Wednesday Aug.03, 2022

✈️ Pelosi-China shivers

USA in Taipei (Taiwanese Foreign Ministry/Anadolu Agency/Getty Images)

Hey Snackers,

Some consumers see the can half full, while others see it fully empty: Tito’s Vodka is selling $20 DIY “canned cocktails” — in completely empty cans.

As inflation dries up savings, US household debt surpassed $16T for the first time last quarter (think: credit-card IOUs). Meanwhile, demand for US workers hit its lowest level in nine months in June — but total job openings still far outnumber available workers.

Visit

Nancy Pelosi’s historic visit to Taiwan draws China’s wrath, sending shivers across global markets

The plot thickens... House Speaker Nancy Pelosi landed in Taiwan yesterday, becoming the highest-ranking US official to visit the self-ruling island in 25 years. The visit, part of a broader Asia tour, is causing global drama. China has long claimed Taiwan and its population of 23M to be part of its territory, saying that reunification is its "historical task." Chinese President Xi Jinping has vowed to eventually take Taiwan back by any means. Pelosi wants to show support for the small democracy, and is set to meet with the Taiwanese president today.

China's response: Beijing staunchly opposed the trip, threatening consequences for the US. American officials said that China has been staging military drills, sending missiles near Taiwan, and boosting its military presence closer to the island.
America's response: President Biden can't really dictate where a member of Congress can travel (#SeparationOfPowers). But he did say: "I think that the military thinks it’s not a good idea right now.”

Interesting timing… US-China relations are at a precarious low, exacerbated by economic and military competition. Meanwhile, Russia’s invasion of Ukraine is far from over. China hasn’t overtly intervened on Russia’s behalf, but the two superpowers have their interests allied against the US. At the same time, China is a key trade partner: the US imports more from China than from any other country, and China is critical for US exports. Taiwan’s TSMC makes half of the world’s computer chips (including Apple’s).

Geopolitical tension is market kryptonite… Investors hate uncertainty, and the world is rife with it. China’s economy is tied to the world by a thread right now, and some fear Pelosi’s visit could be a pair of scissors. Escalating tensions with both Russia and China have investors on edge: global markets tumbled yesterday, from Hong Kong to New York.

Surge

Uber posts record revenue as the summer travel surge and gas avoidance rev up ride-hailing demand

Rise of WFU… work from Uber. Summer getaways and high gas prices have gifted Uber a five-star quarter. Uber shares surged 19% yesterday after the ride-hailer more than doubled its revenue to a record $8B last quarter, crushing expectations.

Backseat bliss: A record 122M riders and drivers used the app each month, fueling Uber’s first cash-flow-positive quarter.
Cold cuts: Uber’s delivery biz (mainly UberEats) grew 12%, but growth slowed from the year before as people ditched doorstep deliveries for boozy brunches.
Billion-dollar binge: Uber lost $2.6B on startup investments like Zomato and Grab, but execs say the overall biz is in its strongest position in years.

Looking for your UberX… in a sea of Camrys. From festival szn to IRL work happy hours, more consumers are turning to ride-hailing as outings return. Uber introduced a fuel surcharge in March to combat high pump prices, but it didn’t stop riders from splurging on private drivers. In May, Uber made an average of $87/per customer each month, a 60% jump from 2020.

Don't lose sight of your core biz… even when it falls through. While Eats was Uber’s MVP during the pandemic, its hailing biz has finally caught up. Uber’s ride segment finally surpassed Eats revenue in the first quarter and continued the trend in Q2. Now Uber’s recruiting new drivers ahead of a busy fall season by adding highly requested driver features like the ability to see fares up front. We’ll see whether the ride rebound is as strong for Lyft when it reports Thursday.

What else we’re Snackin’

Inspo: Two #moods: Pinterest reported its smallest sales growth in years as digital ad spending slows. But shares rose 12% after activist investor Elliott confirmed a 9% stake in the wholesome app.
Lost: Game over: sales and earnings fell last quarter at Activision Blizzard, which is on track to sell to Microsoft for $75B. Global game sales are expected to shrink this year as inflation cuts into spending.
Luxe: WeWork for the 1%: a chic coworking club called Colette that offers full-time office staff, temp-controlled offices, and omakase dining is heading to NYC. The cost of a first-year membership: $161K.
Blues: More turbulence: yesterday JetBlue reported unexpectedly huge losses as fuel costs kept rising. Last week it struck a deal to buy budget rival Spirit for the not-so-budget price of $3.8B.
Frenzy: Potentially hundreds of people exploited a software vulnerability to steal $190M in crypto from cross-chain bridge Nomad. Bridges are vital decentralized-finance infrastructure but are increasingly its weak link.

