__’Twas Elon-g year…__ Between launching rockets, running __[Tesla](https://robinhood.com/stocks/TSLA/)__, and buying __[Twitter](https://robinhood.com/stocks/TWTR/)__, it was a very long year for Elon Musk. Tesla kicked off the brand-spanking-new year by reporting its latest delivery numbers. The EV pioneer [unloaded](https://www.cnbc.com/2023/01/02/tesla-tsla-q4-2022-vehicle-delivery-and-production-numbers.html) 1M+ cars for the first time, but Wall Street wasn’t impressed with the final tally: Tesla stock plunged 12% yesterday — its worst drop in over two years.

- __Tesla Wrapped:__ Elon’s baby delivered a record 1.3M cars last year, up 40% from 2021. The impressive growth still fell shy of the 50% target Tesla had set. 
- __UnMuskular:__ Fourth-quarter deliveries were up 18% from the previous quarter, to 405K cars, disappointing analysts’ (already lowered) expectations. Demand for Teslas has softened as rising interest rates bite consumers.

__Less editing mode, more Ludicrous mode…__ Some investors saw the disappointing results as confirmation that Musk is too distracted with running Twitter — but Tesla’s year was a mixed bag of wins and losses:

- __Attraction:__ Tesla’s growth rate [beats](https://www.nytimes.com/2023/01/02/business/tesla-fourth-quarter-sales.html) all its major rivals, it’s one of the most profitable carmakers, and it’s boosting production at new digs in Texas and Germany.

- __Traction:__ Tesla had to halt production numerous times at its largest factory, in Shanghai, as China’s strict Covid policy continued. Meanwhile, electric-car maker BYD surpassed Tesla’s sales in China, casting doubt on its future dominance. 
- __Distraction?__ To some, Musk appears to have been preoccupied with revamping Twitter, which he bought in October for $44B. He sold billions worth of his Tesla shares to help finance the buyout.

Blue checkmarks on the brain? (Justin Sullivan/Getty Images)

Distraction

__Doing the most comes at a cost…__ because even Elon Musk can’t be everywhere all at once. Last year Tesla stock sank 67% as many investors lost confidence in the company’s future. Some worry that Musk may be focusing too much energy on Twitter — to Tesla’s detriment. The billionaire entrepreneur also runs rocket company __SpaceX__, tunnel transportation enterprise __The Boring Company__, and brain-implant startup __Neuralink__.

Tesla unwraps a yearly record, but fails to deliver a confidence boost as Elon’s Twitter era takes focus

__The cancellation before Christmas…__ Holiday festivities may be over, but lots of travelers are still recovering from a __[Southwest](https://robinhood.com/stocks/LUV/)__-flavored hangover. ICYMI: the Dallas-based airline [canceled](https://www.cnbc.com/2023/01/03/southwest-cancellations-stabilize.html) over two-thirds (think: 15K+) of its Christmas-week flights after a historic winter storm overwhelmed its operation systems and left hundreds of thousands of fliers stranded. The Department of Transportation said it’s investigating the meltdown and will hold Southwest accountable for reimbursing affected travelers. 

- __The good:__ On Monday, Southwest said its schedules were almost back to normal after it reduced capacity to recover from the cancellations.
- __The bad:__ There are still mountains of unclaimed luggage. Southwest is working with __[FedEx](https://robinhood.com/stocks/FDX/)__ and __[UPS](https://robinhood.com/stocks/UPS/)__ to return lost bags.
- __The ugly:__ The fiasco could cost Southwest $700M after covering ticket refunds and expenses like hotels and rental cars.

__Old system, new snags…__ Airlines have been historically slow to adopt new software, because bugs can lead to grounded planes and passengers. Over the years Southwest’s pilot and flight-attendant unions have complained about the airline's outdated tech. They argued that it left the company vulnerable and that updating it should be a higher priority than shareholder perks (picture: dividends). Analysts expect the holiday tailspin to slash nearly a tenth of Southwest’s earnings when it reports this month.

