🥤 Coke's anti-Netflix earnings

No more halftime truck-sized sodas... Coca-Cola's sales plunged 28% last quarter and profits plopped 30%. Over half of Coke's sales come from "away-from-home" venues — think: restaurants, sports stadiums, and movie theaters. Since those were corona-closed, expectations for Coke were pretty low. Coke stock actually jumped after the news because:

• The worst is over, according to Coke's CFO. The April-June quarter put sales through the wringer, but he thinks the only place to go from that bottom is up.
• Coke's sales improved in May and June as lockdown measures eased and businesses started reopening around the world. Investors like the way this is trending.

The anti-Netflix earnings report... Coke's earnings (and their effect on its stock) were the opposite of what we just saw with Netflix. The lockdown hero beat on sales and added 10M new paying subscribers, crushing the 8.2M expected. Buuut...

• Netflix stock plunged 11% because the streamer expects new subscriber growth will majorly slow this quarter to just 2.5M new subs.
• Netflix added 26M new subscribers in the first two quarters of 2020. For reference: it added 28M in 2019 in total.
• The best is over for Netflix... At least, that's what investors think. The accelerated growth Netflix experienced in the corona-conomy will likely take away growth from this quarter. Netflix's disappointing forecast validated that.

Angela Merkel must've watched Hamilton... EU leaders just agreed on a €1.8T ($2T) stimulus package to support their ailing economy. The Eurozone economy shrank 14.4% this year, compared to America's 4.8% drop. Months-long lockdowns and near-zero tourism crushed the bloc. Enter...

• The package: $450B offered as grants (aka "free" money) and $415B as loans (aka debt). Also: $1.15T for a joint EU budget that'll run from 2021-2027.
• The goal: Mediterranean countries were hit way harder than Northern ones. The package is meant to help them recover while not racking up insane amounts of debt.
• The opposition: Some members (cough, the Netherlands) worry the deal could turn the EU into a money-transfer union, where richer states bail out more indebted ones.

"I'm just like my countr(ies)"... Europe isn't young or particularly scrappy, but it's hungry...for relief. ICYMI, Hamilton (aka the US' 1st Treasury secretary) got the US federal government to absorb states' debt. The EU is kinda emulating this:

• It's the EU's 1st big issuance of common debt. The EU has a monetary union, not a fiscal union. 19 of the EU's 17 countries share the Euro as a common currency, and the European Central Bank controls interest rates and money supply (like the Fed in the US).
• Member countries usually do their own fiscal policy. That involves things like taxation and government spending.
• This unprecedented fiscal partnership could tighten the economic bond. Buuut: it still needs approval by individual parliaments.

My lil' pumpkin spice Frappuccino... Starbucks wants more of your monogamous coffee love. To make sure that all 67 of the cold brews you consume per week come from its stores, Starbs launched its mobile reward program in 2009. It was a pioneer in the (then new) world of reward apps. Now it has sneakily become the fintech product of caffeine:

• Over 19M Americans are active Starbucks Rewards Members. In 2019, the Starbucks Rewards app was the most popular mobile payment app in the US.
• A shocking 48% of Starbucks' sales in May came from Rewards members thanks to corona-conomy mobile orders.

Getting even more intimate... with your wallet. Before, you had to digitally preload a Starbucks Rewards card to pay. Starbucks just announced you can link your credit/debit card and pay directly in-app this fall. You can also order on mobile, then pay with cash in person and still get "Stars". FYI: the new payment options give you half the points you'd get using a preloaded card.

• Defining the relationship with customers is more important than ever when Starbucks expects sales to fall ~15% this year. Mobile-order perks are a way to reignite the spark at reopened locations.
• Starbucks isn't the only one putting a ring on it: Wendy's just became the 1st big burger chain to launch a food-based rewards program. Panera, which has a whopping 40M loyalty members, is giving MyPanera+ Coffee subscribers unlimited brews through fall.

• Spotlight: Spotify launches video podcasts worldwide — all users can watch vids or scroll their phone while the video audio plays in the background (burn to YouTube).
• GiAnt: Alibaba's fintech arm Ant Pay goes for a dual IPO that could value it at over $200B (more than Goldman and Wells Fargo combined).
• Green: Apple says its supply chain and products will be 100% carbon neutral by 2030.
• Out: Microsoft-owned LinkedIn will cut 6% of its workforce (almost 1K jobs) as hiring slows in the corona-conomy.
• Locked: Lockheed Martin, the world's biggest defense company, raises its 2020 profit expectations (it spent billions on corona-related costs, but the Pentagon is covering those).
• OhSnap: Snap shares plunged on word its quarterly loss increased 28% from last year, though daily active users jumped 17%.

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• Earnings expected from Tesla, Microsoft, Chipotle, PG&E, and Equifax

Disclosure: Authors of this Snacks own shares of Starbucks, Amazon, Chipotle, and Spotify

ID: 1253433