🧯 Market meltdown

Sea of red… Yesterday all three major US indexes closed at least 2.6% lower, with the Dow and S&P 500 posting their worst days since 2022. The tech-heavy Nasdaq 100 had its worst start to a month since 2008 as investors pulled out of high-flying mega-caps like Apple and Nvidia. And the Nasdaq Composite is in a “correction” (down 10% from recent highs). All the commotion drove the VIX — Wall Street’s “fear gauge” — to its highest level since 2020. Meantime, bitcoin briefly dipped under $50K, and the crypto market lost about $367B in value.

• Tokyo rift: Japan’s Nikkei index plunged 12% for its worst day since 1987 as the country’s currency quickly appreciated. Last week, Japan raised its interest rates to 15-year highs, and investors unloaded popular “carry trades” of the Japanese yen.

• Seeking shelter: Investors fled to US Treasury bonds as a safe haven from the fallout, driving the 10-year yield to its lowest level in over a year (yields fall as bond prices rise).

Bad news is bad again... For a while, investors took a “bad news = good news” approach to economic data because it made Fed interest rate cuts seem more likely. But now that a September cut is widely expected, bad news is starting to stoke recession jitters. Stocks plunged after Friday’s July jobs report, which was a major bummer (unemployment hit the highest level since 2021). With rates still at 20-year highs and recession fears roiling, traders are betting the Fed will make an “emergency cut” before its next meeting. It would be the first out-of-cycle rate cut since the onset of Covid in 2020.

King-size candy deal… Snickers and M&M’s maker Mars is said to be considering buying Kellanova in a deal that could value the snacks biz at $30B, far above its current $22B market cap. Word of the possible purchase sent shares of Kellanova — which makes kitchen pantry faves like Pringles, Cheez-It, and Pop-Tarts — up 16% yesterday (while the rest of the market saw red). If it happens, the deal would be one of the largest ever in the packaged food game. Privately owned Mars said its revenue hit $50B last year (quadruple Kellanova’s sales).

• Kellawho? Cereal colossus Kellogg split into two last year, with its snacking biz becoming Kellanova and its cereals falling under WK Kellogg.

• Savory play: With cocoa prices hitting record highs this year, Twix and Milky Way maker Mars may see Kellanova as a way to diversify from chocolate.

• On trend: Snack-quisitions are on the rise. Last year Jif-peanut-butter maker J.M. Smucker said it would buy Hostess for $5.6B.

At risk of going stale… Snacking spiked during the pandemic as homebound folks stocked cupboards with nonperishable treats to enjoy on the couch. More recently, inflation-weary shoppers have been cutting back on name-brand treats. Mondelez, which makes Oreos and Ritz crackers, said last week that its second-quarter sales and volumes fell. Kellanova also reported lower Q2 sales, though North America sales ticked up.