Baggage

__Failure to upgrade can mean a major downgrade…__ Some experts say Southwest and other airlines have prioritized upgrading customer-facing systems (like: reservations and loyalty programs) over its back-end systems. While tech hiccups aren't usually a deal breaker in daily airline operations, they can be catastrophic when combined with outside disruptions like last month's massive storm. Southwest's fallout could spur other airlines to update their systems — or risk being grounded by customers.

Southwest’s holiday meltdown could cost it $700M — and serve as a cautionary tale for other airlines

📠 *Like an office worker endlessly scanning and uploading docs…*

Crypto lives on the blockchain, but some smart contracts depend on real-world (aka "off-chain") data. An oracle is a third party responsible for providing off-chain info like sports scores, weather, and the price of gold to smart contracts like prediction markets or digital casinos. Oracles are increasingly seen as a crypto security [weak spot](https://www.bloomberg.com/news/articles/2022-12-28/crypto-trader-charged-with-fraud-in-110-million-alleged-mango-markets-scam).

DEFI(NE)

Heard on the Block: "oracle"

Tesla unwraps an annual record, but fails to deliver an investor-confidence boost

Dow Jones

S&P 500

Nasdaq

Bitcoin

80% of people who make a New Year’s resolution give up by mid-February

🚗 Tesla’s mixed delivery

- __AI gets (scary) creative…__ [Generative AI](https://snacks.robinhood.com/newsletters/3WEG5SgBgeQScK91kmZwOc/articles/6gWjpZswZYcdRi0vcvZQos/), which can convert text prompts into images and articles, made a splash last year. __OpenAI__ [released](https://snacks.robinhood.com/newsletters/1tqjd2M4HaTR4MDXIMoYcr/articles/7IJUQSHnMsihoZe3E8Wbv2/) its futuristic chatbot, ChatGPT, to the public last month, shortly after launching its image generator, DALL-E. The impressive tools caused shock and awe — *and* raised fears they could replace creative professions like copywriting and design (__Jasper__, a genAI tool used for marketing copy, hit a $1.5B valuation). Some teachers are convinced genAI will kill homework too. While unknowns abound, investment is booming as companies seek innovative ways to automate work. 

- __Crypto rediscovers its roots…__ The [collapse](https://snacks.robinhood.com/newsletters/5oS3vfl3q3m34Ud64MuTOf/articles/6GVY28qbI5kcW4Y5gvzbIM/) of centralized crypto players like __FTX__ and __Celsius__ breathed life back into crypto's core conceit: decentralization. Decentralized exchanges (think: not run by a biz) like __[Uniswap](https://robinhood.com/crypto/UNI/)__ saw activity spike — briefly surpassing centralized __[Coinbase](https://robinhood.com/stocks/COIN/)__ in ether trading — as people sought greater control of their crypto. Makers of self-custody hardware wallets (picture: no exchange needed) reported soaring sales, while decentralized-finance transaction volumes jumped 68% from October to November. The decentralized momentum could get a boost as bipartisan lawmakers push tighter crypto regs.

Jetsons vibes (MR.Cole_Photographer/Getty Images)

