📦 Black Friday goes cyber
Hey Snackers,
Even Florida isn’t immune to crypto winter’s chill: Miami nightclubs are mourning the absence of big-spending cryptopreneurs. No more bitcoin-sponsored bottle service?
Stocks sank yesterday after Fed officials hinted that high rates might stick for a while. Crypto had its own rough day as bitcoin and ether slid following news of crypto lender BlockFi's bankruptcy.
Black Friday sales break online records as Americans keep click-shopping while margins get slimmer
’Tis the season to splurge… and inflation-stressed US shoppers still have the urge: shoppers spent a record $9B online on Black Friday, and yesterday’s Cyber Monday sales were expected to hit a record $11B. Thanks partly to deep discounts, sales of Apple MacBooks, Dyson gadgets, drones, and gaming consoles soared, while toy sales quadrupled.
- Mobile mania: Consumers did nearly half their Black Friday shopping from their phones — a new record.
- Buy now, pay later payments rose 78% from the previous week as consumers continued to grapple with high prices.
Holiday hype may not last… Strong post-Thanksgiving sales were a bright spot for retailers, which had given cloudy forecasts for this holiday season: Target, Macy’s, Nordstrom, and others reported slow sales in October and early November as consumer sentiment dipped. Now retailers are trying to unload their inventory — and stay rid of it:
- Deeper discounts: This year the average Black Friday discount ticked up to 30%+, Salesforce data showed. Translation: retailers want to ditch piles of summer goods.
- Stricter returns: About 60% of retailers surveyed are adopting stricter policies to cut costs (think: fewer free returns).
More sales ≠more profits… because discounts mean slimmer margins. Despite this past week’s strong (cough, inflated) sales, analysts actually expect holiday sales to fall this season when adjusted for inflation — which would be the first holiday drop since 2009. That could spell tough times ahead for mega-retailers like Target and Walmart, which may end up with punier profits if they’re forced to keep slashing prices to move merch.
China's “zero-Covid” protests send jitters through global markets as the second-largest economy falters
Eruptions in the east… From Beijing to Shanghai, thousands of Chinese residents took to the streets (and social media) over the weekend to protest the country’s strict zero-Covid policies. Some called for President Xi to step down. China has extended lockdowns and tightened restrictions in certain areas after reporting 253K+ Covid cases over the past three weeks. Now things may be reaching a breaking point:
- On Thursday a fire in China's western city of Urumqi killed 10 people trapped in a high-rise building, which was under partial lockdown and reportedly inaccessible to first responders.
- It’s a big deal: The deadly fire sparked mass protests to Xi’s authoritarian government on a scale not seen in decades.
- In markets, stocks sank yesterday while oil fell to its lowest level since January, as investors feared that China’s domestic conflict could jolt the global economy.
The Covid fallout… Earlier this month China said it would ease some quarantine rules to curb the economic damage. But its plans have been thwarted by outbreaks in 80 of its cities, which generate half of China’s GDP. It’s hurting the economy:
- Last month, China’s retail spending shrank by 0.5% from a year ago, the first decline since May. Meanwhile, China's exports dropped for the first time since 2020.
- China's economy is expected to grow about 3% this year — nearly half of the 5.5% expected in March.
China could be at a tipping point… While its strict Covid policy has crippled global supply chains and companies including Apple, it’s affecting Chinese citizens the most. Though some analysts say the unrest could cause Xi to crack down even further, others are optimistic that the protests could spur the government to unwind some of its policies.
Heard on the Block: "contagion"
🤧 Like when your coworker shows up to the office with the flu…
Because crypto's so interconnected, one big incident (like a bankruptcy or hack) can act as a "contagion" spreading across the industry and getting others sick. Case in point: crypto lender BlockFi filed for bankruptcy yesterday, citing "significant exposure" to the contagion of bankrupt exchange FTX.
What else we’re Snackin’
- Shpd: Tech companies are rerouting chip shipments from train to trucks ahead of a possible rail strike, which could bring freight transport to a halt next week unless a deal is reached.
- Win: Casino stocks including Wynn and Las Vegas Sands rose after the Macau government renewed their licenses. Part of the deal: operators agreed to invest in non-gambling draws (think: theme parks).
- Oof: Balenciaga pulled ads featuring children holding stuffed animals with leather straps after public criticism. Kim Kardashian said she's reevaluating her brand-ambassador role.
- Slick: The White House gave Chevron the go-ahead to pump in Venezuela again. But new oil won't hit the US market soon: busted equipment and staffing problems mean any market effects may take a while to be felt.
- Stealle: Banks like Wells Fargo and Bank of America are devising a blueprint to refund customers scammed into sending fraudsters $$ via Zelle. The Venmo rival did $490B in transactions last year.
Tuesday
- Earnings expected from Intuit, Workday, CrowdStrike, and NetApp
Authors of this Snacks own: bitcoin and ether and shares of Apple, and Walmart
ID: 2613241