With markets in crisis mode, we're in this fight together
Global health pandemic, market crash, economic sick day (sick "month?" season? year?). Policymakers tried to get extra creative last week (and through the weekend) to resuscitate everything:
Markets rallied big on Friday after a brutal week — the Dow had its best single-day point gain ever, after Wall Street's worst day in 30 years. The S&P 500 has fallen over 16% this year, with more market turmoil likely ahead.
Welp, that escalated quickly… Wall Street prides itself on predicting risks and opportunities quicker than everybody else. Two weeks ago, it predicted doom as markets suffered their worst week since 2008. Then, things got worse:
Stocks fly together (downward)… When economies and markets get shaken by something as far-reaching as a pandemic, investors tend to hit the “sell” button as indiscriminately as a “down for anything” Tinder user swipes right.
What goes up, must come down (and vice versa)... Each “bull market” is followed by a “bear market”, and versa vice — it’s like a see-saw with giant duffle bags of money sliding back and forth.
Pregame hosted over Zoom... Shares of video conferencing company Zoom have soared 63% in 3 months. As meetings turn virtual and WFH goes standard, more companies are Zooming (it earned verb status) — its quarterly sales jumped 78% from the year before. Wednesday was Zoom's biggest download day ever. Now it's offering videoconferencing to K-12 schools for free as classes move online.
Groupies wanted... Pepsi splurged almost $4B on energy drink throwback Rockstar, which Pepsi has distributed since '09. Big Bev has been shifting to "functional beverages" — think low-cal energy drinks, hard kombucha, CBD-infused liquid, and anything you drink "for a reason" besides just hydration or the alcohol. So instead of wasting years and $$$ to build up its own brand to rival Rockstar, Pepsi now owns the #3 energy functional bev ASAP.
Terrible time to be 'Sassy and Gassy'... Oil prices took their biggest plunge since '91, dropping 24% last Monday. Part of that is coronavirus-reduced travel demand. The rest is reality show-worthy OPEC drama: Saudi Arabia wanted Russia to cut oil production to boost prices of their precious export. But Russia refused (reportedly, to hurt US oil producers). So Saudi jacked up its production, dropping oil prices even further. Since then, Exxon Mobil stock is down 21% and Occidental Petroleum fell 53%.
Despite your current WFH lifestyle... work messaging service Slack isn't doing as well as its "stay-at-home" peers (like Zoom). Shares dropped 20% after Slack's earnings revealed it's growing slower than investors expected. The problem is that it simply takes way longer to implement Slack than Zoom (think salespeople, contracts, IT integrations, and learning curves teaching Bruce what "channels" are). So Slack's experiencing some "opportunity blockage" — like the Baby Yoda toy situation.
Disclosure: Authors of this Snacks own shares of Slack