NEXT YEAR

The future is now…

- __Transpo goes auto…__ Transportation goes autonomous — of packages *and* people. First, drone deliveries could go mainstream. Last month __[Amazon](https://robinhood.com/stocks/AMZN/)__ began dropping parcels with its Prime Air service. __[Walmart’s](https://robinhood.com/stocks/WMT/)__ expanding its DroneUp network while __[Google’s](https://robinhood.com/stocks/GOOGL/)__ Wing teamed up with __[Walgreens](https://robinhood.com/stocks/WBA/)__ for Dallas deliveries. Below the skies, autonomous freight trucks are expected to hit roads by next year. On the passenger side, __Cruise__ and __Waymo__ are boosting driverless rides in cities, while __[Uber](https://robinhood.com/stocks/UBER/)__ and __[Lyft](https://robinhood.com/stocks/LYFT/)__ partnered with __Motional__ to start robotaxi ride-hails next year. “Auto transpo” could ease driver shortages and backlogs.
- __A psychedelic renaissance...__ Psychedelic-drug startups (think: shrooms, LSD) have seen record investing in recent years as more health experts explore the benefits of hallucinogens. Last year, Johns Hopkins said one of its psychedelic treatments eased depression symptoms, and other experts say trippy treatments could help with anxiety and PTSD. While still illegal federally, psychedelics are decriminalized in [several](https://www.leafly.com/news/politics/where-are-psychedelics-legal-or-decriminalized-in-the-us) US cities and are approved for recreational use in Oregon and Colorado. Now the psychedelic-substances biz is predicted to grow 5X to $10B+ by 2027 — which would outpace the legal-pot industry.

IN FIVE YEARS

Around the corner…

- __The nuclear revolution…__ The future of clean energy could be nuclear. Last month scientists made a huge [breakthrough](https://snacks.robinhood.com/newsletters/7BujElyo2t6JbWrNXJ6eKK/) after successfully using a nuclear-fusion reaction to generate 50% more energy than what was required for its creation — aka "net energy gain.” Nuclear fusion releases 4M times more energy than burning oil, coal, or gas and can unlock "virtually limitless" carbon-free power. While commercial use for fusion tech (think: electricity, heating homes) is still decades away, the overall market could be worth $40T down the road. It could be a green solution to prevent energy crises.
- __Central bank digital currencies take off…__ Last year the Treasury Department kicked the [CBDC](https://snacks.robinhood.com/newsletters/1A2u0znpU82FzymAPSjQXf/articles/1L1NHg7KzXFnkMFjrjfx21/) can down the road, saying it would reevaluate the need for a government-backed digital dollar (possibly powered by crypto) in 5+ years. When it does, it may need to play catch-up. China began its CBDC test in 2020, India started testing one last year, and the European Central Bank says it's looking into CBDCs. Meanwhile, the Fed is set to launch a real-time interbank payments system this year, which suggests a digital payments overhaul of some kind is already in the works.

IN 10+ YEARS

Down the road…

6 trends that could shape the futuristic economy, from creative AI to drone deliveries

India is set to overtake China as the most populous country by 2030

🔮 The futuristic edition

__Clear out the garage…__ __[Tesla’s](https://robinhood.com/stocks/TSLA/)__ offering a rare year-end sale on its most popular cars as it looks to *supercharge* demand. Starting this week, the EV icon’s offering $7.5K off Model 3 and Model Y orders delivered in the US by the end of the month. FYI: those are Tesla’s least pricey cars, and they typically make up the majority of deliveries. The discount is double the $3,750 credit Tesla offered earlier this month (and includes 10K miles of free supercharging). Plus:

- __Charged up:__ The discount comes days after the Treasury Department delayed restrictions on EV incentives until March, so Teslas can qualify for the full $7.5K credits until then.
- __Sold out:__ Despite Tesla's history of rushing year-end deliveries to meet targets, discounts are rare for the carmaker (and may not be enough to drive sales).

__Tesla’s no good, very bad year…__ Shares of Tesla are down 60%+ this year and are on pace for their worst-ever annual performance. In October, Tesla said it would miss its delivery goals for the year as slowing growth and supply-chain disruptions hit drop-offs. Meanwhile, some customers have started to cancel or delay deliveries until the EV credits kick in next year. It’s not the only speed bump:

- __Investors say:__ CEO Elon Musk's controversial leadership over at __[Twitter](https://robinhood.com/stocks/TWTR/)__ could be a risk to Tesla’s brand (and sales).
- __Elon says:__ Tesla demand is still hot, and experts say the stock's troubles are due to more people moving their $$ out of equities and into savings accounts.

