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Hey Snackers,
The 2020 simulation took a sweet turn when chocolate snow started falling over a Swiss town (claaassic Swiss town headline). A ventilation mishap at a Lindt factory made powdered cocoa rain from the sky. Tomorrow's forecast: cloudy with a chance of Swatches.
A surprisingly high 1.1M people filed for unemployment last week. The week before, jobless claims dropped to below 1M. Stocks ticked up despite the bummer.
Stream
Verizon accelerates its own cable death with a free Disney streaming bundle
Way harsh, Tai... Verizon just trolled itself by saying cable bundles no longer make sense. But it came ready with a self-improvement strategy: a sweet Mickey deal. Verizon is offering the entire Disney streaming bundle (aka Hulu, Disney+ and ESPN+) for free to some premium wireless customers.
- Old Bundle: Telecom companies are known for "Triple Play" bundles of cable TV, internet, and phone service.
- New Bundle: Internet, wireless service, and the Disney streaming bundle + Apple Music thrown in at no additional cost. And no expiration date.
Just wanted to stream Hamilton... Verizon's cable biz is dying because streamers like Disney+ and Netflix are thriving. The cord-cutting frenzy wasn't lost on Verizon, so it decided to disrupt its own cable business:
- Over 50% of new Verizon Fios households choose not to add cable TV to their home broadband internet package. That unbundling spells doom for pay TV.
- “The current value chain of the media business is not working. It’s broken.” Verizon exec quote, spittin' facts.
Not all bundles are created equal... but they're all meant to reduce churn. You're less likely to cut your relationship with a company if it's offering you 5 services at bundle price (even if you only care about 3). But cable has clearly lost its sex appeal, while streaming is at peak hotness. Verizon isn't the only telecom splurging to offer streaming for free: T-Mobile gives away Netflix and Quibi and AT&T ships HBO Max. It's customer retention strategy, binge-edition.
Currency
America's "Superman Currency" is weakening — how that affects your wallet
Nutella might get pricier... The value of the US dollar is sliding (aka depreciating) relative to other currencies like the Euro. Say a jar of Nutella costs €1. A year ago, €1 equaled $1.10. Today, €1 = $1.19. You're spending 9 cents more to nab the same jar of Italian decadence. The value of the dollar has fallen to its lowest level in over two years, and it might keep sliding.
- "Superman Currency": The USD's stable rep makes it a hot global commodity. It has long been used as the world's reserve currency for international purchases.
- Superman in Action: If Canada wants to buy oil from Mexico, it's likely doing it in USD. Exchanging Canadian dollars for Mexican pesos could mean losing money. Picture gnarly airport exchange fees post-Cabo trip.
Beware the kryptonite... Like that friend who immediately Venmos you, the US government has never missed a debt payment. That has allowed it to borrow trillions at near-zero interest rates (shoutout US Treasury bonds). But depreciation threatens the dollar's Superman status. Some reasons why it's happening:
- Fed money printer: The Fed has been blasting out dollars to inject back into the economy. More dollars = less demand for dollars = less valuable dollars.
- Instability: An out-of-control pandemic, shrinking GDP, and political instability have affected confidence in the dollar. Oh, and the national debt is at a massive $27T.
Every dollar has two sides... If the US was a store, it would have a "discount" sign out front. Depreciation makes American goods cheaper for foreigners. That drives up demand for American products and stocks, which drives up stock market prices. If the dollar weakens long-term though, that could mean higher inflation, higher interest rates, higher taxes, and less global power for the US. China wouldn't mind snagging the dollar's Superman cape.
What else we’re Snackin’
- Ride: Uber and Lyft won't be shutting down in California — just hours before the expected shutdown, a judge granted them a reprieve that delays the AB5 order.
- Sharebnb: Airbnb filed confidential IPO paperwork with the SEC. It also banned parties at all its listings (apparently 17+ people = party).
- Dashing: DoorDash launches grocery delivery powered by its delivery platform DoorDashDrive — chains like Walmart already use it to power their own delivery.
- Electrify: GE inks a $1.2B deal with Iraq to power up its electricity infrastructure and manage its power plants.
- Testy: Delta partners with CVS to accelerate rapid COVID-19 testing for employees — global air travel is down 85% from last year.
- Babaganoush: Alibaba's quarterly profit more than doubled from a year ago — the Chinese ecommerce giant brought home nearly $7B.
Friday
- Earnings expected from Foot Locker and John Deere
Disclosure: Authors of this Snacks own shares of Alibaba
ID: 1308524
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