnings expected from: Tilray, Commercial Metals, and Accolade
• Tuesday: Earnings expected from: Albertsons
• Wednesday: Federal budget. Earnings expected from: Infosys, IHS Markit, and KB Home
• Thursday: Weekly jobless claims. Earnings expected from: TSMC and Delta
• Friday: December retail sales. Earnings expected from: JPMorgan Chase, Wells Fargo, BlackRock, Citigroup, and First Republic

Authors of this Snacks own shares of: Walmart, Tesla, Delta, Netflix, GM, Twitter, and Ford

ID: 1981102