Just missing the bow on top (Spencer Platt/Getty Images)

Charge

__Lower prices can raise the stakes…__ Since more people have paid top dollar for new cars during the car shortage, most automakers haven't had to offer discounts. While promos could give Tesla a last-minute boost, it could also be a sign that demand isn’t quite as strong as expected. That’s bad timing with competition heating up. Some analysts say that by 2025 Tesla's share of the EV market could drop to under 20%.

Tesla’s offering a rare year-end sale on its most popular models as EV affordability and demand dwindle

Tesla’s having a surprise year-end sale, as the EV maker tries to recharge demand

Snow isn’t actually white — it’s translucent

🚗 Tesla’s having a surprise year-end sale, as the EV maker tries to recharge demand

__Flyin’ like an eagle…__ Nike’s [stock](https://robinhood.com/stocks/NKE/) jumped 13% yesterday after the sneaker icon posted fire earnings results. Nike’s revenue grew 17%, to $13B+, in the quarter ending in November, as more shoppers splurged on the swoosh. Now execs expect annual revenue to grow in the “low teens,” to notch a slight improvement over last quarter’s forecast. Plus:

- __On sale:__ Nike saw record traffic on Black Friday and Cyber Monday, with some European markets seeing shopping demand jump 75% from last year.
- __Good fit:__ Nike’s North American sales popped 39%, helping offset lower demand (and a 3% sales dip) in China, Nike’s third-largest market.
- __Overstocked:__ Nike’s inventories are still 43% higher than a year ago, but the company says it’s finally passed its oversupply peak. It's been a long time coming. 

__Checking the back room…__ for another pair of high-tops. Like many retailers, Nike’s had to manage overstock, supply-chain disruptions, and the threat of a consumer-buying slowdown. With retail inventories in the US up 17% from last year, Nike and its rivals have ramped up discounts to move extra merch. While promos can shrink profit margins, for the right brand it can also boost demand. Case in point: Nike’s cheaper price tags sparked record growth for its digi-membership program, while its wholesale division (think: __[Foot Locker](https://robinhood.com/stocks/FL/)__, __[Finish Line](https://robinhood.com/stocks/FINL/)__) saw a 19% sales jump.

Fresh workout threads (Mattia Pistoia/Getty Images)

Sneaks

__A step in the right direction…__ As the world's largest athletic-apparel company, Nike is a bellwether not only for retailers but also the economy. For rival brands, Nike’s strong earnings could be a sign that while inventories are still high, there may be greater demand for their products in the near future. For investors, it suggests that even as recession fears loom, the consumer’s still willing to splurge on the right brand (and price tag).

Nike posts slam-dunk earnings as strong demand helps counter inventory woes — and reveals a bright spot for consumer spending

Nike posts slam-dunk earnings as strong sneaker demand helps counter inventory woes

A World Cup Instagram post by Lionel Messi is the most-liked ever

👟 Nike tackles inventory woes

__Skipping the intro…__ and the ads along with it. __[Netflix's](https://robinhood.com/stocks/NFLX/)__ new advertising-supported tier, launched early last month, accounted for only 9% of November sign-ups, according to [estimates](https://www.wsj.com/articles/netflixs-ad-supported-tier-was-its-least-popular-plan-in-launch-month-analytics-firm-estimates-11671539939). The $7-a-month plan represents the Flix's bid to diversify revenue and pull in more subscribers with a less expensive offering. It came toward the end of a roller-coaster year for the streamer, which included subscriber losses and layoffs. Now, some early results are in:

- __Press save:__ 43% of new ad-tier subscribers downgraded from an existing Netflix plan. 
- __Cord *and* cost cutting:__ The other 57% of sign-ups were a combo of brand-new subscribers and people rejoining after previously canceling subs.

__Binge-watching…__ your fave 30-second commercials. Netflix isn't the only streamer to offer an ad-supported tier, but it is arriving late to the party. As of last month, more than 20% of rival HBO Max's subscribers were estimated to be on its ad plan (which launched mid last year). That # is 57% for Hulu subscribers, and 90% for Peacock. Still, Netflix has lots of room to grow: it boasts 223M subscribers (as of September) vs. HBO Max owner __[Warner Bros. Discovery's](https://robinhood.com/stocks/WBD/)__ 95M — both of which dwarf Peacock's 18M.

