🇨🇳 Big Tech: a tale of two internets

From NYC to Beijing... Big Tech earnings season is (almost) over. This month, Wall Street's "Big Tech 5" – Apple, Amazon, Google, Microsoft, and Facebook – demolished results with back-to-back records. Still, the techy Nasdaq index is up just 6% this year — half of the S&P 500 and the Dow's gains. Now, we're looking at China, to see how the world’s other tech epicenter stacked up:

• Alibaba (aka: the Amazon of China) posted its first loss ever as a public company, though sales soared 64%. Blame a record fine by China’s regulator. Shares are down 7% this year.
• Tencent is the world's largest video games publisher, and the owner of WeChat (the app for everything). Despite impressive earnings growth, shares have barely budged this year.
• Pinduoduo is the ecomm app that connects farmers/distributors with Chinese consumers. We'll see how it fared when it reports tomorrow. Shares have plunged 22% this year.

You've been warned... For years, Chinese tech titans were seen as untouchable sources of national pride. This year, China has been cracking down. China ordered 34 of the country's largest tech cos, including TikTok-owner ByteDance, to comply with anti-monopoly laws or face “severe punishment." The scrutiny is hitting companies where it hurts: their share prices and balance sheets.

• Alibaba was fined $2.8B, while Pinduoduo, ride service Didi Chuxing, and others were each fined $200K for “improper pricing behavior.”
• Fintech giant Ant Group will likely be overseen by China’s central bank, after regulators halted its mega IPO. Oh, and China wants companies to know that crypto services are still banned.

Treasure hunt vibes... Retailers' sales rebounded last quarter, as you attended your first get-together without a virtual background (bye, clouds). TJ Maxx and Ross sales soared past pre-pandemic levels on the "affordable splurge." Target shined as you caved for the floral dresses in the front. Macy's sales jumped 56% from last year, and Kohl's crushed expectations. TBD if pent-up demand will continue as stimulus benefits run out. Macy's CEO thinks it isn't a fluke.

Tim Cook-ing in the kitchen... and it's getting heated. Apple CEO Tim Cook was grilled on Friday as the Epic-Apple trial wrapped up. Cook's testimony was highly anticipated — but anticlimactic. If Fortnite-maker Epic wins the suit, Apple could be forced to give up control of app distribution. Read: customers could be allowed to freely install software on iPhones (not just through the App Store). It could be a make-or-break moment for Apple's antitrust future.

Anniversary of George Floyd's death... Tuesday marks the one-year anniversary of George Floyd's murder, which led to months of protests for racial justice across the US. Since then, American companies have pledged to spend $50B on racial equity initiatives. Yet only ~$250M has so far been spent or committed to specific initiatives, according to Creative Investment Research. Stay tuned for more coverage on whether companies have lived up to their pledges.

Buying the lip... Ulta, aka: Sephora's less flashy rival, reports earnings on Thursday. If Ulta's quarter was anything like Estée Lauder's, we can expect that skincare sales thrived, while makeup struggled (eye serum = new eyeshadow). But Walmart saw more sales of beauty products and teeth whitener last quarter. Since the CDC lifted mask mandates for fully vaxed peeps (FVPs), beauty companies are preparing for a "buy the lip" situation. Matte is already rallying.

• F-150 Lightning: Ford unveiled an electric version of the most successful car in American history (and President Biden took a joyride).
• Daenerys: AT&T's big experiment in entertainment is over — it's breaking up with WarnerMedia (and GOT).
• Crypto: Bitcoin and other cryptocurrencies plunged last week — and it's related to Elon, China, and kitchen furniture.

• Live: 50 (very short) rules for a good life, courtesy of the Stoics.
• Learn: What happens to your eyes when you stare at screens all day.
• Scroll: The world's top 50 influencers across social media platforms.
• Explore: Leo Tolstoy on kindness and the measure of love.

• Monday: Earnings expected from Lordstown Motors and Nordson
• Tuesday: 1st anniversary of death of George Floyd. Earnings expected from Nordstrom, Intuit, AutoZone, Urban Outfitters, and Zscaler
• Wednesday: Earnings expected from Snowflake, Workday, Pinduoduo, Nvidia, Honeywell, and Dick's Sporting Goods
• Thursday: Weekly jobless claims. Earnings expected from Salesforce, Costco, Ulta, HP, Dollar Tree, and Best Buy
• Friday: Earnings expected from Big Lots and Brookfield Property

Authors of this Snacks own shares of: Amazon, Microsoft, Apple, and Google

ID: 1659790