Wednesday

Earnings expected from Match Group, Toyota, CVS, Regeneron, Moderna, Yum! Brands, Occidental Petroleum, Clorox, MGM Resorts, GoDaddy, The New York Times, Scotts Miracle-Gro, Hostess, and Lucid

Authors of this Snacks own: shares of Microsoft, Uber, CVS, The New York Times, Spirit, Match, Moderna, and Apple

ID: 2334908

Latest Stories

Quitting time

Huge week in tech has market bouncing back

Yikes

10h

Feds launch new probe of Tesla recall

Alphabet’s record Q1

Search and Cloud continue to deliver, as Alphabet announces its first-ever dividend

William Coulman, David Crowther11h

America’s birth rate keeps dropping

Births in the US, like almost everywhere else, are on the decline

Millie Giles, David Crowther11h

Nestlé, the world’s largest food company, is struggling

William Coulman, David Crowther11h

Tangential remarks

Nicolai Tangen, the CEO who holds the purse strings of Norway’s $1.6 trillion sovereign wealth fund, thinks that his fellow Europeans don’t quite stack up to US employees when it comes to pure hustle, telling the Financial Times in a recent interview that there is a difference in “the general level of ambition” and that “the Americans just work harder”.

Tangen has clearly been putting his money — or more specifically Norway’s — where his mouth is: the sprawling Norwegian oil fund, now one of the largest investors on the planet, has been pumping more capital into its US holdings in the past decade, while decreasing its investment into European entities.

The troublesome news for our European readers? Tangen might be onto something. According to data from the OECD, American workers are putting in almost 60 hours a year more than the weighted average for OECD nations… a benchmark that workers from countries in the European Union are already ~180 hours shy of.

Europeans ‘less hard-working’ than Americans | FT

Rani Molla

13h

$2T is the new $1T

Alphabet’s phenomenal earnings yesterday was enough to push the search giant’s market cap beyond $2 trillion, joining the likes of NVIDIA, Apple, and Microsoft.

Air taxi Blade is actually an organ transport business in disguise

How the helicopter fleet quietly became America's biggest airborne ambulance.

Jack Raines13h

18h

NBA TV rights are finally up for grabs — with cable and streaming giants battling for the top spot

Nia Warfield

Read

18h

Southwest nurses its wounds as airlines continue to feel the Boeing sting

Max Knoblauch

Read

Friday, Apr 26th

18h

What’s happening

Pop Quiz!

Sales of what are up 136% since 2019?

Don't be a sucka

$70B

Alphabet shares are soaring in the after-market session, with a initial jump of more than 10% implying a gain of upwards of about $200B in market value when the stock opens tomorrow morning.

Google’s parent company crushed earnings expectations, initiated a cash dividend for the first time, and authorized a fresh $70B in share repurchases for good measure. The market likes it very much.

What’s up doc?

4/25/24

HOP TO IT

Joshua Topolsky

We get results!

4/25/24

This earnings season is fully operational

Balancing Act

4/25/24

Acrobatic Accounting

So, you want to join the circus?

Megan DeMatteo

Rani Molla

4/25/24

No, Apple hasn’t cut its Vision Pro production estimates in half

Quite a few news outlets are reporting that Apple thinks it’s only going to sell 400,000 to 450,000 Vision Pros in 2024, compared a “market consensus” of 700,000 to 800,000. They’re all citing a note from Apple analyst Ming-Chi Kuo.

Obviously there’s no question that Apple’s $3,500 face computer will have a limited audience and could be a huge flop, but this also doesn’t seem like accurate news.

The issue is that 1) this 400,000 number isn’t new. Back in July of 2023, the Financial Times reported that Apple planned to make fewer than 400,000 units in 2024, reducing its initial projections of 1M units, citing two people close to Apple and, the Chinese contract manufacturer assembling the device. 2) It's unclear who was estimating 700,000-800,000 Vision Pros in the first place, but it appears that it was Ming-Chi Kuo himself?