*Click* (Chesnot/Getty Images)

Pause

__Ads are a vital tool in streamers' arsenals…__ if they can figure out how to wield them. Companies like Netflix are battling pervasive subscription fatigue and inflation headwinds (picture: higher prices squeezing customers' entertainment budgets). Ad-supported tiers represent a way both to woo on-the-fence viewers and to retain those looking for the exits. But as Netflix's early #s suggest, they can cut both ways: cheaper options might cannibalize existing premium customers. Meanwhile, the Flix said it's "very early days" for its ad-supported plan, suggesting the ad-based streaming surge is only just beginning.

Netflix's ad-supported plan arrived with a thud as streamers battle inflation and subscription fatigue

Netflix's ad-supported plan meets subscription fatigue as streamers bet on ads

In 1965 “Jingle Bells” became the first song to be performed in space 

🍿 Netflix's ad flop

__Watch out, kids…__ there's a new demo taking over toy aisles this holiday szn. A recent [report](https://www.cnbc.com/2022/12/19/kidults-biggest-sales-driver-toy-industry.html) said "kidults" (aka people aged 12+) now make up a fourth of all US toy sales and 60% of the industry's dollar growth. FYI: People typically drop off from buying toys in their early teens, but that trend’s shifting.

- __Adult prices:__ While US toy sales fell slightly in the first nine months of this year, inflated price tags helped to drive revenue 3% higher.
- __Childhood dreams:__ Kidults account for just 5% of global toy sales, but generate $9B in annual revenue.

__Three-hour checkout line…__ for an $850 Millennium Falcon Lego set. The pandemic was a boom time for the toy biz, as home-bound adults splurged on board games and 1K piece puzzles. And the popularity looks to have stuck: last year, the global toy market had its best sales in a decade, with the US driving most of the growth. Now toy makers are creating more adult-friendly products to capture grown-ups' inner child (and their wallets).

- __Lego,__ the world’s largest toy maker, posted record sales in September as adults splurged on "Harry Potter"- and "Star Wars"-themed sets.
- __[Build-A-Bear](https://robinhood.com/stocks/BBW/)__ says 40% of its sales now come from adults and teens, up from 20% in 2012.
- __[Hasbro](https://robinhood.com/stocks/HAS/)__ and __[Mattel](https://robinhood.com/stocks/MAT/)__ ramped up marketing for __[Disney’s](https://robinhood.com/stocks/DIS/)__ Marvel superheroes figurines, and ’90s toy icons like Barbie, __Pokémon__, and Hot Wheels.

And a little somethin' for yourself (John MacDougall/Getty Images)

Play

__Toy lovers are growing up…__ and the industry's following suit. Serving kidults is becoming a winning strategy as they’re seen as willing to spend serious $$ on themselves. (Even __[McDonald’s](https://robinhood.com/stocks/MCD/)__ started selling adult happy meals.) The kidult demo could be extra important for toymakers this holiday szn, as many expect the game-lovin' grown-ups to purchase toys for the kids *and* fellow adults in their lives.

“Kidults” are driving the toy industry as older shoppers splurge on superheroes and building sets

🧸“Kidults” are driving the toy biz, as older shoppers splurge on superheroes and building sets

Global coal use is set to hit a record high by year's end

🧸 The “kidult” toy takeover

__Hot jobs eats…__ meet cool inflation treats. Last week's strong jobs report [surprised](https://www.bloomberg.com/news/articles/2022-12-15/us-jobless-claims-unexpectedly-drop-to-lowest-since-september) 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](https://nymag.com/intelligencer/2022/08/recession-or-vibecession.html)” 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.

