Hey Snackers,
Nearly half of Americans would give up a work holiday to have the Monday after the Super Bowl be declared its own holiday — instead, we have Valentine’s Day.
We’re celebrating love today, but yesterday Los Angeles celebrated the Rams’s big Bowl win. Some highlights: Matthew Stafford’s game-winning TD pass to Cooper Kupp with 1:25 left on the clock, and the return of Dr. Evil in GM's EV ad (iron pinkie included).
Stocks fell for the week on news that inflation hit a four-decade high and growing Russia-Ukraine tension. On Friday the White House said it believed Russia could invade Ukraine at any time. The unrest could spark a trade war. Also on Friday, the tech-heavy Nasdaq index lost nearly 3%.
Mr. Loan-ly... President Biden campaigned on promises of student-loan forgiveness and free college — so far, they haven't panned out. Last week, first lady Jill Biden admitted that her push for free community college is over (for now). The plan’s been scrapped from the massive “Build Back Better” spending bill that Dems are struggling to pass. Broad loan forgiveness could be next.
The price is not right... After a nearly two-year pause, Americans will have to start repaying $400/month, on average, in student loans, while inflation has hit a 40-year high. Rising wages have not kept up with rising prices, and loans could make it even harder to pay the bills. For context: 12% of public-college grads still owe more than $40K. And nearly half of graduates of for-profit schools have defaulted. Meanwhile, two-thirds of community-college grads leave with zero debt.
Loan forgiveness isn’t the underlying problem… the cost of US colleges is. The average cost of a private college is $38K/year; for public colleges, it’s $23K for out-of-staters. Average tuition and fees have nearly doubled since 2010. Broad loan cancellation would cost the US gov’t $60B/year in interest alone, and require big tax hikes to recoup. Since college is so pricey, loans would have to be forgiven all over again in an unsustainable cycle. Last month, Education Secretary Miguel Cardona laid out plans to make college more affordable — but didn’t mention broad forgiveness. Meanwhile, college enrollment keeps sliding.
Pelosi-Tok… House Speaker Nancy Pelosi and her VC husband are TikTok-famous for beating the market with their stock trading, a practice she’s defended to voters. There’s been growing criticism of lawmakers’ freedom to trade because they literally shape the law. Last year 55 lawmakers reportedly failed to disclose their trades. Politico reported that members of Congress sold travel stocks like Royal Caribbean and bought pharma stocks like Moderna in early 2020 while downplaying Covid. So last week Pelosi OK’d a proposal to bar Congress from trading. The House is set to vote by November, but not all members support it.
Not-so-value meal... From cereal and bacon to gas and cars, prices have soared at the fastest rate in 40 years. Inflation’s starting to dent corporate profits across industries: Toyota saw earnings drop 20% last quarter on chip shortages. Yum Brands (owner of KFC, Taco Bell, and Pizza Hut) said rising ingredient costs and wages hurt its bottom line. Unilever (Ben & Jerry’s, Dove soap) is taking a hit on transportation costs. The Fed wants to rein in prices with at least three interest-rate hikes this year. Regardless, shipping giant Maersk says supply shortages aren’t easing up anytime soon.
Rainy in the metaverse… Shares of tween-favorite gaming platform Roblox (47M users) and chip maker Nvidia soared last year as they invested in building out their meta-visions. But despite booming interest in an immersive internet of the future, many meta-focused stocks are now struggling. Nvidia and Roblox have sagged amid a broader tech slump, and Meta’s stock is down 35% on stalled user growth and profit-hitting metaverse investments. We’ll get a pixelated portrait of the metaverse industry when Roblox and Nvidia report Wednesday.
Piña coladas & conference calls... Extended stays are taking the travel industry by storm as WFH turns into work from hotel. Last year, 37% of Marriott’s room sign-ups in the US and Canada were for extended-stay trips. Meanwhile, Airbnb saw half its customers book for at least seven days. Now real-estate developers like Starwood are paying billions to scoop up longer-stay hotel chains that create twice as much profit margin as regular hotels. We’ll see how the “bleisure” economy is faring when Hilton, Hyatt, Marriott, and Airbnb report this week.
Authors of this Snacks own: Bitcoin, and shares of Moderna, Shopify, and Walmart
ID: 2037062