Hey Snackers,
This may be the most morbid DIY project yet: build-your-own-coffin is now a service merchants are offering with Ikea-style kits. “We just had so much fun,” one customer said.
Stocks rallied for the week as investors digested better-than-feared earnings from companies like Netflix and Tesla. But the win streak was snapped on Friday after Twitter posted a loss and Snap reported its slowest quarterly sales growth as a public company. Big Tech earnings are up next.
When $6/gallon sounds like a steal... you know the pump anxiety is real. US fuel producers are on track to rake in record cash windfalls. The largest independent oil refiners — Valero, Marathon Petroleum, and Phillips 66 — are poised to collectively make $14B from refining this quarter. Oil biggies like Valero start reporting this week, and the expected profit margins are wild:
But oily profit could be peaking... or may’ve already peaked. Summer is usually a busy driving season, but jaw-dropping gas prices are starting to keep Americans off the road. Drivers pumped 10% less fuel in the week ended July 9 compared to last year. Meanwhile, refineries are cranking at full capacity.
A recession could tank gas prices… And if the US isn’t already in one, it likely will be soon. Higher supply and lower demand are already pushing down gas prices — but a recession could tank them. Oil fuels the wheels of economic activity, and suffers when it slows: an economic downturn means less traveling, less spending, and less manufacturing. But for this year at least, refiners are on track for some banner profits.
Goodbye, my coin… Last year Elon claimed Tesla had “diamond hands” for bitcoin. Turns out Tesla sold 75% of its bitcoin (worth $936M) as of last quarter. On last week's earnings call, Musk said Covid crackdowns in China forced Tesla’s (apparently paper) hand since it needed cash. BTC's price has plunged since Tesla bought $1.5B worth last year, but the company says it sold at a gain. The EV icon stopped accepting bitcoin as payment last year. Its unloading of the OG crypto could signal an end to Musk's days as a crypto hype man.
Asada bowl, extra guac… and a side of organized labor. Last week Chipotle closed a store in Maine after workers filed to form what could’ve been the chain’s first union. Owners cited staffing issues, but workers called it union backlash. It’s not just Chipotle: US labor organizing is rising, and 200 Starbucks have unionized since last fall. This year, Amazon and Apple workers also formed their companies’ first US unions. Union membership has declined for years, but support for unions is near record highs — which could lead to higher costs and more friction for companies.
Less money... still problems. Microsoft, Google, Meta, and Apple are on deck to report this week. With recent layoffs and hiring freezes top of mind, investors expect second-quarter earnings to be tough for some — but not all — of tech’s major players. Analysts predict rougher #'s from Google and Meta as recession fears shrink advertising budgets. Meanwhile, Apple seems to be weathering the economic storm, expecting to report double-digit growth despite supply snags. Investors are optimistic about Microsoft's booming cloud biz.
Power to the Powell… To tame prices, the Fed hiked interest rates by an unexpectedly high 0.75 percentage point last month — the biggest jump since the ’90s. On Wednesday, America’s central bank is expected to dish out another three-quarter-point hike. Some analysts say it should be more aggressive and raise rates by a full point. Last week, Europe’s central bank hiked rates for the first time in 11 years (’flation’s even worse there). But moving too fast could trigger (or deepen) a recession by slowing spending, investment, and hiring.
Authors of this Snacks own: bitcoin and shares of Google, Amazon, Starbucks, Spotify, Ford, Apple, Microsoft, Snap, Tesla, Netflix, Twitter, Exxon, Sirius XM, Shopify, Comcast, and Walmart
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