Practically givin' it away (Brandon Bell/Getty Images)

Mixed

__Recession worries ≠ recession reality…__ CEOs have been forecasting economic doom and gloom for months. In June, __[JPMorgan's](https://robinhood.com/stocks/JPM/)__ CEO warned of an economic "hurricane," and last week __[United Airlines'](https://robinhood.com/stocks/UAL/)__ 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.

Cooling inflation and a hot jobs report prompt soft-landing talk, but the “vibecession” is hard to shake

__All aboard…__ cruise szn is back on. After the pandemic forced ships to dock for nearly three years, companies like __[Carnival](https://robinhood.com/stocks/CCL/)__ 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.

Events

Coming up this week...

__$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](https://robinhood.com/stocks/GRUB/)__ and __[DoorDash](https://robinhood.com/stocks/DASH/)__ 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.

Zoom Out

Stories we’re watching...

- __[Bust](https://snacks.robinhood.com/newsletters/3kOsGkEHbBt1CqkaBXzvxc/articles/6NgSN4kssplfENc3RTUY6p/):__ 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](https://snacks.robinhood.com/newsletters/7BujElyo2t6JbWrNXJ6eKK/):__ The US Department of Energy announced a [milestone](https://www.bloomberg.com/news/articles/2022-12-13/nuclear-fusion-energy-will-likely-take-decades-to-reach-commercial-viability) last week in the development of fusion energy. But commercial nuclear-fusion tech (picture: electricity, heating homes) could be decades away.
- __[Lux](https://snacks.robinhood.com/newsletters/4Jy0RmQnV60oK4MUgx5hqa/articles/7driDwhdTnucdUECh5IdPQ/):__ 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.

ICYMI

Last week's highlights...

Inflation and job numbers prompt soft-landing talk, but the “vibecession” is hard to shake

Argentina’s World Cup title victory yesterday was the first for superstar Lionel Messi and the third win for his country since 1978

💼 Cooler inflation meets hot jobs

__Airline elite status…__ just got harder to score. Yesterday, __[American Airlines](https://robinhood.com/stocks/AAL/)__ rolled out big [changes](https://www.cnbc.com/2022/12/15/american-airlines-frequent-flyer-status-becomes-harder-to-earn.html) coming to its loyalty program next year that include upping the cost of elite status. Notably, American says its loyalty program, AAdvantage, is the largest in the industry. In addition to the price bump, American plans to cut some lower-end rewards: 

- __Wave goodbye:__ American’s ditching its MileSAAver and AAnytime programs, which let passengers swap miles for tickets at a discounted rate. Instead, American said it would offer “web specials."
- __Say hello:__ In March, fliers will need 40K loyalty points to qualify for gold status, up from 30K. Gold fliers are the bottom rung of the AAdvantage status ladder, getting perks like seat changes and priority check-in.

__Free pinot in the lounge…__ better get in line. Loyalty programs were a buoy for airlines during the pandemic as companies lowered status requirements to lure customers. But as travel demand takes off again (and airfare hits record levels), more fliers are turning to travel cards for cushiony perks like lounge access. For some airlines, those perks have proved a little *too* popular: 

- __Last month,__ __[Delta](https://robinhood.com/stocks/DAL/)__ said its SkyMiles members must have elite status to buy airport-lounge memberships as its clubs fill up. Meanwhile, next year its highest-tier Diamond members will have to spend 33% more to keep status.
- __[Alaska Airlines](https://robinhood.com/stocks/ALK/)__ will start limiting lounge access for first-class passengers based on how far they’re traveling.

Lookin’ for the lounge (Andrew Caballero-Reynolds/Getty Images)

__Exclusive perks mean exclusive prices…__ The airline industry is finally expected to return to profitability next year after a three-year pandemic slump. With over a quarter of Americans signed up for travel-based credit cards, airlines could raise the bar for gaining status — and perks — even higher in the future.

