__Settled, but unsettling...__ Since 1999, the opioid crisis has claimed half a million lives in the US. Addiction to opioid drugs like OxyContin, Percocet, fentanyl, and heroin has become a national epidemic. During the pandemic, it got worse: opioid overdose deaths last year were up 37% from 2019 to a record 93K. After two years of negotiations, a few companies that have been blamed for fueling the epidemic have reached a historic $26B settlement with states.

- __Why:__ 3K+ lawsuits allege that drugmakers pushed their painkillers for uses beyond what was medically necessary, and that  distributors didn't do enough to halt the influx of pills. 
- __Who:__ Major drug distributors  __[McKesson](https://robinhood.com/stocks/MCK)__, __[AmerisourceBergen](https://robinhood.com/stocks/ABC)__, and __[Cardinal Health](https://robinhood.com/stocks/CAH)__ would together pay up to $21B over 18 years. Drugmaker __[J&J](https://robinhood.com/stocks/JNJ)__ would contribute $5B over nine years.

__A landmark deal...__ It's the second-largest settlement in US history, after the $206B deal with tobacco companies in the '90s. If completed, the settlement could end thousands of lawsuits and secure funding for communities to fight the epidemic. Think: addiction treatment programs, opioid education, and funds for first responders. In addition to the payout, distributors also agreed to create a system to help them better spot suspicious drug orders.


Pills

__Investors reward certainty...__ Despite the major price tag, shares of McKesson, Cardinal, and AmeriCorp jumped ~5% this week after reports anticipating the settlement broke — J&J stock barely budged. Meanwhile, pharma companies that *didn't* participate in the settlement — like __[Teva](https://robinhood.com/stocks/TEVA)__ and __[AbbVie](https://robinhood.com/stocks/ABBV)__ – face more uncertainty. Investors don’t know how much longer their lawsuits will last, and how much they might cost. OxyContin-maker __Purdue Pharma__ had to file for bankruptcy two years ago to handle its legal liabilities.  

The $26B opioid settlement: what it means for major drug companies and states

__More like E-lympics...__ After a year-long pandemic postponement, the 2020 Olympics kick off today in Tokyo — *minus the fans*. All spectators have been banned from this year's Games, after Japan declared another state of emergency amid rising Covid cases. Despite the lack of IRL viewers, __[NBCUniversal](https://robinhood.com/stocks/CMCSA)__ is poised to win big even before the competition begins:

- __On your mark:__ NBC owns exclusive US broadcast, online, *and* mobile viewing rights to the Games. Read: it's the only place to watch 'em. 
- __Get set:__ But not the TV kind. While TV viewership has been dropping, NBC’s YouTube subscribers jumped 7X during the Rio Games, while 35M engaged with it on Snap.
- __Go:__ For the green gold. With Tokyo, NBC has [already](https://www.adweek.com/convergent-tv/nbcuniversal-surpasses-rios-1-2-billion-advertising-haul-for-tokyo-olympics/) beat the $1.2B it earned for Rio ad sales, and expects to surpass Rio's record profit, too. 

__Think outside the cable box…__ Four billion people will watch the Olympics somehow, but NBC is getting creative about *where* and how they engage:

- __Peacock-forward:__ Men’s basketball will be paywalled on NBC’s new streaming platform Peacock. The rest of the Olympic action will be streamable for free. 
- __Platforms-a-plenty:__ 7K hours of Olympic coverage will be available across Peacock, NBC’s site, app, and several of its TV channels. 
- __Social strong:__ Partnerships with TikTok, Twitch, Snap, and Twitter will feature influencer-studded “side-streams" to draw fans into main-stream coverage.

_Ready, set, stream [Pete Saloutos via GettyImages]_

__The Dream Team is now the “Stream Team”…__ From __[Amazon](https://robinhood.com/stocks/AMZN)__ [adding](https://snacks.robinhood.com/newsletters/5RcfSbptJR29nY04J3pwJR/articles/3bBpFASXTfp5JZ1tHkHmGI/) Premier League matches and Thursday Night Football on Twitch and Prime, to __[Disney](https://robinhood.com/stocks/DIS)__ beefing up its ESPN+ offerings — streaming platforms are becoming go-tos for live sports. And live sports are becoming increasingly important to *growing* streaming subscribers. By packing Peacock with Olympic exclusives, NBC is vying for a “Hamilton moment” — a jump in paid subscribers like the 74% boost Disney+ saw after its exclusive, streaming debut of the fan-favorite musical.

NBC’s already booked $1B+ in Olympic ads, but streaming could be the real gold medal

S&P 500

Dow Jones

Nasdaq

Bitcoin

💊 Historic opioid settlement 

__It goes down in the TMs...__ Twitter Mentions. __[Tesla](https://robinhood.com/stocks/TSLA)__ will be opening its Supercharger network to other EV brands later this year. The major announcement came in the form of an Elon [reply](https://twitter.com/TesLatino/status/1417561178788741124) in a random Twitter thread (classic). 

- __By the numbers:__ Tesla has 25K+ Supercharger stalls across 2.7K locations around the globe. They can recharge up to 200 miles in 15 minutes, and Tesla says the e-juice is cheaper than gas. 
- __Bye, exclusivity:__ Tesla has marketed its exclusive charging stations as a major advantage of owning a Tesla. Think: more charging options, shorter lines, and even [cappuccinos ](https://snacks.robinhood.com/newsletters/jF3LIog2WHKh7zqo33DuG/articles/5CVPuTX83DhStDwVEAWkVj/)at Supercharger lounges for Tesla owners.  

