đź’° The secret stimulus

Thursday, July 15, 2021 by Robinhood Snacks | Disclosures
_Back-to-school is about to be lit [Lorado/E+ via GettyImages]_

Back-to-school is about to be lit [Lorado/E+ via GettyImages]

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Hey Snackers,

It's always sunny in Philadelphia, but it's never 69 and sunny anywhere. According to The Verge, Apple's weather app refuses to display the chuckle-worthy number.

Stocks ticked up after Fed Chairman Jerome Powell told Congress that the central bank plans to continue its relaxed monetary policy, and that inflation will likely cool down.

Piggy
1. $300 monthly checks to parents start today, but the real winners could be retailers

Crank out the piggy bank... If you're still signing field trip forms, a $300 check could be on its way. Today, the US government starts sending US parents $300 per month for each child they have (your 25-year-old who lives at home doesn't count). This temporary increase in the child tax credit was passed as part of Biden’s $1.9T stimulus rescue package in March.

  • 39M households will receive payments, covering 88% of US children. Each month for the rest of 2021, eligible parents can expect $250 or $300 per kid, depending on age.
  • $105B: How much the boost will cost Uncle Sam. Last year, the credit was $2K/child per year. Now it could be up to $3.6K each year. Buut: it expires in December.
  • $150K: The full credit starts getting smaller for married couples who earn more than $150K/year, and individuals who make more than $75K.

Give the kid some credit... Since 1997, the child tax credit has reduced income liability for people with children. With the old child tax credit, parents saved on taxes owed when they went to file. With this new credit, parents are straight-up getting paid, even if they have no income. It's less like a tax break, more like a monthly allowance.

  • Dems tout the payments as a way to reduce child poverty and change lump-sum refunds into a reliable income stream. And Biden hopes to extend it for years.
THE TAKEAWAY

Prepare for the "secret stimulus"... that could benefit big retailers. Pandemic stimulus checks boosted consumer spending, helping out go-to chains like Walmart, Costco, and Target. This monthly "credit" could have a similar effect on the family-favorite retailers. Target and Dollar General mentioned the sales-boosting potential in their earnings calls, and Walmart, American Eagle, and TJ Maxx are prepping for strong back-to-school sales. And it's not just binders and diapers — that spending could spill into adult categories like alcohol, restaurants, and travel.

Juicy

From toothpaste to smartphones… Korean conglomerate LG makes just about everything. It also owns one of the world’s largest manufacturers of car batteries: LG Energy. LG Chem, its parent company, brought in $27.1B in revenue last year, and has sealed car battery deals with GM, Tesla, and Volkswagen. Now, it's juicing up with a $5.2B investment in its battery materials biz.

Not just Tesla juice… Thanks to government subsidies and clean energy concerns, demand for EV batteries is soaring. But battery behemoths like LG have their eyes set on more than just EVs. They want to service the entire renewable energy industry by fixing its storage problem.

  • The Problem: "Intermittency." That's when solar panels stop generating electricity on cloudy days, or wind turbines slow down in less-gusty weather.
  • The Solution: Gigantic, factory-sized batteries that save up energy to use on a (literal) rainy day. LG has already installed utility-scale batteries across the US, including at the world’s largest battery storage complex in CA.
THE TAKEAWAY

Big batteries = big potential… EV batteries are top of mind for consumers, but utility-scale batteries are a massive opportunity for renewable energy infrastructure. They solve the "intermittency problem" for companies and governments that are setting ambitious carbon-reduction goals. Bigger batteries could also mean bigger business: the global market for energy storage is expected to hit $426B in the next decade.

What else we’re Snackin’
  • Collab: The EU and China jointly announced plans to limit greenhouse gas emissions from both consumers and industries.
  • Biscoff: Delta reported its first profit since 2019 thanks to a resurgence of domestic leisure travel.
  • Beef: Facebook followed Amazon's lead and asked for FTC chief and Big Tech critic Lina Khan to be removed from its federal court case.
  • BNPL: Apple is working on a "buy now, pay later" service to rival Affirm, PayPal, and Klarna.
  • ZuckBucks: Facebook said it will pay out $1B through 2022 to reward creators who post on Insta and FB. Read: lure them away from TikTok.
  • Carma: Toyota just bought HD mapping startup Carmera to level up its self-driving game (looks like GTA).
Snacks Daily Podcast

The short sellers strike again: Oatly was accused of overstating its sales and greenwashing its "sustainable" oat milk.

But Oatly's biggest problem isn't how much water its oats consume.

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Thursday
  • Weekly jobless claims
  • Earnings expected from UnitedHealth and Morgan Stanley

Authors of this Snacks own shares of: Delta and Apple

ID: 1722725