đź’Ľ Cooler inflation meets hot jobs
Hey Snackers,
Google’s yearly top trends included a “hum to search” category that lets us see what was stuck on repeat in people's heads. Coming in at #1 was “Everybody” by the Backstreet Boys — aka "hm hm hmmm hmm."
Stocks fell for the week as the Fed hinted it would continue to raise rates in the new year — beyond what analysts had thought. Meanwhile, the consumer-price index rose more slowly than expected. About that…
Cooling inflation and a hot jobs report prompt soft-landing talk, but the “vibecession” is hard to shake
Hot jobs eats… meet cool inflation treats. Last week's strong jobs report surprised analysts expecting higher unemployment #s. Instead, new claims fell to their lowest level since September. That's not all: last week's inflation report showed that prices grew more slowly in November than experts had predicted (think: 7.1% in a year vs. 7.3%). Now some Wall Street analysts hope the US economy can avoid a recession with a Goldilocks-like "soft landing" (picture: a controlled economic slowdown).
- Threading a needle… while doing cartwheels. Soft landings are difficult to pull off. They're rare too: the last one was in 1994.
- Times’ve changed… Economists say that unlike in the ’90s, we're now facing dual supply shocks with Covid and Russia's war on Ukraine.
The “vibecession” will be televised… With wage growth lagging behind inflation and countless headline-making layoffs — 114K tech workers have been axed since March alone — the economic vibe this year has been rough. But reality's been mixed. Gas is cheaper than a year ago, and 72% of those laid-off tech workers found jobs within three months. What's more, over half of those rehired workers got a pay bump. More bright news: just last week Fed Chair Powell said new growth-rate projections are not in recession territory.
Recession worries ≠recession reality… CEOs have been forecasting economic doom and gloom for months. In June, JPMorgan's CEO warned of an economic "hurricane," and last week United Airlines' CEO said the company was preparing for a "mild recession." A recession could still happen. But it's also possible that the Fed's ongoing rate hikes could work as intended: slowing the economy down just enough for the fabled soft landing.
Coming up this week...
All aboard… cruise szn is back on. After the pandemic forced ships to dock for nearly three years, companies like Carnival have sailed back to record bookings. Last quarter, the world’s biggest cruise operator saw its revenue jump 700% to $4.3B as more travelers hit the seas. Still, Carnival shares lost over half their value this year as the biz navigated higher costs (like: oil and gas) and lingering Covid disruptions. But as the travel boom heats up again, analysts expect smoother sailing and revenue growth when Carnival reports on Wednesday.
Stories we’re watching...
$6 mozz sticks… $5 delivery fee. NYC could soon let food-delivery apps charge restaurants more. Refresher: when the pandemic hit, lawmakers limited fees to 20% in the US's largest food-delivery market. Now Grubhub and DoorDash are pushing a bill that would let them charge more $$ for perks like marketing. Supporters say the bill could help small eateries get greater exposure, while critics say it favors big franchises that can afford to splurge. The clock’s ticking: delivery apps hope that extra fees can help offset the higher wages that could go into effect in Gotham early in the new year.
Last week's highlights...
- Bust: Federal prosecutors brought criminal charges against crypto "wunderkind" Sam Bankman-Fried last week. Lawmakers and regulators could crack down on other centralized crypto players next.
- Power: The US Department of Energy announced a milestone last week in the development of fusion energy. But commercial nuclear-fusion tech (picture: electricity, heating homes) could be decades away.
- Lux: More Americans are heading to Europe to splurge at designer stores, courtesy of the strong dollar. While the shopping spree is great for European retail, it could discourage tourism and spending in the US.
What else we’re Snackin’
- IOU: The Small Business Administration issued nearly $400B in loans for small businesses and nonprofits during lockdown. But bills are coming due, and as businesses struggle to reach prepandemic profits, making payments could be tough.
- VIP: With business travel on the mend, jet-setting remote workers are helping to supercharge travel demand. For some airlines, “bleisure” travelers make up nearly half of revenue as they splurge on extras (like: more legroom).
- Charge: The DOJ and SEC charged eight influencers in connection with a $100M securities-fraud scheme. Authorities say the social stars (aka “finfluencers”) used Twitter and Discord to get new traders to buy penny stocks.
This Week
- Monday: NAHB home builders' index. Earnings expected from Heico
- Tuesday: Earnings expected from Nike, General Mills, FedEx, Blackberry
- Wednesday: Earnings expected from Carnival, Micron, Cintas, and Rite Aid
- Thursday: Jobless claims. Earnings expected from Paychex and CarMax
- Friday: New-home sales
Authors of this Snacks own: shares of Blackberry
ID: 2645151