__No such thing as a free juice...__ Especially freshly pressed e-juice. Tesla owners have the benefit of being able to power up at most EV charging stations —  *plus* Tesla stations. Why would Tesla end its exclusive charging differentiator and make it easier for people to charge *other* EV brands?

- __Charge cash:__ Even Tesla owners have to pay per minute to use Superchargers. By opening the stations to *other* EV owners, Tesla can make more charge bucks — *and* compete with brand-agnostic charging companies like __AeroVironment__, __ChargePoint__, and __Volta__.
- __Credit cash:__ If Tesla opens up more renewable charging stations in the US, it could tap in to new government funding like rebates and clean energy credits. Last quarter, Tesla made $518M from selling regulatory credits to other automakers. 


_You don't belong here [simonkr/E+ via GettyImages]_

Juice

__Tesla just made the pizza decision...__ Bigger slice or bigger pie? Tesla could stay charge-exclusive to grab more slices of the EV pie. Instead, it's sacrificing one of its biggest advantages to accelerate EV adoption. By helping cure #RangeAnxiety with Supercharger access, Tesla can help make the total EV pie bigger. Its slice of the EV market might continue getting smaller — but a smaller slice of a big pie can be more caloric than a big slice of a small pie.

Tesla is opening up its Supercharger networks to other EVs — it made "the pizza decision"

__Twitter fingers and Snap faces...__ Social media earnings season has officially begun. __[Twitter](https://robinhood.com/stocks/TWTR)__ and __[Snap](https://robinhood.com/stocks/SNAP)__ report today, so we're diving into a few key differences between the blue bird and the little ghost.

- __Users:__ Snap's daily users jumped 22% to 280M last quarter, while Twitter's jumped 28% to 199M. So far, so similar. 
- __Revenue:__ The dollars are close — the growth rate *isn't*. Snap's quarterly revenue soared 66% to $770M, while Twitter's jumped 28% to $1B.

__One ghost, one bird...__ two different growth strategies. Snap is laser-focused on delivering on its plan to increase annual revenue by 50% for the next few years, so it’s investing heavily in tools to attract ad dollars. Twitter is focused on growing users and engagement, so it's taking a more experimental "see what sticks" approach to its product.

- __Focusing in:__ Snap is focused on growing ad revenue through features like Snap Maps (it's Yelp-ifying it) and Discovery (so many ads). Recent acquisitions — like virtual clothes-fitting app __Fit Analytics__ and the 3D product imaging startup __Vertebrae__ — underscore its goal of improving formats for advertisers.
- __Focusing out:__ Twitter’s investments have been more eclectic. In January, it snagged social audio startup Breaker and newsletter startup Revue in hopes they'd drive engagement. In March, it shut down live streaming app Periscope due to low usage. And it just killed its Stories feature "Fleets" for the same reason.


Social

__"Fail fast and make things"...__ doesn’t always work. Snap’s more focused strategy is panning out better so far: its market cap is nearly double Twitter’s, and its ad revenue grew 6X as fast last year. By doubling down on one product — the camera — Snap has built lasting features for users, which means it can focus more on catering to advertisers. Until Twitter puts its core product into focus, it might continue to struggle to grow its ad biz.

Faced with a similar picture, Snap zooms in while Twitter zooms out

⚡️ Tesla shares the super charge

__Happened mRN-ASAP...__ Today, __[Moderna](https://robinhood.com/stocks/MRNA)__ joined the prestigious S&P 500 index. The "Club 500" membership gives the 11-year-old biotech some serious Wall Street cred. Trillions of dollars are invested in funds that mirror the S&P 500 index, which tracks the 500 most valuable US public companies.

- __Investors__ use the S&P 500 as an indicator for how the overall market is doing, and can invest in S&P-tracking funds, which include a combo of every stock in the index.
- __Fund managers__ now have to buy Moderna stock to track the index, so Moderna shares have popped 18% since the S&P news broke on Thursday. But S&P-joining rallies (if they happen), don't necessarily last long.

__Major booster shot...__ Pre-pandemic, Moderna was a little-known biotech startup worth $6B — with zero products on the market. In May 2020, Moderna was a $27B biotech working on a Covid vax — still, *with zero products*. Today, Moderna is a household name worth $123B, and its Covid vaccine has been injected into the arms of 63M Americans.

- __Fresh profits:__ In May, Moderna [revealed](https://snacks.robinhood.com/newsletters/7smONUNjrn1RF9LBhEgLe7/articles/4GUGqbhYGdsfyMcKDiqUuK/) a whopping $1.2B profit on $1.7B in vax sales — its first profit *ever*.
- __Fresh tech:__ __[Pfizer](https://robinhood.com/stocks/PFE)__'s and Moderna's Covid vaccines were the first mRNA vaccines *ever* approved for humans. Unlike OG vaccines which use  weakened viruses to prompt immunity, mRNA vaxes teach cells to destroy viruses. Intense.
- __Fresh pipeline:__ Moderna's [pipeline](https://www.modernatx.com/pipeline) includes mRNA vaccines for 10 viruses that are in, or nearing, human trials. 


__The power lies in the *platform*...__ Moderna's investor presentation leads with: "mRNA is a platform." The Covid vax is a billboard for Moderna's cutting-edge *platform*, which could enable it to churn out all kinds of mRNA vaccines and therapeutics in "record time." 80+ viruses have been discovered since 1980 — but you can only get vaccinated against three of those. Moderna's working on mRNA vax shots for the flu, Zika, HIV, and even cancer. But it faces plenty of risks, including unsuccessful trials and challenges with its new tech. 


