Hey Snackers,
The anonymous bidder who pledged $28M for a seat on Jeff Bezos' Blue Origin flight can no longer travel to space due to "scheduling conflicts." Now, an 18-year-old will become the youngest person in space after his dad snagged the ticket as a gift. Casual.
Stocks snapped their three-week hot streak, falling for the week despite reassurance from Fed Chairman Jerome Powell that he expects inflation to cool down.
Cue: Tokyo Drift from Fast & Furious... Except, not so fast. After a year-long pandemic postponement, the 2020 Olympics kick off this Friday in Tokyo — and they're now called the 2021 Olympics. Some key numbers:
You don't have to bring home the gold... if it's already home. For decades, hosting the Olympics has been a source of national pride. But while the Olympics are touted as an engine of economic growth and urban revitalization, the economic benefits of hosting aren't clear. Evidence points to no real change in economic activity for host countries — but very real costs.
The Olympic economy is an unequal ecosystem... While Japan would've taken an even bigger financial hit by cancelling, it still stands to lose the most. The Japanese hospitality and transportation sector is expected to lose up to $1.4B. Meanwhile, the IOC is poised to make $4B in television rights income, despite zero attendees. Companies with broadcast rights will be fine, too: NBCUniversal has already beat the $1.2B it earned for Rio ads. But sponsors like Asahi will get less bang for their buck without the ability to get stadiums of spectators chugging the “Tokyo 2020 Official Beer.”
Check the succulent receipts... Consumer prices jumped 5.4% in June from last year, accelerating at the fastest pace since 2008. A few examples: car and truck rental prices (+88%), women's dresses (+16%), and indoor plants (+5%). Fed Chairman Jerome Powell expects this inflation could be a one-time price increase as the economy rebounds. But for lower-income consumers, a spike in the price of meat, milk, or clothes can make a big difference.
The "secret" stimulus... A super-charged child tax credit. Last week, the US government started sending parents monthly checks for each child they have. Each month for the rest of 2021, eligible parents can expect $250 or $300 per kid, depending on their age. 39M households will receive payments, covering 88% of US children. Pandemic stimulus checks boosted spending at go-to chains like Walmart, Costco, TJ Maxx and Target. This monthly child "allowance" could provide a similar boost to family-favorite retailers.
Shoot your shot... Johnson & Johnson reports earnings on Wednesday, but don't expect a major boost from vax sales: unlike Moderna and Pfizer, J&J pledged to sell its vaccine "at cost" (read: no profit). Out of $22B+ in sales last quarter, Covid vaccines made up just $100M of J&J's revenue — or roughly 2%. The no-profit approach could help J&J from a PR perspective. Not helpful: last week J&J recalled several Neutrogena and Aveeno spray sunscreens over a possible cancer risk, and it's dealing with lawsuits from its baby powder scandal.
Ghosted like a Fleet... Twitter and Snap kick off social media earnings on Thursday. In February, Snap got investors excited by saying it expects 50% annual sales growth for the next several years. Meanwhile, Twitter's yearly sales growth pales in comparison to Snap and Facebook's. It's been struggling to gain users, and it just killed its Stories feature "Fleets." More broadly, social media platforms continue to face criticism from regulators and customers for failing to police hate speech and misinformation. TBD if that'll hurt the bottom line.
Authors of this Snacks own shares of: Snap and Moderna
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