Hey Snackers,
Important job alert: snack-maker Whisps is searching for its first Cheese Executive Officer. The delicious CEO will get paid to eat cheese and do cheese-related things. No formal training required: "Weâll teach you how to cheese the day." So bad, it's Gouda.
Stocks took a plunge yesterday on news of record new confirmed COVID infections in the USA. The Dow dropped 700 points and the Nasdaq snapped its 8-day win streak. Still, the S&P 500 is down only 6% for the year (compared to 31% in late March). But investors are worried about a 2nd economic shutdown. More on that below.
What a plant-based player... When it comes to alt-meat, Starbucks is not monogamous. After linking up with Beyond Meat in Canada and China, Starbucks has moved on to Impossible Foods sausage in the US. The Impossible Breakfast Sandwich will be available at 15K Starbucks stores - and it's all about the mass exposure:
Impossible wants to be "basic"... It doesn't want to be viewed as a niche alternative. But it's running into the (vegan) chicken and egg problem: to get more meat eaters, Impossible has to lower prices to compete with cheaper regular meat â but to lower prices, it needs a large mass of regular meat eaters. So big new partnerships are key.
The road to mass appeal could be rocky... First, Impossible has a bigger rival: Beyond Meat has a publicly traded $9.4B market value, compared to Impossible's ~$2B private valuation. Second, big consumer brands like Kellogg, Kraft, and Nestle have money to churn out cheaper alt-meat competitors (which they're already doing). Impossible thinks its quality is way better, but it needs growth ASAP to compete. It's already a viable acquisition target for these bigger brands, and may even be open to it.
COVID-19 data is the new econ data... In mid-March, markets plunged 30% on the alarming surge in coronavirus cases. Months of economic lockdown followed, and US COVID-19 cases slowed thanks to distancing measures. Investors took heart: markets swiftly rose in April and May, approaching record highs. This continued through June, as economies began to reopen. Yesterday, stocks took a health data plunge.
Not entirely surprising... It's not shocking that cases are rising as restaurants, bars, and gyms reopen across the US. However, cases in European countries appear to have fallen and are not surging again as countries reopen. "Public health guidance" in Europe can be perceived as "infringement of freedom" in America. Now the EU might even block US travelers from entering.
The longer the pandemic lasts, the longer tech stocks are likely to rally... The tech-heavy Nasdaqâs gain over the other major indexes is the biggest since 1983. This outperformance shows how fortunes have shifted dramatically in tech's favor during the corona-conomy.
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Disclosure: Authors of this Snacks own shares of Starbucks, Shopify, Beyond Meat, and Square, as well as put options of Disney.
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