🛢️ Biden taps the reserves
Hey Snackers,
We’ve heard your feedback loud and clear, so we’re changing our name to Robinhood Meals. We’re excited to bring you the long, dense stories you crave — stuffed with tasty jargon. Enjoy your first Meal. Estimated read time: 4 hours and 43 minutes.
Stocks slumped to end the month and the market’s worst quarter in two years. The Dow and S&P 500 are down about 5% this year, while the techy Nasdaq dropped 10% (#corrected).
Biden is ordering the largest-ever release from the US’ oil stockpile, but Pump Anxiety relief might be limited
Let it flow… The White House is heading back to the country’s emergency oil stockpile, in a push to pump the brakes on soaring gas prices that have Americans fuming (FYI: it’s an election year). President Biden authorized tapping 1M barrels/day from the strategic petroleum reserve for six months (total: 180M barrels). It’s the largest release ever, and the third time the SPR has been tapped in the last six months. Refresher:
- Sweet: Just like Canada keeps a strategic maple syrup reserve (#priorities), the US has four underground sites along the Gulf Coast with capacity to store 700M+ barrels of oil.
- Sour: The SPR was created in 1975, during another global oil crisis. Presidents have hit up the SPR a couple dozen times since then, mostly after supply-disrupting events like hurricanes or war.
Insatiable appetite… The US consumes 20M barrels of oil every day. Adding 1M barrels to the daily supply could lower crude prices, which would trickle down to the pump. But it’s not a sure bet: oil prices are set on complex global futures markets, and many analysts expect any dips to be temporary. When Biden last released 50M barrels from the SPR, it barely budged the price of crude. Tapping it again could bring short-term relief to consumers, which could help Dems in November.
Oil doesn’t grow on trees… While Russia’s war in Ukraine is aggravating the oil crunch, oil anxiety started early in the pandemic when demand collapsed, driving down prices. US oil producers got burned and have exercised restraint ever since, pressured by investors to maintain “capital discipline” (read: drill less, reinvest more). Surging prices give oil companies an incentive to drill more. But drillers are still reluctant, and would take months to ramp up.
Formula 1 racing is gaining major US traction thanks to Netflix, Vegas, and younger marketing
Life is a highway... or a race track. NASCAR driver Ricky Bobby hated Formula 1 in “Talladega Nights,” but Americans are loving it. That's why F1 just added a race in Vegas that’ll debut in November 2023.
- Fast: The 3.8-mile street course will run along the Vegas Strip, passing landmarks like Caesars Palace and the Bellagio Fountain (top speed: 212 mph).
- Furious: Vegas will be F1’s third race in the US — that’s more F1 races than any other country. F1's other US Grand Prix's are in Austin and Miami.
- Too fast, too furious: F1′s first race in Miami this May sold out in a day. The GP in Austin last year had 400K+ fans — the most-attended race in F1's 70-year history.
NASCAR has #StreamEnvy… so does IndyCar. The US has become F1's fastest-growing market, largely thanks to Netflix. Interest in F1 has soared since Netflix's docuseries “F1: Drive to Survive” premiered in 2019.
- Rewind to 2016: Liberty Media, the public company that owns the Atlanta Braves and SiriusXM, bought Formula 1 for $4.4B.
- Back then, F1 had 100M global viewers per race — but US interest was weak, F1 was under-monetized, and fans skewed older.
- New strategy: Slick marketing with a focus on young Americans boosted F1’s US fanbase and made it the fastest-growing major sport on social media.
If you wanna go big, go broad… F1 used to be seen as a Euro-centric luxury sport for the wealthy (think: Rolex ads, races in Monaco). But one Netflix series and a strategy shift later, F1 fans are younger and more diverse (average age: 32). By focusing on US expansion, Liberty Media is accessing an economy that’s 6-7X larger than any European country. And Liberty’s Formula One Series C shares are up 60% in the past year.
What else we’re Snackin’
- Rough: Wall Street’s not the only one in the red. Stocks in China had their worst quarter since 2015, with two of the biggest indexes dropping 15%+ as Covid surges led to widespread closures.
- Escrow: Mortgage rates continued to rise at the fastest pace in a decade, with the average rate on a 30-year fixed rising to 4.67%. Higher interest rates usually cool home demand, but that’s not happening (for now).
- Swab: Walgreens stock fell 6% after the chain delivered a strong quarter but warned its pandemic boost wouldn’t last. Sales jumped as sniffly customers stocked on Covid tests and cold meds.
- iBank: Apple’s slowly turning into a bank. The Fruit is reportedly working on its own payment processing tech and other financial tools that could eventually let it replace Apple Pay partners like Goldman Sachs.
- Water: Mark Zuckerberg said he tries to surf or hydrofoil for an hour every morning to prepare himself for getting “punched” by the day’s news. Zuck opened up about his routine on a recent Tim Ferriss podcast.
Friday
- First day of Financial Literacy Month
- March jobs report
- Earnings expected from: China Petroleum & Chemical Corporation
Authors of this Snacks own: shares of Apple
ID: 1