Moderna joins the S&P 500 after its Covid vax success — but its real power is the platform

__Grand Theft Spin Bike...__ Doesn't roll off the tongue. __[Peloton](https://robinhood.com/stocks/PTON)__ is getting into gaming. The spin icon is [launching](https://www.theverge.com/2021/7/19/22580340/peloton-lanebreak-in-app-game-launch) an in-app video game called "Lanebreak" (ETA: early 2022). So far, it's [looking](https://www.onepeloton.com/press/articles/peloton-lanebreak) like a car wheel on a Guitar Hero chord. The rhythm-based game features a personal avatar, which you can move through tracks and obstacles to score rewards. Think: notching up your resistance to the tune of "Eye of the Tiger," or challenging capspin_america on Level 4. 

__Turn down the torque...__ Corona-conomy thrivers are starting to sweat. __[Netflix](https://robinhood.com/stocks/NFLX)__ reported yesterday that it added 1.5M paid subscribers last quarter — less than the 4M it added in the previous quarter, and waaay less than the 16M it added in the first quarter of 2020 (aka: peak lockdown). Pandemic-thriver Peloton could see a similar slowdown. 

- __Peloton saw explosive growth__ mid-pandemic, as its $2K spin bikes flew off shelves. That could end now that Soul Cycle studios and gyms are back with IRL sweating. 
- __Not just Equinox:__ The at-home competition is fierce for both Peloton and Netflix, as rivals multiplied and grew during the pandemic. 
- __A few Peloton competitors:__ Mirror, Tempo, Zwift, Echelon, and iFit, which is reportedly eyeing an IPO. Netflix competitors: anything that ends with "+."


_The Post-Couch era is coming [THEPALMER/E+ via GettyImages]_

Spin

__The Post-Couch Era demands innovation...__ Pandemic thrivers like Peloton and Zoom need to compete with IRL activities — *and* with a fresh crop of "couch era" rivals that bulked up during lockdown. That competition requires innovation in order to retain and grow customers. That's why Netflix just [announced](https://apnews.com/article/lifestyle-technology-coronavirus-pandemic-games-video-games-2482bd5c5aa65b551da95f602d6311f8) it's *also* adding video games to its streaming subscriptions, and why Zoom is [launching](https://snacks.robinhood.com/newsletters/7IXHGclHWhuwIRdIXkbPpj/articles/7yl3Ro8aKD5ZcthEt561jK/) Zoom-as-a-Service. 

Peloton races into the video game biz as corona-conomy winners lose momentum

💉 Moderna joins the big leagues

__"In the red"...__ Not a phrase we've heard recently re: the stock market. The market closed lower last week, after rallying to records for three weeks in a row. Yesterday, things got *worse* for the major stock indexes. 

- __[The Dow](https://learn.robinhood.com/articles/13urVTf3GSQYdsr7Eq5fHL/what-is-the-dow/)__ was the worst performer, plunging more than 2% in its biggest one-day drop of the year. The elite index tracks the stocks of 30 large US companies, and it's heavy on cyclicals —  aka: stocks that tend to move in tandem with the health of the economy. 
- __[The S&P 500](https://learn.robinhood.com/articles/7kFFEUv46vmMCmMfLuNiRX/what-is-the-s-and-p-500/)__, which tracks the stocks of the 500 most valuable US companies, dropped 1.6%. Travel, energy, and financial companies (all cyclicals) were the worst-performers. Airlines and cruise companies plunged. 
- __[The Nasdaq](https://learn.robinhood.com/articles/1GXPrecRfkSNp0aBblBSsL/what-is-the-nasdaq/)__, the tech-heavy index which tracks 3K+ stocks, fell 1%. 

__Cloudy with a chance of N-95 masks...__ A surge in Covid cases driven by the highly-contagious Delta variant is pouring cold water on recovery optimism. Ballooning Covid cases — mostly among the unvaccinated — in highly-vaxed countries like the US and the UK have dampened investors' expectations of economic growth. The CDC is [calling ](https://www.washingtonpost.com/health/2021/07/16/covid-cases-rising/) the US surge "a pandemic of the unvaccinated." A few big counties, including LA, brought back indoor mask mandates last week.  Meanwhile in developing countries, the situation is more dire. 


_Investors cranking out the umbrellas like [praetorianphoto/E+ via GettyImages]_

__The market mood has shifted...__ again. Stock market prices aren't just a product of fundamentals like profits, but also of human psychology.  Stocks have been basking in Caribbean-level sunshine, but investors are starting to fear clouds ahead. The VIX, which measures the stock market's expectation of volatility, has soared 36% in the past five days. As Delta rises, confidence is waning: US consumer sentiment [plunged](https://www.cnbc.com/2021/07/16/us-consumer-sentiment-drops-in-early-july-on-inflation-fears-.html) in early July to its lowest level in five months. Sharp price increases  in everyday items  could also be knocking confidence in spending. It's TBD how long this shift will last. 

Delta rises, confidence falls: a cold shower just rained on the stock market's parade

__Bringing the tractor factor...__ minus the tractor. Hardware chain __[Tractor Supply Co](https://robinhood.com/stocks/TSCO).__ sells tractor-*adjacent* products like animal feed, tractor apparel, and anything that caters to the “tractor lifestyle.” Turns out, the tractor lifestyle has been booming: TSC reported record profits last quarter after a pandemic-fueled boom in DIY projects.

__Like the Peloton of farmland...__ TSC has created a lifestyle brand focused on community — in its own words: "a rural lifestyle brand." TSC differentiates itself from competitors like __[Home Depot](https://robinhood.com/stocks/HD)__ and __[Lowe's](https://robinhood.com/stocks/LOW)__ by prioritizing farm-specific needs. A few features of its lifestyle strategy:

- __Experts:__ Just like Peloton hires aspirational instructors, TSC hires “lifestylers” with ranching and farming backgrounds to establish credibility. A description of one employee: "farmer's daughter, barrel racer." 
- __Events:__ Instead of doubling down on e-marketing, TSC partners with local orgs to host on-site events like pet clinics for your cow. As one employee put it: "Learn their pet's name, and you've got a customer for life."
- __Community:__ TSC opens stores in areas with high concentrations of cattle farmers, and has expanded its fast-growing “Neighbor's Club”  loyalty program, which already has 21M+ members.


