Hey Snackers,
Almost exactly 11 years ago, a hungry programmer traded 10K bitcoins for two Papa John's pizzas. Even with BTC's recent plunge, those would've been worth $350M+ today. We hope he got extra cheese.
Stocks ticked down for the week on continued inflation concerns (#flated), but the techy Nasdaq index snapped its four-week losing streak.
From NYC to Beijing... Big Tech earnings season is (almost) over. This month, Wall Street's "Big Tech 5" – Apple, Amazon, Google, Microsoft, and Facebook – demolished results with back-to-back records. Still, the techy Nasdaq index is up just 6% this year — half of the S&P 500 and the Dow's gains. Now, we're looking at China, to see how the world’s other tech epicenter stacked up:
You've been warned... For years, Chinese tech titans were seen as untouchable sources of national pride. This year, China has been cracking down. China ordered 34 of the country's largest tech cos, including TikTok-owner ByteDance, to comply with anti-monopoly laws or face “severe punishment." The scrutiny is hitting companies where it hurts: their share prices and balance sheets.
China is a window... Despite strong earnings, tech stocks are on the struggle bus. While Chinese and US regulation are very different, China's crackdown begs the question of how intervention might change in the US — where it’s been much more light-handed. Antitrust scrutiny is rising, and President Biden’s FTC pick Lina Khan is a well-known tech critic. While US regulation isn’t likely to look like China’s, more intervention doesn’t seem far-fetched.
Treasure hunt vibes... Retailers' sales rebounded last quarter, as you attended your first get-together without a virtual background (bye, clouds). TJ Maxx and Ross sales soared past pre-pandemic levels on the "affordable splurge." Target shined as you caved for the floral dresses in the front. Macy's sales jumped 56% from last year, and Kohl's crushed expectations. TBD if pent-up demand will continue as stimulus benefits run out. Macy's CEO thinks it isn't a fluke.
Tim Cook-ing in the kitchen... and it's getting heated. Apple CEO Tim Cook was grilled on Friday as the Epic-Apple trial wrapped up. Cook's testimony was highly anticipated — but anticlimactic. If Fortnite-maker Epic wins the suit, Apple could be forced to give up control of app distribution. Read: customers could be allowed to freely install software on iPhones (not just through the App Store). It could be a make-or-break moment for Apple's antitrust future.
Anniversary of George Floyd's death... Tuesday marks the one-year anniversary of George Floyd's murder, which led to months of protests for racial justice across the US. Since then, American companies have pledged to spend $50B on racial equity initiatives. Yet only ~$250M has so far been spent or committed to specific initiatives, according to Creative Investment Research. Stay tuned for more coverage on whether companies have lived up to their pledges.
Buying the lip... Ulta, aka: Sephora's less flashy rival, reports earnings on Thursday. If Ulta's quarter was anything like Estée Lauder's, we can expect that skincare sales thrived, while makeup struggled (eye serum = new eyeshadow). But Walmart saw more sales of beauty products and teeth whitener last quarter. Since the CDC lifted mask mandates for fully vaxed peeps (FVPs), beauty companies are preparing for a "buy the lip" situation. Matte is already rallying.
Authors of this Snacks own shares of: Amazon, Microsoft, Apple, and Google
ID: 1659790