Hey Snackers,
Some like their kale shredded, and some like their art shredded: The famous Banksy painting that shredded itself after selling for $1.4M is now being sold for $25M — a new record for the artist. (BRB, ripping up our kindergarten masterpieces.)
US stocks ticked up slightly today, as investors balanced a strong kickoff to earnings season with inflation and supply-chain headaches. On the other side of the globe, China’s economy grew only 4.9% last quarter, a major slowdown from the previous quarter.
Thanks for connecting... Or not. Microsoft's LinkedIn is removing itself from China's network. The software giant is shutting down LinkedIn in China, citing the country's intensifying pressure to censor. FYI: China was LinkedIn’s third-largest market, with 50M+ users. Microsoft plans to launch a new China-specific version of LinkedIn this year, which won't include social features: no ability to share opinions, news articles, or "some personal news."
Great walls of fire... China’s “Great Firewall” monitors and censors online. Facebook and Twitter have been blocked in China since 2009, and Google left in 2010 after declining to censor search results. This year China blocked the social audio app Clubhouse and the encrypted chat app Signal. Some savvy internet users can access Western sites through VPNs, but many don’t.
It's a tale of two internets... The only way to get social in China is to get censored by China. The Great Firewall has created two internets operated by the world’s superpowers. For the US, China’s digital wall blocks a major business opportunity. For China, it’s hurting interest from US investors and biz partners. As China increasingly cracks down on its own tech companies, US companies are becoming even more wary of making the move.
Espresso machine delivery ETA… 124 days. Three (related) themes are defining earnings season for companies, from airlines to pizza chains. First, supply-chain snarls are curbing sales of retailers like Nike, which had to close some factories despite booming demand. Second, rising materials costs have led companies like Clorox to lower yearly profit forecasts. Third, labor shortages are compounding both those problems, with companies like FedEx blaming worker shortages for lower-than-expected sales. Expect these issues to continue into the holidays.
Catered bagels for the branch… Big banks reported tasty quarterly profits. Profits at consumer-focused Bank of America, Wells Fargo, and Citi boomed after the banks released billions in loan loss reserves set aside for defaults that never happened. A jump in credit-card spending helped Citi’s profits soar 48% from last year, while IPO and merger-palooza boosted profits at investment banking giants JPMorgan Chase and Morgan Stanley. Trading activity is expected to slow, so we’ll see if investment banks can keep profits pumping.
Cracked the dalgona candy... Whoops. Netflix gained a whopping 36M subscribers last year while you binged “Tiger King.” But that led to subscription saturation (#subscripturation), and slowing growth this year as non-couch activities return. Last quarter Netflix lost 400K subscribers in North America, which now makes up just 35% of customers. Investors want to know if Netflix’s new focus on foreign shows boosted subscribers when the Flix drops earnings on Thursday. FYI: Korean thriller "Squid Game" is Netflix’s best-performing show ever.
Self-driving PR... Tesla hit another delivery record last quarter, with 240K cars. In the previous quarter, Tesla raked in $12B in sales, nearly double from a year ago. For reference, Chinese EV-competitor Nio generated over $1B in Q2. Tesla recently launched full self-driving (think: reading stop signs and auto lane change) for select drivers, even though its Autopilot feature is in the hot seat with regulators. We’ll see if Tesla can keep up the record pace and manage its self-driving woes when it rolls up with earnings on Wednesday.
Authors of this Snacks own shares of: Microsoft, Netflix, Snap, Starbucks, Tesla, Snap, Google, and Chase
ID: 1879644