Hey Snackers,
A former Amazon engineer is working on an app to translate your cats' meows. Can't wait to hear: "Serve me, silly human." Love you too, Floofy.
Stocks dipped again yesterday as the market’s recent rally to new records paused. Meanwhile, Pfizer one-upped Moderna, saying its COVID-19 vaccine was 95% effective in final data. It could ask for FDA approval in a few days.
Elon time coming... Tesla will join the S&P 500 index on December 21st, after posting five consecutive profitable quarters. Tesla became eligible to join the famous index in July, after notching four straight profitable quarters for the first time in its 17-year history.
Welcome to Club 500... Over $11T is invested in mutual funds and ETFs that track the S&P 500. These funds are kind of like investment "smoothies," made up of a blend of different stocks instead of fruit (though Apple works both ways). Fund managers will now have to buy Tesla stock for their S&P smoothie, so shares have jumped 19% on the news. But these joining rallies (if they even happen) don't necessarily last long.
Tesla could shake up the S&P... The bigger a company's market value, the more weight it carries in the Club. That's why Apple, Microsoft, Amazon, Google, and Facebook make up a whopping ~26% of the index. Tesla's market value is double Toyota's, even though Toyota delivered 30X more cars last year. Some analysts point to Tesla's profit-streak and record 140K deliveries last quarter as signs of maturity. But skeptics say the historically volatile stock could bring risk to the entire index.
Hmmmm... You'd think eight months of being cooped up at home would lead to a baby boom, but experts are actually predicting a baby bust. They think the corona-conomy will lead to majorly declining birth rates.
Designer Diapér... We're nine months out from the first lockdowns, so baby businesses are strategizing. As births have slowed in the US and China over the years, consumer giants have shifted focus to premium baby items. Parents are having fewer kids, but they're spending more on them.
When the pie shrinks, raise the price... The baby market is shrinking, so companies are testing how much remaining customers are willing to pay. To make up for sales drops, they're raising prices — like Apple did with the $1,450 iPhone in 2019. How do they justify that? By upscaling products with fancier features. No one needs a four-eyed phone or a cloud-connected diaper. But companies don't care, as long as people will pay.
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Disclosure: Authors of this Snacks own shares of Tesla, Apple, and Starbucks
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