American Airlines revamps its loyalty program as the travel boom prompts airlines to get pickier about perks

- 🧐 __Privacy…__ __[Coinbase](https://robinhood.com/stocks/COIN/)__ said law-enforcement requests for user data [spiked](https://www.theblock.co/post/194204/coinbase-law-enforcement-requests-jumped-66-over-the-past-year) nearly 70% from last year. The exchange said most of the requests, which came both from US and global officials, involved criminal investigations.
- 📜 __Policy…__ Sen. Elizabeth Warren [introduced](https://decrypt.co/117221/senator-warren-crypto-bill-kyc-self-custody-wallets) bipartisan legislation targeting non-custodial wallets. The bill drew intense pushback, with advocacy group Coin Center, which is funded by crypto companies and investors, calling it "unconstitutional."
- 🤖 __Techy…__ __[Microsoft](https://robinhood.com/stocks/MSFT/)__ said it's [banning](https://www.coindesk.com/tech/2022/12/15/microsoft-bans-crypto-mining-on-its-online-services-without-permission/) crypto mining on its cloud service (at least without explicit approval first). The tech behemoth follows __[Google](https://robinhood.com/stocks/GOOGL/)__ and __[Amazon](https://robinhood.com/stocks/AMZN/)__ in saying customers can't use their online services for mining.

Mined

The Crypto Catch-Up…

American Airlines is revamping its loyalty program as airlines get pickier about perks

23% of US adults recently surveyed said buying real estate is the best way to build wealth

✈️ American’s rewards revamp

__Sounds like the plot of "Iron Man"…__ actually real life. This week the US Department of Energy announced a [milestone](https://www.bloomberg.com/news/articles/2022-12-13/nuclear-fusion-energy-will-likely-take-decades-to-reach-commercial-viability) in the development of fusion energy. For the first time, scientists successfully used a nuclear-fusion reaction to generate 50% more energy than what was required for its creation — aka "net energy gain" — paving the way for sustainable clean power. Nuclear fusion (imagine: atoms fusing together) occurs naturally in the sun and releases 4M times more energy than burning oil, coal, or gas. Experts say it could unlock "virtually limitless" carbon-free power.

__The nuclear evolution…__ has been a long time coming. For decades, scientists have researched ways to harness nuclear power (like the more familiar nuclear *fission*) in hopes of producing alternatives to fossil fuels. Now, investors are on course to have put $1B+ into fusion tech this year, driven partly by growing climate-change initiatives and Russia’s war on Ukraine, which disrupted global energy supplies. That's just a fraction of the $1.4T invested this year in clean energy, but the future’s bright:

- __Atomic returns:__ The overall fusion market could be worth $40T down the road.
- __Electric possibilities:__ __[Constellation Energy](https://robinhood.com/stocks/CEG/)__, which says it's the US's largest producer of clean, carbon-free energy, said net energy gain is a “game changer” and the biggest breakthrough in 30 years.

It's powerful stuff (Olivier Douliery/Getty Images)

__It’s a small short-term step for clean energy…__ but a giant long-term leap. Even with the net energy gain breakthrough, commercial nuclear-fusion tech (picture: electricity, heating homes) could be decades away. Legislation like President Biden’s [Inflation](https://snacks.robinhood.com/newsletters/42zI4SXli5Y5q5GTnO57Hh/articles/6P1VJKtvjfjnjFHojBaGj0/) Reduction Act could help expedite the tech's development by offering tax credits for green-energy startups.

Scientists made a major breakthrough in nuclear fusion, but it'll take years to hit the grid

Scientists hit a nuclear-fusion milestone, but it'll take years to transform clean energy

Netflix said its "Harry & Meghan" docuseries set a record for hours watched in its debut week

⚛️ Fusion-energy breakthrough

__One-two punch…__ It’s a big week for markets, with back-to-back economic headliner events. Today the Fed meets on rate hikes, and its decision will likely be informed by yesterday’s inflation report. US consumer prices were up 7.1% in November from last year (vs. 7.3% expected). The pace of inflation slowed again from 7.7% in October, showing “disinflation.” 

