Hey Snackers,
High fashion's gone to the dogs: lux brands like Hermès are selling $1K+ dog bowls, $525 leashes, and a $152 poop-bag dispenser. Woof.
The major US indexes finished higher yesterday as investors prepped for a busy week of earnings reports. In the UK, bonds rallied on news that Rishi Sunak is set to become Britain’s new prime minister.
Chinese stocks plunge after Xi takes unprecedented third term, rattling global investors
The Party (meeting) is over… and Chinese companies are nursing a hangover. Yesterday Alibaba, Pinduoduo, JD.com, China Telecom, and NetEase lost $52B+ in market value, and Hong Kong’s Hang Seng index plunged to its lowest level since 2009. One reason: China’s Xi Jinping won an unprecedented third term as president and installed his loyal allies into positions of power. Here’s why that spooked markets:
- Privatization nation: Xi’s cracked down on public companies with greater regulation and strict zero-Covid policies. Now some analysts say China is “uninvestable.”
- Injured giant: This week China also reported worse-than-expected GDP growth. Yesterday Goldman Sachs’ China Index fell 20% to its lowest point in a year.
A(nother) final straw… Tensions between Washington and Beijing remain high. In recent months, Chinese companies like DiDi Chuxing have delisted from US exchanges amid pressure from both sides. The US is ramping up scrutiny of Chinese companies like TikTok parent ByteDance for national-security reasons. And this month President Biden limited exports of chips and tech to China (Samsung and TSMC got exemptions).
- Bad blood: Just yesterday, the US Justice Department charged two Chinese officials with attempting to obstruct an ongoing investigation of Chinese telecom behemoth Huawei.
China’s role on the world’s stage is shifting… but it still has a leading part. Its share of US consumer imports has fallen in recent years partly because of Xi’s strict policies. But China is still the US’s top trading partner, and trade between the two countries is actually growing in many sectors. As the second-largest economy, China is big enough to affect markets everywhere: the IMF recently cited its slowdown when it lowered its growth forecast for the coming year.
Walmart’s revamping its billion-dollar sleepwear brand as more retailers compete for the booming comfy-apparel biz
PJs all day… kind of day. Walmart’s reimagining its biggest sleepwear and intimates brand ahead of a competitive holiday season. Say goodbye to Walmart’s 20+-year-old “Secret Treasures” private label, which offered everything from robes to bras to satin sets. Say hello to Walmart’s Joyspun line, which features 300+ styles, more sizes (think: XS to XXXL) and new maternity options. Joyspun's starting strong:
- One in five cozy-wear shoppers bought something from the Treasures label last year, earning the brand $1B in sales.
- Joyspun’s splashy brand entry could lure new holiday shoppers hunting for affordable prices.
Sleepwear showdown… During the pandemic, garment retailers catered to customers' need for comfort, better sizes, and body positivity. As Americans got used to hanging (and working) from home, the comfy-clothes trend stuck: sleepwear sales jumped 52% from prepandemic levels in the first nine months of the year, while intimates grew 15%. Still:
- Rivals like Victoria's Secret also shifted their brands to be more comfortable and diverse (think: plus sizes, multi-shade bras), but it hasn't supercharged sales.
Work-from-home may not be forever… but WFH garments might be. Even as inflation-conscious shoppers watch their budgets, must-haves like underwear and socks remain nonnegotiable. By revamping an already popular brand to put comfort and affordability first, Walmart hopes to offer more inclusive options for its current customers and luxury features (like: trendy colors, lacey patterns) for its high-income shoppers.
What else we’re Snackin’
- Next: The UK gets a new PM. Again. Conservative Party member Rishi Sunak is set to become prime minister following PM Liz Truss' departure. Truss' (now abandoned) tax-cutting plan led to financial-market chaos.
- Cuta: A major Meta shareholder (think: 2.5M shares) wants the tech biz to slash 20%+ of staff costs and chill on its metaverse plan (and curb investment in it to $5B a year tops). Meta's stock is down more than 60% this year.
- NoWay: Crypto-staking platform Freeway says it froze customer withdrawals Sunday, sending its token plummeting 74%. The UK co, the latest crypto biz to freeze withdrawals, said it had processed $160M in value.
- Minus: US students' math-test scores plummeted this year. The decline happened nationwide and continued a pandemic drop in academic achievement, possibly a result of remote learning.
- IRyes: The IRS said Americans can put up to $22.5K in tax-deferred retirement plans next year (a nearly 10% boost). Those 50+ can invest up to $30K. The reason: inflation.
Tuesday
- Earnings expected from Microsoft, Google, Visa, Coca-Cola, Novartis, UPS, Spotify, HSBC, GE, 3M, UBS, Sherwin-Williams, GM, Valero, Chipotle, and Biogen
Authors of this Snacks own: shares of Walmart, Google, Spotify, and GM
ID: 2553929