Hey Snackers,
We've been brewing up some 2020 Halloween costumes: Injured unicorn = WeWork on crutches. Self-driving electric star = Ariana Grande on a Bird scooter. Scary SPAC = a skeleton stuffed with cash. And of course, Goldman Sachs CEO DJ D-SOL (claaasssic).
Stocks ticked up yesterday on a quadruple-whammy of Big Tech earnings. We're covering Amazon today, and snack-ified the rest for you in our "What Else" roundup.
The only one having a good 2020... Amazon brought in record-high sales last quarter, breaking its all-time high from the previous quarter. We lost count of how many fleece sweatpants we 1-click ordered, and Amazon probably would've lost count of how much $$$ it raked it (if it weren't required to report that to the SEC):
Quick, create a diversion... Amazon knows that its mega sales were driven by a world-shattering pandemic, so it made sure to highlight all the good things it did for the world last quarter. It:
Amazon's future: cloudy with a chance of breakup?... Amazon's cloud computing unit AWS made up a whopping ~57% of its profit last quarter and ~12% of sales. As Congress continues to grill Big Tech on its monopoly-like ways, this question will probably come up: why does the largest e-commerce service also own the largest cloud computing service?
"How are you feeling today, Pickles?"... That's the vet talking to your dachshund over Zoom. Pet supplies deliverer Chewy has been thriving on the pandemic puppy-palooza. Now it's launching a telehealth service to connect pet owners with licensed vets.
Chewy's chewing on two major trends... First, the pet-palooza: adoptions have jumped on the "everything-from-home" life. One shelter received 1,000 requests for the same (painfully cute) bulldog puppy. Chewy has been profiting off high demand for furry friends. The second trend:
Chewy is guarding its turf... and marking its territory in the pet industry. By bundling pet-related services, Chewy is trying to build loyalty and steal Milk-Bones orders from Amazon (it's all about Amazon again). Chewy should add pet insurance to its "Barking Bundle," just like Lemonade recently wrapped it into its insurance package (@Chewy: feel free to accept our bundle name suggestion).
Did you get a tan?... Our old friend the US economy is looking much better than it did the last time we checked in on it. But it's not the Fenty concealer or the Maldives trip — it's the GDP (aka: the total value of all goods and services produced by a country over a period of time — aka: the economy).
But everything is relative... and context is key. While the quick quarterly spike is impressive, the economy is still around 3.5% smaller than it was at the end of last year. TLDR: better than last quarter — still down overall.
It's likely slowing down from here... The stimulus injection that fueled last quarter's rebound has expired. The enhanced unemployment and federal checks boom is over, airline aid is gone, and negotiations for a 2nd stimulus still haven't come together. Until more financial help arrives, we can buckle up for another slowdown.
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Disclosure: Authors of this Snacks own shares of Amazon, Apple, Google, and Tesla
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