✈️ Pelosi-China shivers

Wednesday, August 3, 2022 by Robinhood Snacks |
USA in Taipei (Taiwanese Foreign Ministry/Anadolu Agency/Getty Images)

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

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

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

Yesterday’s Market Moves
Dow Jones
32,396 (-1.23%)
S&P 500
4,091 (-0.67%)
Nasdaq
12,349 (-0.16%)
Bitcoin
$23,099 (-0.75%)

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

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).

THE TAKEAWAY

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

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.

THE TAKEAWAY

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.

Snack Fact of the Day

Tiger Woods reportedly turned down a $700M+ offer to play in the Saudi-funded LIV Golf series

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