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Hey Snackers,
“Yesterday’s price is not today’s price.” Rapper Fat Joe’s iconic phrase is resonating again with economists: The #bars sum up the 7% year-over-year spike in inflation reported for December, a 40-year high.
Stocks fell today with the tech-heavy Nasdaq sinking 2.5% as Microsoft and Amazon weighed on the market.
OOO
The national Omicron “sick-out” wreaks havoc across the US, from stores to subways
Spreading like wildfire... The US is seeing record hospitalizations, driven largely by people under age 60, as uber-contagious Omicron spreads. (FYI: Hospitalization totals include people who test positive after being admitted for non-Covid reasons.) Omicron is half as likely to hospitalize people compared with Delta, but there are way more cases: The US logged a record 1.35M new infections on Monday, the highest daily total for any country. Omicron accounts for about 98% of cases in America.
- 5M+ US workers could be isolating this week, but only a third of low-wage workers are getting paid sick leave, leaving many with a financial burden.
- Meanwhile: Walgreens, CVS, Amazon, Walmart, and Delta shortened their paid sick leave after the CDC cut its recommended isolation time to 5 days from 10.
Called in sick... As if supply and labor shortages weren't enough, Omicron is causing mass disruptions in sectors that require IRL work — think: empty grocery shelves and global manufacturing delays. A fifth of US hospitals are severely understaffed, and a fifth of NYC subway workers were out sick last week, which caused train delays. It’s hitting businesses too:
- Starbucks, Nike, and Lululemon joined Macy's, Walmart, and Apple in reducing store hours or temporarily closing locations. Lulu even lowered its earnings guidance.
- US airlines have canceled more than 28K flights, and United is planning more flight cuts after nearly a third of its Newark staff called in sick on a single day. (Delta could give a status update when it reports today.)
2022 could be the year Covid is “normalized”... World leaders have started positioning the virus as a normal part of life. The UK told the British public that they would have to “learn to live with” Covid, and Spain’s prime minister suggested the EU should consider treating it as an endemic illness like the flu. Biden too is preparing Americans to accept the virus as part of daily life. The upshot: Scientists are seeing signals that Omicron could peak soon in the US.
Coins
Kim’s K crypto crisis: Influencer-driven coin promos add fuel to the push for regulation
Keeping up with crypto... Kim Kardashian, Floyd Mayweather, and other celebs are being sued over promoting alt-coin EthereumMax as part of an alleged crypto scam. The mysterious coin debuted in May claiming to “bridge the gap between community-driven tokens” and legacy crypto — but provided few details.
- Problem #1: EthereumMax’s misleading name. It has nothing to do with Ether, the second-largest cryptocurrency after Bitcoin.
- Problem #2: EthereumMax has crashed 98% since June, which has led to allegations it’s a “pump and dump” scheme. Think: Insiders selling everything after hyping the coin.
- Problem #3: Misleading #ad-vertising. Kim disclosed to her 250M+ Insta followers that EMax was a paid promo (FYI: she had to) but didn't discuss risks. Mayweather even accepted EMax as payment for his high-profile fight with Logan Paul.
Crypto’s Wild West… is under scrutiny. While micro-influencers increasingly promote new cryptos, celebs like Kim K have unprecedented reach. As FOMO-driven investors try to score on the $3T crypto market, a growing number of fraudsters are taking advantage. Last year, crypto crimes hit a record $14B, and scammers lured investors with trend-based coins (see: Squid Coin).
- Regulators have warned against crypto-market manipulation for years. But crypto markets and exchanges lack the controls and fraud protections of the stock market.
- US regulators are calling for coin issuers to be held accountable. SEC Chair Gary Gensler wants crypto to be regulated in the same way the SEC oversees stocks and bonds.
Crypto scams are bad for crypto… While some argue that crypto is in the late-adoption phase, celebrity endorsements open the door to millions of new investors who might not have enough information to tell which coins are legit. About 100 new coins are created every day. Scams are further motivating regulators and investors in favor of more transparency and safeguards around crypto.
Correction: In the Snacks newsletter published on Thursday, January 13, we misstated who Floyd Mayweather fought in his high-profile boxing match. It was Logan Paul, not Jake Paul. We’ve updated the online version of the newsletter, and we regret the error.
What else we’re Snackin’
- ETA: Didi (aka: the Uber of China) reportedly plans to ditch the New York Stock Exchange and list in Hong Kong later this year, as US and Chinese financial markets continue decoupling.
- Perks: As millions of Americans struggle to find and pay for Covid tests, companies like Google, BlackRock, and JPMorgan are starting to provide employees with free at-home tests.
- Bralette: Tween-favorite retailer American Eagle expects record quarterly sales for the year despite Omicron, as its Aerie line of comfy loungewear continues outperforming.
- Denied: Biogen shares fell 7% after Medicare said it would limit coverage of its $28K Alzheimer’s drug Adulhelm — whose benefits are being questioned — to patients enrolled in clinical trials.
- Widget: Locket, a new 2M-user social app where friends can share photos to each other’s home screens, has skyrocketed to the top of the App Store since launching on January 1. It first took off on TikTok.
Thursday
- Weekly jobless claims
- Earnings expected from: TSMC and Delta
Authors of this Snacks own Bitcoin, Ethereum, and shares of: Apple, Amazon, CVS, Delta, Google, Starbucks, Uber, and Walmart
ID: 1988140
