Remind me what year it is? [Massimo Ravera/Getty Images]
Remind me what year it is? [Massimo Ravera/Getty Images]
Hey Snackers,
We’re only three months into 2022, but it already feels like this first quarter has lasted a year. Just as Covid seemed to be waning in the West, Russia invaded the sovereign nation of Ukraine, launching a war that’s taken thousands of lives and driven Europe into one of its darkest times since WWII.
Today, we’re zooming out and zeroing in on the news and trends that’ve shaped markets and biz in the past three months — and helping you prep for what’s next.
The smog of war… Russia’s war on Ukraine has roiled markets and mobilized world leaders and businesses. The West has weaponized finance to punish President Putin’s onslaught, from sweeping sanctions to yacht seizures. The US stopped buying Russian oil, and major companies like McDonald’s and Coke halted business there. Meanwhile, the EU is scrambling to phase out Russian energy by 2027. Reduced supply from Russia has caused prices of oil, gas, wheat, nickel, and other key commodities to skyrocket. Oil fuels the global economy, from manufacturing to farming to shipping. High energy prices will likely slow economic growth — and could even trigger a US recession.
Inflation nation intensifies… so does pump anxiety. US inflation reached a new 40-year high last month, with consumer prices up 8% from a year ago. A gallon of gas is hitting $7 in some states. After two years of near-zero interest rates, the stimulus party’s over: the Fed started raising rates this month to cool prices, though only by half of what was expected. Despite all the war-driven uncertainty, Fed Chair Powell emphasized plans for more rate hikes. Now the US is in “boomflation” — inflation paired with strong growth and a nearly recovered labor market. But in an econ nightmare scenario, we could get “stagflation”: high inflation + sluggish growth.
The big bear(ish) market… Your portfolio might be feeling it. Stocks kicked off the year at records, after the market-tracking S&P 500 index gained 27% last year. Fast-forward three months: major indices are all down so far, and the techy Nasdaq is down 10% from its record in November. Giant tech stocks like Amazon and Microsoft are weighing down the whole market. As rates and inflation rise, the value of companies’ potential future growth is also falling. Cue: stock prices are being “corrected.” Meanwhile, pandemic thrivers like Peloton, Netflix, and Pinterest have plunged as demand sags.
The IPO-palooza is over… IPOs slowed to a trickle this quarter: there was a 25-day span without a single one. That's a stark contrast to last year, when 1K+ companies raised a record $268B. Part of the reason private giants like Stripe are holding off: 70% of last year’s IPOs ended the year trading below their offering prices. Even Rivian, the first-to-market EV-truck maker with last year’s biggest debut, has slipped 50% since IPO’ing. Instacart and others have canceled planned IPOs, and the rest of the year’s expected to stay slow.
Ready Player (Every) One… US consumers spent $60B on video games last year — twice as much as they spent on streaming movies and TV. Gaming deals hit a new high score this quarter: “GTA” maker Take-Two revealed plans to buy Farmville maker Zynga for $12.7B in the biggest gaming deal of all time — until Microsoft beat that a week later with a $70B bid to buy “Call of Duty” maker Activision. Now gaming’s entering a new phase: the metaverse. Tech giants Meta and Nvidia are spending billions building metaverses, and gaming platforms like Roblox could be crucial to snagging early meta-users.
Moderation mayhem… Tech has been in the moderation hot seat, from the usual suspects (Meta, Twitter) to Spotify and TikTok. Joe Rogan created a Spotifiasco when medical experts and Neil Young called out Covid misinfo on his Spotify-exclusive pod. Rogan’s history of using racial slurs also surfaced. Spotify stood by Earth’s biggest podcaster, but made its moderation policies public for the first time. Others like TikTok and Twitter have had to deal with multiplying misinfo about Russia’s war in Ukraine. And Meta allowed users to call for violence against Russian invaders.
Sci-fi author Neal Stephenson coined “metaverse” in his 1992 best-seller “Snow Crash,” in which people use virtual avatars to escape a dystopia
Authors of this Snacks own: bitcoin and shares of Apple, Netflix, Twitter, Spotify, Amazon, Zynga, and Microsoft
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