Hey Snackers,
Fleets are going the way of the Quibi: After barely a year, Twitter is shutting down its Stories feature, whose life proved to be as fleeting as its name. Cause of death: "low usage."
Jobless claims hit a new pandemic low, and New York manufacturing activity notched a July record. The techy Nasdaq index dipped yesterday, as investors shifted into stocks that tend to move in tandem with the health of the economy (aka: cyclical stocks).
Take it to the bank... Big Banks came through with expectation-beating earnings and booming profits. While the economy roared back to life last quarter, banks were busy making loans, collecting interest, and closing deals. That flurry of activity translated into big profits:
Bankers dropping bangers... Your quarterly reminder that Goldman's CEO is an EDM DJ. Last year, banks added billions in rainy day funds to their reserves. 17M Americans were newly unemployed, so banks set aside $$$ to prep for loan losses. Think: defaults on mortgages, credit cards, and biz loans. But economic healing happened faster than expected, so banks released those loan loss emergency funds.
A growing economy is a silver bullet for banks... and other cyclical stocks – aka: shares of companies that are closely tied to the health of the economy. Last year, banks were diving into fallout shelters, prepping for worst-case scenario bankruptcies and defaults. This year, banks are undoing that emergency prep. A key reason: the US economy is expected to grow at the fastest pace since the '80s this year. More money in American pockets means more $$$ in the coffers of US banks.
iCal it so I know it's real… Your backlog of doc appointments. As patients across the US rekindled their relationships with their doctors, UnitedHealth's quarterly revenue jumped 13% from last year. But profits at America's largest health insurer took a post-pandemic hit.
Re-United… and it feels so "meh." Most industries are thrilled to see customers return — that’s not necessarily the case for health insurers. Insurers encourage preventive visits, which help avoid expensive – and dangerous – problems like heart disease or cancer. But they might prefer not to see customers go in for non-urgent visits like check-ups, and even pay big bucks to keep them away. That's why...
Sometimes, not spending is good business… and can help boost the bottom line. The health insurance biz has a classic “do less” model: Just like Olive Garden doesn’t really want you to spend that gift certificate, health insurers often make less money the more their customers use their services. Ditto for car insurance companies.
Authors of this Snacks own shares of: Chase
ID: 1724710