- __Disinflation:__ Like a balloon that’s getting more inflated, but at a less noticeable pace. Prices are rising — just not as fast as they were in previous months. 
- __Deflation:__ Like a balloon that’s losing air — aka: *not* what’s happening now. Deflation is a broad drop in prices and can signal an economic downturn. 
- __Expectation:__ Investors celebrated the report because it raises the likelihood that the Fed will hike rates by 50 basis points today (vs. another 75 bps hike, as we had the past four times). 

__Potato-potahto…__ While food prices continued ticking up, price *growth* has slowed since July (potatoes led the charge, with prices falling a spudtacular 8.4% in November). Meanwhile, the energy index fell 1.6% for the month as gas and electricity prices dropped, contributing to disinflation (oil prices are actually *down* for the year). But housing and rent prices canceled out the energy cooldown, accounting for nearly half the total increase in core inflation. We’re not out of the inflated woods just yet.

#disinflation (Brandon Bell/Getty Images)

Disinflate

__Pausing ≠ reducing…__ While disinflation is happening, inflation’s still abnormally high (energy prices alone are still up 13% from last November). That’s why the Fed’s expected to keep hiking into the new year, though less aggressively. Even if Fed Chair Powell pauses hikes early next year, high interest levels could stick around until the Fed sees a meaningful cooldown in growth. And it could be a while before the Fed actually starts *cutting*.

November’s consumer prices show “disinflation,” but reaching acceptable levels could mean more pain

__Less white-sand beaches…__ more courtroom speeches. Disgraced crypto "wunderkind" Sam Bankman-Fried was [arrested](https://www.bloomberg.com/news/articles/2022-12-13/sam-bankman-fried-charged-with-fraud-by-ny-prosecutors) Monday in the Bahamas at the request of the US gov’t (see: $1B+ of customer funds missing). Instead of attending his scheduled remote testimony before Congress yesterday (with planned [remarks](https://www.forbes.com/sites/stevenehrlich/2022/12/13/exclusive-transcript-the-full-testimony-sbf-planned-to-give-to-congress/?sh=9e0014b3c474) feat. an F-bomb), the former __FTX__ CEO appeared in Bahamian court. Earlier, US federal prosecutors had charged him with numerous counts of fraud and violations of campaign-finance regulations.

- __New tech, old playbook…__ John Jay Ray III, who's overseeing FTX's bankruptcy, yesterday described the case to Congress as "old-fashioned embezzlement."
- __'Twasn't the season…__ Prosecutors accused SBF of criminal activity dating back to 2019 — long before crypto winter. 

__Everyone wants in…__ on FTX's punishment. While federal prosecutors brought *criminal* charges against SBF, the Securities and Exchange Commission filed a civil complaint charging FTX with scheming to defraud investors. Yesterday, SEC Chair Gary Gensler said SBF built a “house of cards on a foundation of deception.” Also yesterday, the Commodity Futures Trading Commission charged SBF, FTX, and __Alameda Research__ (SBF's crypto hedge fund) with fraud.

- __If convicted on all criminal charges,__ SBF could face life in prison. But he suggested in Bahamian court yesterday (notably wearing a suit instead of his trademark shorts) that he might fight extradition to the US. 
- __If he stays in the Bahamas,__ he could be sent to a prison known to be dangerously overcrowded. SBF's bail request was denied.

SBF’d

__Centralized crypto could face consequences…__ FTX was a centralized exchange (it directly held customers' funds/crypto) controlled by only a few people (vs. a decentralized exchange). The consequences it faces could set precedents for other centralized crypto players. Lawmakers and regulators like the SEC and CFTC are debating who, exactly, has crypto-oversight power. But as they consider new regulations following FTX's meltdown, they mostly now agree on at least one point: whoever has oversight, controls need to be tighter.

Sam Bankman-Fried's arrest could bring about major changes for crypto

November prices show “disinflation,” but reaching acceptable levels could mean more pain

Elon Musk is no longer the world's richest person, after Tesla shares dropped 60% this year