Hey Snackers,
Following his hit cooking show with Martha Stewart, Snoop Dogg is taking his culinary game to the next level. The rap icon — who already sells cookbooks, cannabis, and gin — is planning a hot dog brand that’s begging to happen: Snoop Doggs.
Stocks fell for the second week in a row, dragged down by tech. Quarterly profits fell at JPM Chase and Citi after a streak of strong profits last year. US retail spending and manufacturing dipped last month as Omicron surged. BTW: American households can order up to four free at-home Covid tests starting tomorrow on this website.
Vertical dancing > vertical integration... 17-year-old Charli D'Amelio earned more last year than the CEOs of Exxon, Starbucks, McDonald's, and Delta (sorry, Ed). D'Amelio is TikTok's #1 kidfluencer, or under-18 influencer whose fans are mainly kids. While TikTok doesn't share ad revenue, last year the D'Amelio fam converted Charli's 133M following into $17.5M worth of brand deals, product promos, and a clothing line. By comparison, median pay for S&P 500 CEOs was $13M (womp).
"Account managed by mom"... Instead of watching “SpongeBob” on TV cut by cereal commercials, iPhone-laden kids are consuming sponsored content from young influencers they idolize (Addison Rae vs. Hannah Montana). As internet usage skews younger, corporations are putting kidfluencers at the center of their marketing strategy. Last year the global kids digital ad market was worth $1.7B.
Kidfluencer culture is raising concerns… Advertisers are splurging to reach children beyond TVs, but often kids can’t distinguish between ads and content — especially on social apps. They can be subconsciously prompted to pine for the latest Hot Wheels or D’Amelio eyeshadow. Also: Kidfluencers aren’t as legally protected as child actors (e.g.: parents don’t need to set aside their earnings). Kidfluencer marketing is sparking backlash from regulators, who view it as deceptive and potentially psychologically harmful. US lawmakers recently proposed legislation to protect kids from manipulative social-media marketing.
The Great Sick-Out... The fast-spreading Omicron variant has left millions of workers stuck at home, with 700K+ new cases reported in the US daily. Grocery stores are operating with half their staff and empty shelves. Starbucks, Apple, Walmart, Lululemon, Macy's, and Nike have reduced store hours or temporarily closed locations. Meanwhile, a fifth of US hospitals are severely understaffed. But Omicron appears to have peaked in the UK, and could be peaking in the US. Pfizer says its Omicron vax will be ready by March, while President Biden is preparing Americans to accept Covid as part of normal life.
“House Hunters” IRL… Home sales spiked during the pandemic as Americans took advantage of record low mortgage rates and flocked to the ’burbs. Unprecedented demand and low inventory have pushed home prices to all-time highs. This month alone, the median price of a home jumped 16% to $365K. But the Fed is expected to hike interest rates several times this year, which would lead to higher borrowing costs for home buyers. While housing price growth should start cooling, experts predict demand to stay strong.
Hold the Biscoff cookies... Airlines have canceled 20K+ flights since Christmas because of Omicron-driven staffing shortages and bad weather. Delta recently reported a $408M loss for the holiday quarter, when thousands of workers called in sick. But the airline expects to return to profitability after the first quarter of this year, and predicts business travel will bounce back in the spring. We’ll see whether United, which is expected to post a quarterly loss on Thursday, also sees clearer skies ahead.
Not so pumped... about #PumpAnxiety. Oil prices jumped 40% last year, prompting Biden to offer an extra $4.5B to help low-income Americans with winter heating costs. Oil prices could hit $125/barrel this year, up from $50 last year. Soaring gas prices have benefited Schlumberger, the world’s largest oil-tech biz (think: giant robo drills). Schlumberger posted expectation-beating profits last quarter as customers like Chevron boosted production to meet demand. Schlumberger, which reports Friday, expects higher spending on its drilling tech as production revs up.
Authors of this Snacks own shares of: Amazon, Google, Netflix, Starbucks, Apple, Pfizer, Delta, Zynga, and Walmart
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