- __[Chipper](https://snacks.robinhood.com/newsletters/1WQENztNAu8UzlWhIRxGLw/articles/18EKyGD00qIzaSzibZqpiz/):__ Good news re: your back-ordered laptop. Last week __[Intel](https://robinhood.com/stocks/INTC)__ said it was buying Israeli chip maker __[Tower](https://robinhood.com/stocks/TSEM)__ for $5.4B to boost production. Chip and EV giants have pledged billions to revamp US manufacturing.
- __[Ripe](https://snacks.robinhood.com/newsletters/5LmNo4XqY94BEILxHeMVFj/articles/2nJt7ICl3XBGhemlAUlHzo/):__ Avocados are about to cost more green: avo prices are [rising](https://fortune.com/2022/02/16/avocado-crisis-chipotle-prices-skyrocket-mexico-president/) after the US banned imports from Mexico when a US food inspector was threatened amid cartel chaos. Mexico supplies 80% of the US’s avocados.
- __[Burbs](https://snacks.robinhood.com/newsletters/7soGkARtnuPgraycLIFyKn/):__ Auntie Anne’s for lunch: Sales at __[Simon Property Group](https://robinhood.com/stocks/SPG)__, the largest mall owner in the US, have surpassed pre-pandemic levels. But retail in cities isn’t seeing the same rebound.

ICYMI

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Max Knoblauch

Business

__Feels so normal, it's abnormal...__ walking to the restaurant bathroom unmasked. We thought "back to normal" was happening this winter, until Omicron. But now that cases have waned and proved less severe, a national reopening mania has started... for real. Anticipation is growing:

- __Restrictions are falling__ daily. Half of US states have [ditched](https://www.nbcnews.com/news/us-news/mask-mandate-map-february-2022-n1289093) mask mandates over the past month, and even the CDC wants to give people [a break](https://www.cnbc.com/2022/02/16/cdc-wants-to-give-people-a-break-from-wearing-masks-as-pandemic-improves-director-says.html). Lots of Super Bowl fans were unmasked at a sold-out stadium, and Coachella and Stagecoach say they won’t have Covid-related restrictions when their festivals return in April.
- __Spending is up.__ January saw the strongest monthly gain in retail sales since March 2020, when the first stimulus checks hit. Retail sales were up 4% from December.
- __Travel is rebounding,__ and __[Marriott](https://robinhood.com/stocks/MAR)__, __[Hilton](https://robinhood.com/stocks/HLT)__, and __[Airbnb](https://robinhood.com/stocks/ABNB)__ [expect](https://www.reuters.com/business/marriott-airbnb-others-see-global-travel-rebounding-2022-2022-02-16/) global travel to surpass pre-Covid levels this year.

__But there's a dark cloud...__ over reopening. Consumer prices were up 7.5% in January from a year earlier, the fastest increase in 40 years. While retail sales jumped, it’s [partly](https://www.wsj.com/articles/us-economy-january-2022-retail-sales-11644963650?mod=business_lead_pos11) due to *higher prices* — not more purchases. Wages are rising, but pay bumps [haven't](https://www.cnbc.com/2022/02/10/inflation-eroded-pay-by-1point7percent-over-the-past-year.html) kept up with inflation.

- __Consumers are feeling it —__ especially low-income Americans. Food prices are up 7% from a year ago, and gas is up *40%*. __[Walmart](https://robinhood.com/stocks/WMT)__, the consumer bellwether, [says](https://www.cnbc.com/2022/02/17/walmart-cfo-brett-biggs-says-customers-are-paying-attention-to-rising-prices.html) shoppers are on edge about grocery bills. Meanwhile, consumer sentiment is at a decade [low](https://www.reuters.com/world/us/us-consumer-sentiment-drops-more-than-10-year-low-february-survey-2022-02-11/).
- __Companies are passing on rising costs__ to consumers, as inflation starts to dent profits. Still: Profit at the 500 largest companies were up 50% last year as consumers [proved willing](https://www.cnbc.com/2022/01/13/profits-for-sp-500-companies-rose-22percent-in-the-fourth-quarter-and-nearly-50percent-in-2021-estimates-show.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosmarkets&stream=business#:~:text=S%26P%20500%20operating%20margins%20have,were%20able%20to%20raise%20prices) to pay more. __[Coke](https://robinhood.com/stocks/KO)__, __[Pepsi](https://robinhood.com/stocks/PEP)__, and __[Procter & Gamble](https://robinhood.com/stocks/PG)__ reported [strong sales](https://www.cnbc.com/2022/02/16/walmarts-earnings-may-signal-if-shoppers-getting-spooked-by-inflation.html) despite upping prices.

