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Tuesday Nov.30, 2021
🦠 The Omicron effect
More time for breathwork meditation [Westend61 via Getty Images]
Hey Snackers,
A cryptic death: Mr. Goxx, the crypto-trading hamster who outperformed Warren Buffett’s portfolio this fall, has died of unknown causes.
Stocks plunged today after Fed Chair Jerome Powell said higher inflation could be coming thanks to the new Omicron variant. Powell said the central bank may consider ending its economy-boosting bond buying program sooner than expected. The creator of the Pfizer-BioNTech shot said Omicron is unlikely to cause severe symptoms in vaxxed people, though it may infect them.
Cron
Enter “Omicron”: How the new variant could affect markets, and what we know so far
"A variant of concern"... Omicron. Global markets plunged on Friday after the world was alerted to the new Covid variant. The heavily mutated variant, first detected in South Africa, has spread to at least 15 countries. So far, fewer than 200 cases have been reported globally, with none in the US — but Dr. Fauci said US cases are inevitable. What we know:
- The bad: The World Health Organization said Omicron poses a “very high” global risk, since existing vaccines may not work against some of its mutations. Also: Early data suggests it may be more transmissible than other strains.
- The not so bad: Symptoms seen so far have been “extremely mild,” according to Angelique Coetzee, the South African doctor who first flagged the strain.
Stow the passport... At least 46 countries, including the US and the UK, have already imposed travel restrictions from some African nations. Japan and Israel have closed their borders to all foreigners. Still, US stocks rebounded yesterday after President Biden said there was no need for panic, and there would be no lockdowns (for now). Pfizer and J&J said they’re prepping for the possibility of updating their vaccines. Moderna shares jumped 12% after the vax maker said it’s working on an Omicron-specific booster.
- Bear case: Depending on Omicron’s severity, it could sidetrack economic recovery, depress markets, and exacerbate supply issues — similar to Delta’s impact on the global economy.
- Bull case: Omicron’s effects could be curbed since vax makers say they can update their shots to fight it. Activist investor Bill Ackman said Omicron could boost stocks if symptoms prove to be less severe than those of other variants. Ackman = same guy who warned investors that "hell is coming" in March 2020.
Investors prefer the devil they know... And there's still plenty we don't know about Omicron. The WHO said it would take weeks to understand Omicron's health implications. Fed Chair Jerome Powell believes Omicron is a threat to the economy and could boost inflation uncertainty. Still: Markets dipped when the Delta variant appeared, then rebounded to record highs as its effects unfolded.
Namaste
Twitter founder Jack Dorsey steps down to focus on Square — and let Twitter find itself
New pinned tweet… 15 years, 8 months, and 8 days after posting history’s first tweet, Twitter founder and CEO Jack Dorsey has stepped down. CNBC broke the news yesterday, and Dorsey confirmed via tweet. Twitter shares spiked after Twitter CTO Parag Agrawal was promoted to CEO, but closed down 3%.
- Dorsey has served double duty for years as the leader of both Twitter and payments giant Square, joining Elon in the unusual double-CEO club.
- But investors have criticized Dorsey for treating Square — which is nearly 3X as valuable as Twitter — as his favorite child.
Not so namaste… Dorsey and Twitter have had a #complicated relationship for years. In 2008, he was fired from his CEO-ship for spending too much time on extracurriculars (think: vipassana meditation retreats, fashion classes). Then, in 2015, Dorsey made a Jobs-ian return as chief exec. Last year, activist investor Elliott Management tried to pressure him to either step down or stop multitasking. Now, Dorsey is leaving at a transformational time for Twitter:
- Ups: This year, Twitter unveiled targets to double revenue by 2023 by attracting new users and launched fresh features like its Twitter Blue subscription and Audio Spaces.
- Downs: Congress grilled Twitter over failing to fight misinformation, and its revenue is growing slower than other social giants’.
Sometimes it’s good for founders to get lost… In his resignation letter, Dorsey said companies must eventually ditch their founders to keep evolving. Some analysts argue that founder-led companies outperform competitors. But tech stars like Microsoft, Amazon, and Google have thrived without their parents. We’ll see if new Twitter boss Agrawal can guide the blue bird to a new era of growth.
What else we’re Snackin’
- Boost: The CDC recommended that everyone 18 and older get a booster shot in light of the new threat from Omicron.
- Sour: The FTC ordered nine companies, including Walmart and Amazon, to provide detailed info related to supply disruptions that are driving up food prices.
- Bagged: Black Friday foot traffic soared from last year, but was down a disappointing 28% from pre-pandemic levels as shoppers got ahead of supply issues.
- Spidey: AMC and Sony are giving away 86K Spider-Man-themed NFTs to customers who preorder tickets for “No Way Home.”
- Plug: Japan’s Nissan plans to spend nearly $18B over the next five years to add 20 new battery-powered vehicles to its lineup.
- IPNO: Stripe’s cofounder said the $95B fintech company is “very happy” staying private for now, and that it may start accepting crypto payments again soon.
Tuesday
- Giving Tuesday
- Earnings expected from: Salesforce, Zscaler, GlobalFoundries, NetApp, Box, and Allbirds
Authors of this Snacks own shares of: Square, Twitter, Microsoft, Moderna, Pfizer, Walmart, Amazon, and Google
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