Rollin

__Niche sounds small, but it can be big...__ Unlike Home Depot, TSC isn't targeting the needs of everyone with a house — just like Peloton isn't targeting everyone who likes to sweat. TSC's core customers [are](https://s23.q4cdn.com/539497486/files/doc_financials/2020/q4/5ff22cae-c3bc-4a2b-b027-a41386c73a5e.pdf) "recreational farmers, ranchers, and all those who enjoy living the rural lifestyle." It was able to pull in big profits last quarter by catering to these farm-specific needs (“[Fly Control Strategies for Your Barn](https://www.google.com/url?q=https://www.tractorsupply.com/tsc/cms/life-out-here/the-barn/horse/fly-control-strategies-for-your-barn&sa=D&source=editors&ust=1626746922116000&usg=AOvVaw00knU6fPHAljx0DKb6XLdS),” anyone?). TSC says that this "specialized market niche" is what sets it apart from the competition. 

Tractor Supply Co. reaped record profits by becoming the Peloton of rural America

📉 Stocks go down 

__Cue: Tokyo Drift from *Fast & Furious*...__ Except, not so fast.  After a year-long pandemic postponement, the 2020 Olympics kick off this Friday in Tokyo — and they're now called the 2021 Olympics. Some key numbers:

- __0:__ Number of fans attending. All spectators have been banned, after Japan declared another state of emergency amid rising Covid cases this month. 
- __$15.4B:__ Cost of the Tokyo Olympics, according to organizers. That's 22% [higher](https://apnews.com/article/tokyo-coronavirus-pandemic-2020-tokyo-olympics-japan-olympic-games-3c46bce81928865d9aae0832b5ddd9e3) than planned due to extra pandemic-related costs.
- __$3B:__ How much Tokyo has raised from 47 domestic sponsors, a record from host nation businesses at the Games. 
- __-90%:__ How much spending tied to the Games is [expected](https://www.japantimes.co.jp/news/2021/01/23/business/economy-business/tokyo-olympics-losses-cancel/) to drop with zero spectators — and that *doesn't* include spillover tourism spend (think: hotels).

__You don't have to bring home the gold...__ if it's already home. For decades, hosting the Olympics has been a source of national pride. But while the Olympics are touted as an engine of economic growth and urban revitalization, the economic benefits of hosting aren't clear. Evidence points to no real change in economic activity for host countries — but very real costs.

- __The Rio Olympics cost $13B__, paid for with tax dollars and corporate cash. After the Games, Rio had little to show for its investment (and an abandoned pool that turned [orange](https://news.sky.com/story/abandoned-rio-olympic-pool-turns-murky-orange-10761239)).
- __The LA Olympics in 1984__ marked the [first](https://www.cfr.org/backgrounder/economics-hosting-olympic-games) and [last time](https://www.sportscasting.com/the-1984-summer-olympics-marks-the-last-time-the-games-were-profitable/) the Olympics were profitable, mostly because planners avoided building new stadiums. 
- __Looking forward:__ The International Olympics Committee (IOC) is struggling to attract bidders for future Games. Poor economics for host countries and cities have caused many potential bids to be shot down by voters. 


Tokyo

__The Olympic economy is an unequal ecosystem...__ While Japan would've taken an even *bigger* financial hit by cancelling, it still stands to lose the most. The Japanese hospitality and transportation sector is expected to lose up to $1.4B. Meanwhile, the IOC is poised to make $4B in television rights income, despite zero attendees. Companies with broadcast rights will be fine, too: __[NBCUniversal](https://robinhood.com/stocks/CMCSA)__ has already beat the $1.2B it earned for Rio ads. But sponsors like __Asahi__ will get less bang for their buck without the ability to get stadiums of spectators chugging the “Tokyo 2020 Official Beer.”


The Olympic Economy: we're weighing the benefits of hosting vs. the massive costs

__Check the succulent receipts...__ Consumer prices [jumped](https://snacks.robinhood.com/newsletters/6MmYKB2qyTGOmgSv4zyTxs/articles/40UsGpKF29ntRtuFwc6KwT/) 5.4% in June from last year, accelerating at the fastest pace since 2008. A few examples: car and truck rental prices (+88%), women's dresses (+16%), and indoor plants (+5%). Fed Chairman Jerome Powell expects this inflation could be a one-time price increase as the economy rebounds. But for lower-income consumers, a spike in the price of meat, milk, or clothes can make a big difference.

__The "secret" stimulus...__ A super-charged child tax credit. Last week, the US government started [sending](https://snacks.robinhood.com/newsletters/4UfptC7RMAEOo0YSfMmIZm/articles/9MKQo3q2RW7laXpPvRaf6/) parents monthly checks for each child they have. Each month for the rest of 2021, eligible parents can expect $250 or $300 per kid, depending on their age. 39M households will receive payments, covering 88% of US children. Pandemic stimulus checks boosted spending at go-to chains like __[Walmart](https://robinhood.com/stocks/WMT)__, __[Costco](https://robinhood.com/stocks/COST)__, __[TJ Maxx](https://robinhood.com/stocks/TJX)__ and __[Target](https://robinhood.com/stocks/TGT)__. This monthly child "allowance" could provide a similar boost to family-favorite retailers.


Zoom Out

Stories we're watching...

