Hey Snackers,
Another Halloween, another year of knockoff costumes. A few of our favorites: “Ten” from the hit show “Unusual Events.” “Evil Midweek Cutie” (definitely no relation to Wednesday Addams). “Fantastic Magician Boy” (who could it be?). Also a classic: “the rice is strange.”
Stocks rallied to end a turbulent week marked by iffy tech earnings and improving economic data (like: the US economy grew more than expected last quarter after shrinking). The S&P 500 gained 4% while the Dow surged nearly 6%, notching its fourth straight positive week.
Yesterday, Brazilian President Jair Bolsonaro narrowly lost his bid for a second term to Luiz Inácio Lula da Silva.
Memes become Monet paintings… A new kind of AI is transforming the way people create art and do business. Generative AI uses deep learning and tons of data to convert text prompts into images, videos, and articles. We made the image above using gen-AI and a text prompt.
Goofy images were only the start… Now entrepreneurs are putting gen-AI to work. 140+ gen-AI startups have launched in recent months: Jasper, which makes AI-generated blog posts, raised $125M at a $1.5B valuation last week. Companies can use it to automate copywriting (think: “a promotional post about air fryers in a friendly tone”). Other startups are auto-generating clothes, floorplans, and ad jingles. Microsoft added Dall-E to its design tools, and Shutterstock plans to use it to make stock images. But ethical concerns abound:
Highly visible = highly valuable… AI has many existing applications (think: self-driving cars, disease diagnosis, fraud protection),but it often operates behind the scenes. And yet generative AI has an accessible wow factor that’s already dazzled many. Some investors say it’ll be a huge industry: prominent VC firm Sequoia predicted that gen-AI could generate “trillions in value” and revolutionize industries that require humans to create original work.
Dressed up as Jerome Powell… because interest rates are terrifying. To be the Fed chair all you need are hiking clothes: America’s central bank is expected to raise rates by a “jumbo” 75 basis points on Wednesday — the fourth straight bump of that size. Soaring borrowing costs are spooking investors and raising recession red flags. Last week mortgage rates topped 7% for the first time in 20 years. But economists polled by Reuters said the Fed shouldn’t pause its hiking crusade till inflation drops to around half of its current level (a hot 8.2%).
Winter’s coming… While consumers are still feeling #PumpAnxiety, oil giants are still pumping record profits. Last week Exxon, Chevron, and Total demolished earnings with record results (Exxon took home a $20B profit). Analysts expect Marathon Petroleum and ConocoPhillips to deliver strong results when they report this week. Global oil and gas supplies are still tight from pandemic-era output cuts and the war in Ukraine. Now President Biden is urging Big Oil to boost production (and cut buybacks) ahead of winter.
Well, that was underwhelming… Tech stocks plunged last week after uninspiring third-quarter earnings. Google’s sales growth slowed big-time as ad spending sagged, while Meta’s revenue dropped for a second straight quarter (and profit plunged 52%). What really turned investors off: weak forecasts for this holiday quarter. Amazon expects sales to be up just 2% to 8% from last year (a major slowdown). As tech forecasts fall back to earth, investors are adjusting their expectations. Then again, lower expectations might mean less market disappointment.
Trick or treat… But retailers aren’t spooked by candy-flation. Go-tos like Walmart, Costco, and Lowe’s widened their spooky selection by about 20%. This year Halloween spend is expected to hit a record $10.6B ($2B more than prepandemic), with Americans paying an average of at least $100 for goodies like fun-size candy bags, pumpkin plates, and wacky wigs (FYI: Home Depot sold out of its viral $200 life-size skeleton in one day). Hershey is thriving on its sweet-and-salty strategy and expects Halloween candy to make up 10% of its annual sales.
Authors of this Snacks own: shares of Amazon, Block, Google, Microsoft, Walmart, Exxon, Starbucks, CVS, Moderna, Twitter, GM, and Uber
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