⬇️ Anti-’flation signals

At least AriZona cans still cost 99 cents... While the iced tea has been sold for $0.99 for three decades, the global economy has been steeped in #flation. We'll see the latest when June's US consumer price data comes out Wednesday. May’s wasn’t pretty: prices were up 8.6% from last year. For context, annual US inflation averaged less than 2% from 2010 to 2019.

• ’Flation = a global fixation. In May, South Korea's inflation hit a 24-year high, the UK's surged to a 40-year high, and Turkey had 73% inflation (not a typo).

The balloon might be shrinking... Central banks have been raising interest rates to depress prices. Last week, the Fed indicated it’ll need to speed up rate hikes if the inflation outlook worsens. But as recession fears grow, we're seeing signs prices could cool:

• Oil's dropping: This is a biggie, since oil powers everything from your deliveries to your grocery store's fridge bill. Oil had its steepest one-day drop since March last week, and US gas prices dropped 21 days in a row — the longest down-streak in over two years.
• Ditto raw materials: Prices of commodities like cotton, lumber, and copper — used in everything from motors to homes and jewelry — have plunged since May.
• Inventory's growing: From Walmart to Target, large retailers are drowning in inventory — and trying to sell it at a discount. Price-slashing could ease ’flation.
• Tariffs could be cut: The US imports a lot from China (think: gadgets, clothes, metals). Now President Biden may ease some of the tariffs boosting costs on $300B worth of Chinese goods.

Blockchange... Crypto's revolutionary ambitions are being questioned. Activists started talking about using decentralized autonomous organizations (DAOs) to financially support people seeking abortions after the decision to overturn Roe v. Wade leaked in May. Two months later, a CowgirlDAO has raised $40K+ and ChoiceDAO's aiming to raise $1M. But some crypto fans say this has been a missed opportunity to fulfill blockchain tech's anti-censorship promises.

Midsummer splurge… Bonus season is making a bonus appearance as some employers dish out extra dollars to retain workers. Last week, Peloton doled out one-time bonuses. Last month, Exxon's US employees got a bonus payout worth 3% of their salaries. And in May, Microsoft announced plans to nearly double its budget for raises. Since nearly three-fourths of workers say their salary won’t keep up with inflation, a bonus may not be enough to retain talent. Now a third of employers are considering midyear raises.

At least the Biscoff cookies are free… Delta drops earnings on Wednesday, at a time when “upsell” revenue has surged to make up 15% of sales for airlines (think: extra legroom, early boarding, $5 headphones). Delta lost $780M last quarter, but was profitable in March as pricey airfares and packed flights offset fuel costs. Still, Delta and others are struggling to meet hot summer demand (which is back around pre-pandemic levels) as labor shortages persist. We’ll see whether thousands of delays and cancellations hit Delta’s earnings.

Watching that credit-card APR rise like... that’s a lot of interest. All eyes are on big-bank earnings this week, with Citi, Wells Fargo, BlackRock, Morgan Stanley, and JPMorgan dropping #s. Big-bank profits fell in the first quarter, and a looming econ downturn could add to their troubles. Think: less revenue from deal-making, trading, and loans (mortgage lending has dropped as rates rise). JPMorgan cut hundreds of employees in June, and more Wall Street layoffs are likely. Analysts expect earnings to come in slightly lower than initially forecast.

• Nev: Tesla’s quarterly deliveries fell for the first time in years as it dealt with global production woes and mounting competition from Chinese “new energy vehicle” companies like Buffett-backed BYD.
• Grub: Amazon’s giving Prime members a year of Grubhub+ (think: free delivery, discounts) to help justify its recent 17% Prime price hike. It’s part of a "subscription squared” strategy to keep subs loyal.
• Thieve: Hackers stole $9M from DeFi protocol Crema Finance but returned $8M, which Crema let them keep as a "white-hat bounty” reward. “Hack to return” crimes are rising as crypto laundering gets harder.

• Stretch: “Rich status” varies from state to state, but it takes $774K to feel "financially comfortable" in the US — and $4M+ to join the 1%. FYI: the median American net worth was $122K in 2019.
• Shock: Japan's longest-serving prime minister, Shinzo Abe, was assassinated on Thursday. The former PM of the world’s third-largest economy will be remembered partly for his “Abenomics” policy, which helped revitalize Japan’s growth.
• Quit: Recession fears are high, but the rate of US workers quitting their jobs is high too — a sign of job-market confidence. Despite cuts at companies like Netflix and JPMorgan, layoffs remain at historic lows.

• Monday: Earnings expected from PriceSmart and Greenbrier Companies
• Tuesday: NFIB small-business index. Earnings expected from Pepsi
• Wednesday: June consumer price index drops. Earnings expected from Delta, Infosys, Fastenal, and Unity Bancorp
• Thursday: Jobless claims. Earnings expected from JPMorgan Chase, Morgan Stanley, First Republic Bank, Taiwan Semiconductor, and Cintas
• Friday: Earnings expected from UnitedHealth, Wells Fargo, BlackRock, Citigroup, BNY Mellon, and State Street

Authors of this Snacks own: shares of Exxon, Amazon, Netflix, Delta, Microsoft, Walmart, Twitter, and Tesla

ID: 2284430