__Shoot your shot...__ __[Johnson & Johnson](https://robinhood.com/stocks/JNJ)__ reports earnings on Wednesday, but don't expect a major boost from vax sales: unlike __[Moderna](https://robinhood.com/stocks/MRNA)__ and __[Pfizer](https://robinhood.com/stocks/PFE)__, J&J pledged to sell its vaccine "at cost" (read: no profit). Out of $22B+ in sales last quarter, Covid vaccines [made up](https://qz.com/1999082/jj-sold-100-million-worth-of-covid-19-vaccine-shots/) just $100M of J&J's revenue — or roughly 2%. The no-profit approach could help J&J from a PR perspective. *Not* helpful: last week J&J recalled several Neutrogena and Aveeno spray sunscreens over a possible cancer risk, and it's dealing with [lawsuits](https://www.businessinsider.com/baby-powder-cancer-lawsuits-johnson-johnson-j-j-asbestos-sec-2021-2) from its baby powder scandal. 

__Ghosted like a Fleet...__ __[Twitter](https://robinhood.com/stocks/TWTR)__ and __[Snap](https://robinhood.com/stocks/SNAP)__ kick off social media earnings on Thursday. In February, Snap got investors excited by [saying](https://snacks.robinhood.com/newsletters/6ayK3gl1rqepiw8vkFk0FE/articles/1w3MRpNTnNQjpGR8ALRL7z/) it expects 50% annual sales growth for the next several years. Meanwhile, Twitter's yearly sales growth [pales](https://snacks.robinhood.com/newsletters/7Diuno0ArouMGsyNQkshkC/articles/73dVpRGQ9Foe8OjLlbQg6e/) in comparison to Snap and __[Facebook](https://robinhood.com/stocks/FB)__'s. It's been struggling to gain users, and it just killed its Stories feature "Fleets." More broadly, social media platforms continue to face criticism from regulators and customers for failing to police hate speech and misinformation. TBD if that'll hurt the bottom line.

Events

Coming up this week...

- __[Cashed](https://snacks.robinhood.com/newsletters/2Dx6BpeCelL6ERgFEQBzuf/articles/7FGQ9LWK0pYQ0cJrD5MQd9/):__ Big Banks like __[Chase](https://robinhood.com/stocks/JPM)__, __[Goldman](https://robinhood.com/stocks/GS)__, and __[Citi](https://robinhood.com/stocks/C)__ brought home booming profits last quarter — but their win is really about the economy. 
- __[Loose](https://snacks.robinhood.com/newsletters/YT38JsvnXohOf0FUMOuuu/articles/1QYBI5AuCj6KdCiF9yAt9a/):__ __[Levi's](https://robinhood.com/stocks/LEVI)__ sales more than doubled from last year, as the jean icon thrives on baggier fits and changed waistlines (RIP skinny jeans). 
- __[Juicy](https://snacks.robinhood.com/newsletters/4UfptC7RMAEOo0YSfMmIZm/articles/2F1XpjHeLwrURVe31KHxXi/):__ Korean conglomerate __LG__ is investing $5.2B in its battery biz, but it's juicing up for more than just electric cars. 

ICYMI

Last week's highlights...

_When couch fans are the only fans [amriphoto/E+ via GettyImages]_

 🏃‍♀️  The Olympic economy 

__Take it to the bank...__ Big Banks came through with expectation-beating earnings and booming profits. While the economy roared back to life last quarter, banks were busy making loans, collecting interest, and closing deals. That flurry of activity translated into big profits: 

- __[Goldman Sachs](https://robinhood.com/stocks/GS)__ made a profit of [$5.5B](https://www.cnn.com/2021/07/13/investing/goldman-sachs-earnings/index.html), compared to $373M in the same quarter last year. 
- __[JPMorgan Chase](https://robinhood.com/stocks/JPM)__ saw its profits more than double from last year to $12B. 
- __[Citi](https://robinhood.com/stocks/C)__'s quarterly profit more than *5X'd* to $6.2B. 

__Bankers dropping bangers...__ Your quarterly reminder that Goldman's CEO is an [EDM DJ](https://nypost.com/2020/07/27/david-solomon-djs-in-the-hamptons-after-reaching-3-9b-1mbd-settlement/). Last year, banks added billions in rainy day funds to their reserves. 17M Americans were newly unemployed, so banks set aside $$$ to prep for loan losses. Think: defaults on mortgages, credit cards, and biz loans. But economic healing happened faster than expected, so banks *released* those loan loss emergency funds. 

- __That translated into profit.__ Chase got a [$2.3B](https://www.cnbc.com/2021/07/13/jpm-earnings-2q-2021-.html) boost to its bottom line by releasing $3B in reserves. Citi got a [$1.1B](https://www.cnbc.com/2021/07/14/citigroup-earnings-2q-2021.html) boost from reserves. 
- __Record i-banking activity helped, too.__ Most of Goldman's growth was driven by its investment banking biz, which had its [best](https://www.cnn.com/2021/07/13/investing/goldman-sachs-earnings/index.html) second quarter ever. 


_Mood: Loan loss reserves, unleashed [Westend61 via GettyImages]_

__A growing economy is a silver bullet for banks...__ and other cyclical stocks – aka: shares of companies that are closely tied to the health of the economy. Last year, banks were diving into fallout shelters, prepping for worst-case scenario bankruptcies and defaults. This year, banks are undoing that emergency prep. A key reason: the US economy is expected to grow at the fastest pace since the '80s this year. More money in American pockets means more $$$ in the coffers of US banks. 