What do you mean “no vax card required”? [SolStock/E+ via Getty Images]

Endgame

__Prices are spoiling the party…__ Literally: booze giant __[Constellation](https://robinhood.com/stocks/STZ)__ [wants](https://seekingalpha.com/article/4478331-constellation-brands-stz-ceo-william-newlands-on-q3-2022-results-earnings-call-transcript) to raise prices as much as buyers can absorb. But there’s medicine in sight. Last summer, the Fed wasn’t expected to raise rates until next year. Now at least three hikes are expected *this* year. Rising rates could hurt stocks and spending short term, but help consumers and the economy long term by curbing inflation.

"Reopening mania" is building, but there's a dark cloud over it — and your wallet feels it

__House of Gucci...__ Lux brands took a hit when lockdowns curbed the need for Balenciaga sneaks and Prada bucket hats. Last year, Gucci and Yves Saint Laurent owner __Kering__ had a record $20B comeback. Gucci sales jumped 30% last quarter thanks to big marketing and huge China demand. Luxe giants like Kering and __[LVMH](https://robinhood.com/stocks/LVMUY)__ are well positioned as prices rise: their customers are less price sensitive, and higher prices = #exclusivity. Now lux brands are looking to the metaverse. Last year, a Gucci digi-purse sold on __[Roblox](https://robinhood.com/stocks/RBLX)__ for nearly 20% more than the leather version.

__[Google](https://robinhood.com/stocks/GOOGL) searched...__ its soul. Digital ad giants are nervous. Last week Google said it would [stop](https://www.cnbc.com/2022/02/16/google-plans-android-privacy-change-similar-to-apples.html) advertisers from tracking Android users, after __[Apple](https://robinhood.com/stocks/AAPL)__ made a similar [move](https://www.cnbc.com/2021/11/13/apples-privacy-changes-show-the-power-it-holds-over-other-industries.html#:~:text=Apple's%20ad%20privacy%20change%20impact%20shows%20the%20power%20it%20wields%20over%20other%20industries&text=In%20April%2C%20Apple%20released%20an,from%20using%20a%20device%20ID.&text=While%20the%20changes%20have%20been,re%20also%20benefitting%20Apple's%20advertising.) last year. Since Android phones make up 70% of global smartphones, the change could cut into sales at __[Twitter](https://robinhood.com/stocks/TWTR)__, __[Snap](https://robinhood.com/stocks/SNAP)__, __[Pinterest](https://robinhood.com/stocks/PINS)__, and __[Meta](https://robinhood.com/stocks/META)__. This year Meta [expects](https://www.nytimes.com/2022/02/03/technology/apple-privacy-changes-meta.html) to lose $10B in ad revenue from Apple’s update, and its stock has fallen 45% from its September peak. Meta has told investors to stay tuned for its meta investments, but they may take a while to offset slowing ad sales.

Zoom Out

Stories we’re watching…

__Extreme makeover, pro edition…__ Home-improvement chains saw monster sales during the pandemic as we spent weekends building __[Zoom](https://robinhood.com/stocks/ZM)__-worthy home offices. Now the experts are taking over. __[Home Depot's](https://robinhood.com/stocks/HD)__ pro biz (think: drywall, drill [rentals](https://www.homedepot.com/c/tool_and_truck_rental)) has topped DIY as homeowners outsource their paint jobs to contractors (who spend more $$ than DIYers). Last quarter, rival __[Lowe's](https://robinhood.com/stocks/LOW)__ [raised](https://www.cnbc.com/2021/11/17/lowes-low-q3-2021-earnings.html) its sales forecast, partially thanks to a 16% spike in pro sales. We’ll see if it can keep boosting the bottom line for Lowe’s and the Depot when they report this week.

__Market vax-uration…__ Biotech newcomer __[Moderna’s](https://robinhood.com/stocks/MRNA)__ looking for its next move. The company used its novel mRNA “platform” to quickly make a Covid vax, and [sold](https://www.bloomberg.com/news/articles/2021-11-04/moderna-cuts-2021-vaccine-sales-estimate-as-revenue-falls-short) an estimated $15B+ of jabs last year. But Moderna’s biz is vulnerable since it makes only one product, and sales growth is slowing as vax rates plateau. Shares are down 70% from their September peak, and now Moderna’s spending billions to boost production abroad and add potential blockbuster HIV and flu drugs to its pipeline. We’ll see how those investments are tracking when Moderna reports on Thursday.

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