Banks profited thanks to reserves, but their win is really about the economy

__iCal it so I know it's real…__ Your backlog of doc appointments. As patients across the US rekindled their relationships with their doctors, __[UnitedHealth](https://robinhood.com/stocks/UNH)__'s quarterly revenue jumped 13% from last year. But profits at America's largest health insurer took a post-pandemic hit.

- __Cancel the checkup:__ As people avoided waiting rooms and germy hotspots last year, UnitedHealth [had](https://snacks.robinhood.com/newsletters/695acOxqA9l0V9Q9Xp38oj/articles/6TuKPDyMpL7gPV2Z8tHuP7/) its most profitable quarter *ever*. You didn't use the insurance benefits you pay for monthly — so your canceled visit went straight into United's pocket
- __Fit me in ASAP:__ Now that people are getting their weird bumps checked out, UnitedHealth has to foot the bill. Profit plunged last quarter thanks to all those expensive doc dates. 

__Re-United…__ and it feels so "meh." Most industries are thrilled to see customers return — that’s not necessarily the case for health insurers. Insurers encourage preventive visits, which help avoid expensive – and dangerous – problems like heart disease or cancer. But they might prefer *not* to see customers go in for non-urgent visits like check-ups, and even pay big bucks to keep them away. That's why...

- __Telehealth:__ UnitedHealth expanded its telehealth offerings, which are cheaper than IRL appts, to all 50 states during the pandemic. Competing insurers __[Oscar](https://robinhood.com/stocks/OSCR)__, __[Amazon Care](https://robinhood.com/stocks/AMZN)__, and __Kaiser Permanente__ also expanded virtual-first care plans this year. 
- __Wearables:__ UnitedHealth also offers customers free Apple Watches or Fitbits… *if* they get their steps in. 


__Sometimes, *not* spending is good business…__ and can help boost the bottom line. The health insurance biz has a classic “do less” model: Just like Olive Garden doesn’t *really* want you to spend that gift certificate, health insurers often make less money the *more* their customers use their services. Ditto for car insurance companies. 

UnitedHealth sees more revenue, but less profit… and it doesn’t really want to see you

Bitcoin 

🏦 The Big Bank theory 

__Crank out the piggy bank...__ If you're still signing field trip forms, a $300 check could be on its way. Today, the US government starts sending US parents $300 per month for each child they have (your 25-year-old who lives at home doesn't count). This temporary increase in the child tax credit was passed as part of Biden’s $1.9T stimulus rescue package in March. 

- __39M households__ will receive payments, covering *88%* of US children. Each month for the rest of 2021, eligible parents can expect $250 or $300 per kid, depending on age.
- __$105B:__ How much the boost will cost Uncle Sam. Last year, the credit was $2K/child per year. Now it could be up to $3.6K each year. Buut: it expires in December.
- __$150K:__ The full credit starts getting smaller for married couples who earn more than $150K/year, and individuals who make more than $75K.

__Give the kid some credit...__ Since 1997, the child tax credit has reduced income liability for people with children. With the *old* child tax credit, parents saved on taxes owed when they went to file. With this *new* credit, parents are straight-up getting paid, even if they have no income. It's less like a tax break, more like a monthly allowance. 

- __Dems tout the payments as a way to reduce child poverty__ and change lump-sum refunds into a reliable income stream. And Biden hopes to extend it for years. 


Piggy

__Prepare for the "secret stimulus"...__ that could [benefit](https://www.cnbc.com/2021/07/12/child-tax-credit-payments-may-boost-retail-sales-as-soon-as-this-month.html) big retailers. Pandemic stimulus checks boosted consumer spending, helping out go-to chains like __Walmart__, __Costco__, and __Target__. This monthly "credit" could have a similar effect on the family-favorite retailers. Target and __Dollar General__ mentioned the sales-boosting potential in their earnings calls, and Walmart, __American Eagle__, and __TJ Maxx__ are prepping for strong back-to-school sales.  And it's not just binders and diapers — that spending could [spill into](https://www.cnbc.com/2021/07/12/child-tax-credit-payments-may-boost-retail-sales-as-soon-as-this-month.html) adult categories like alcohol, restaurants, and travel. 


$300 monthly checks to parents start today, but the real winners could be retailers

__From toothpaste to smartphones…__ Korean conglomerate __LG__ makes just about everything. It also owns one of the world’s largest manufacturers of car batteries: LG Energy. LG Chem, its parent company,  brought in $27.1B in revenue last year, and has sealed car battery deals with __GM__, __Tesla__, and __Volkswagen__. Now, it's [juicing up](https://techcrunch.com/2021/07/14/lg-chem-will-invest-5-2b-in-battery-materials-through-2025/) with a $5.2B investment in its battery materials biz. 

__Not just Tesla juice…__ Thanks to government subsidies and clean energy concerns, demand for EV batteries is soaring. But battery behemoths like LG have their eyes set on more than just EVs. They want to service the entire renewable energy industry by fixing its storage problem.

- __The Problem:__ "Intermittency." That's when solar panels stop generating electricity on cloudy days, or wind turbines slow down in less-gusty weather. 
- __The Solution:__ Gigantic, factory-sized batteries that save up energy to use on a (literal) rainy day. LG has already installed utility-scale batteries across the US, including at the world’s largest battery storage complex in CA. 


Juicy

__Big batteries = big potential…__ EV batteries are top of mind for consumers, but utility-scale batteries are a massive opportunity for renewable energy infrastructure. They solve the "intermittency problem" for companies and governments that are setting ambitious carbon-reduction goals. Bigger batteries could also mean bigger business: the global market for energy storage is expected to hit $426B in the next decade.

 LG invests $5.2B in batteries, but it's juicing up for more than just electric cars 

_Back-to-school is about to be lit [Lorado/E+ via GettyImages]_

💰 The secret stimulus

__Bringing home the bacon...__ correction: *the 8% more expensive bacon*. Consumer prices jumped 5.4% in June from last year, continuing to accelerate at the fastest pace since 2008. As the US economy gets more #flated, the BLS' monthly Consumer Price Index has been getting attention. The [CPI](https://www.bls.gov/news.release/pdf/cpi.pdf) measures prices of 80K common items — sounds like a snooze fest, *reads like a thriller*. A few gems from prices compared to a year ago:

- __Women’s dresses__ were 16% pricier. Men's pants and shorts: +11%
- __Indoor plants and flowers__ were up a succulent 5% 
- __Hotel__ prices jumped 17%. Car and truck rentals: *+88%*
- __Candy and gum:__ +3%. Liquor at restaurants: a hard +5%
- __Pet services:__ +5%. Your dog walker isn't complaining. 

__Get meta with it...__ Many economists believe that inflation fears are, in themselves, inflated. Fed Chairman Jerome Powell expects this inflation could be a one-time price increase as the economy rebounds (#tempflation). Supply chain and labor shortages have been driving up prices of raw materials and goods. A few examples:

- __Cars:__ The global chip shortage caused a spike in used car and truck prices (+45%), which are responsible for a whopping one-third of the overall CPI increase.
- __Flights:__ Airlines are [dealing](https://snacks.robinhood.com/newsletters/2ai2OqBmW4LfHN2ln2qdFL/articles/uqadxY2cnV2UQ4gAbFQ0A/) with a shortage of pilots and workers while demand is rebounding, leading to pricier flights (+25%).  


Flated

__There are two sides to inflation...__ The side that pays extra, and the side who gets *paid* extra. Lower-income consumers are more sensitive to rising prices — a spike in the price of meat, milk, or clothing can make a big difference. But some are seeing an upside too: rising wages. From Uber to McDonald's, companies are raising wages and incentives to fill the labor shortage — which, in turn, can contribute to rising prices. Another inflationary upside: soaring home and car prices — for those who own them. Homeowners got $2T richer during the first three months of this year as values spiked.

Inflation on the rise: higher prices are weighing on wallets — but making some bigger

__Grills just want to have funds...__ Grill-maker __Weber__ is taking its charbroiled stock public, and could seek a $6B valuation in an IPO. Weber's 70-year grilling history began with George Stephen Snr, the man who invented modern grills — and added a lid (key). By the time the 60s rolled around, if you didn't have a Weber grill at your backyard party, you didn't have a backyard party. Now, Weber is sounding less *Happy Days*, more *Silicon Valley*:

- __44:__ The number of times Weber used the word "disrupt" in its IPO filing. 
- __12:__ Mentions of "installed base" — 30M grills in the US, and 50M globally. 
- __iGrill3:__ Weber's app-connected grill dongle tells you when the patty is crispy.  

__And a little bit of chicken grilled...__ BBQ'ing may be the epitome of American summer, but it's also a hallmark of pandemic socializing. The "outdoor revolution" has [benefited](https://snacks.robinhood.com/newsletters/7HtER4ksmLcN4p38u13Ss9/articles/58znHWdR9HlhGlFh3iDeTX/) everyone from RV companies like __[Winnebago](https://robinhood.com/stocks/WGO)__ and __[Thor](https://robinhood.com/stocks/THO)__, to outdoor gear companies like __[Yeti](https://robinhood.com/stocks/YETI)__ and __[Canada Goose](https://robinhood.com/stocks/GOOS)__. Now, it's helping Weber and BBQ rivals like __Traeger__, which also filed to go public last week. 

- __$1B in revenue:__ For the six months ended in March, Weber's sales were up 62% compared to the same period last year. 
- __24% market share:__ One in four grills on Earth are Weber's, and it holds the top spot for American brands. 


__Brand can be more important than product...__ Weber isn’t selling grills – it’s selling its brand name. For Weber, brand recognition is more important than grill innovation (even bluetooth dongles). Weber's biggest strength is that 87% of Americans are aware of its brand — but that's also its #1 *risk* : *“Our business depends on maintaining and strengthening our brand.”* That's why it's jacking up marketing spend and [hosting](https://webergrillrestaurant.com/special-events-grilling-classes/) events like grill classes and patio parties. 


The BBQ IPO: Weber files to take its famous grills public, but it's more about brand

_Check the succulent receipts [staticnak1983/E+ via GettyImages]_

💰 Inflation intensifies (feat. succulents)

__RIP skinny jeans...__ When you realize that skinny jeans are no longer in fashion — a year too late. __[Levi](https://robinhood.com/stocks/LEVI)__ sales plunged last year as we forgot what waistbands feel like (#legging-life). Last quarter, the company that invented blue jeans made a big comeback. 

- __Earnings, unzipped:__ Levi's sales more than  doubled from last year, and it swung to a $65M profit as you traded in yoga pants for "going out" fits. 
- __Bring out the party pants:__ Levi's stock is up 46% this year as reopening drives "revenge spending" on *non*-stretchy clothing. 

__Mom jeans FTW...__ While the days of 24/7 sweats are behind us, consumers are now seeking sweatpansy qualities in going-out clothes. Call it a pandemic hangover: the quest for comfort has carried over to jeans. Levi's CEO said that baggier fits made up nearly half of both men’s and women’s sales last quarter, a major shift from two years ago. Case in point: "[balloon pants](https://www.levi.com/US/en_US/apparel/clothing/bottoms/balloon-leg-womens-jeans/p/853140002)" are sold out. 

- __Trends change:__ Gen Z revived high-waisted, loose fits, which have become uniforms on TikTok. Now, __Madewell__ is even releasing gateway styles to help hardcore skinnyjeaners transition, calling them: "training wheels for people coming out of skinny.”
- __Waistlines change:__  One in three US consumers have seen a change in their waistlines since the pandemic, according to Levi's CEO. And nearly 40% of people say they no longer fit in their clothes from last year. That calls for a wardrobe change.  


Jeanius

__The real opportunity isn't the trend...__ it's the *spillover trend*. The skinny jean era has passed, and we've [entered](https://www.nytimes.com/2021/04/15/business/denim-cycle-loose-jeans.html) a "New Denim Cycle." But the big opportunity isn't changing waistlines or styles — it's the spillover potential of those trends. First you change the cut of your jeans — then you change your tops, jackets, and shoes to match (boots don't pair well with a tapered ankle). The data confirms it: Nine in 10 shoppers [plan](https://www.marketwatch.com/story/levi-strauss-gets-a-boost-from-changing-waistlines-during-the-pandemic-11625848347?mod=mw_latestnews) to revamp their wardrobes. Apparel retailers could benefit.

Levi’s big stretch: the jean icon is thriving on baggier fits and changed waistlines

__Subway, refresh...__ Doesn't sound right. This week, __Subway__ launched an “Eat Fresh Refresh” campaign to win customers back from fast-casual competitors like __[Chipotle](https://robinhood.com/stocks/CMG)__. Subway once set the sandwich bar high by pioneering a healthy, customizable sammie menu. But sales have been slipping for years as consumer tastes shift. Enter, Refresh:

- __20+ new ingredients,__ including new breads, smashed avocado, and fresh mozzarella
- __1M free sandwiches__ across the country, to whet customers’ appetites
- __A fresh online ordering system__ with revamped in-app ordering and nationwide Doordash delivery

__Biz strategies get stale, too…__ Subway's “healthy” fast food was out-innovated by competitors like Chipotle, that offered premium ingredients and convenient ordering *in addition* to customizable, "fresh" meals. The pandemic hit Subway hard, since it had few delivery and drive-through options for contactless orders. Meanwhile, competitors saw digital orders more than double over 2020. Subway has also struggled with:

- __Good fat > Low fat:__ Changing consumer preferences caused low-fat options like the Oven Roasted Chicken sammie to lose ground to low-carb and organic alternatives.
- __PR disasters:__ Including fake tuna (#funa) allegations and the sentencing of Subway spokesman Jared Fogle to 15 years in prison.


__Innovation is always in season…__ and even huge, global chains like Subway lose business when they don’t pay attention to changing tastes. Subway relied on its early “Eat Fresh” success for years, even as its reputational lettuce wilted. Now, Subway is trying to win customers back with e-orders and avocados (good fat). But its competitors have already taken a big bite out of the fast-casual market.

Subway unveils a fresh strategy after sales fall short of the full foot-long 

_Saying a final goodbye to the skinny jeans [Simon Winnall/The Image Bank via GettyImages]_

👖 Levi's loose quarter

__Comet me, bro...__ The Space Battle of the Billionaires has moved from the [Twitter](https://twitter.com/blueorigin/status/1413521627116032001) sphere to the thermosphere. Yesterday, __[Virgin Galactic](https://robinhood.com/stocks/SPCE)__ founder Richard Branson [boarded](https://www.cnbc.com/2021/07/11/richard-branson-reaches-space-on-virgin-galactic-flight.html) Virgin's VSS Unity, traveling faster than three times the speed of sound to reach the edge of space. Branson just became the first billionaire founder of a space company to go to space on his own spacecraft (meta). Next up is Jeff Bezos, who announced his own trip *before* Branson decided to out-space him. The former Amazon CEO plans to take off on a __Blue Origin__ spaceplane on July 20, along with his brother and a mystery bidder who's dropping [$28M](https://www.npr.org/2021/06/12/1005908618/jeff-bezos-blue-origin-space-auction-winner-28-million) to join them  — or $2.5M per minute of ride time. 

__Spaghetti Apollo-gnese...__ Apart from fueling billionaires' egos, these trips are major endorsements for NASA-sponsored space tourism (think: restaurant bookings on the ISS). NASA is leaning on private companies to help commercialize space. In May last year, Elon's __SpaceX__ became the first private company to send humans to space. In May, Virgin completed its first human spaceflight, a critical step before it flies space tourists — ETA: early 2022. While $250K tickets to space make headlines, tourism is still a tiny sliver of the space industry.

- __Satellites:__ One of the largest space industry subsectors, providing everything from WiFi, to telecom, to GPS and weather sensing. SpaceX's Starlink project has already [launched](https://www.cnbc.com/2021/02/09/spacexs-starlink-accepting-99-preorders-as-musk-considers-ipo.html) 1K+ high-speed internet satellites into low earth orbit — and is accepting $99 preorders. 
- __Defense:__ The real-life Space Force. For fiscal year 2022, the Pentagon requested $21B to invest in outer space security. Defense giants  __[Lockheed Martin](https://robinhood.com/stocks/LMT)__ and __[Boeing](https://robinhood.com/stocks/BA)__ both have space divisions. 
- __NASA missions:__ Boeing is [developing](https://www.ndtahq.com/how-a-public-private-partnership-is-expanding-americas-capabilities/) a spacecraft for NASA flights, and Elon's SpaceX won a $2.9B contract to develop a NASA lunar lander, beating out Bezos' Blue Origin (RIP Prime Moon delivery).

_Spotted, UFB: Unidentified Flying Billionaire [Marc Ward/Stocktrek Images via GettyImages]_

Launch

__This isn't sci-fi...__ The space industry is taking off in a real way. Space startups raised $7B in 2020, double what they raised in 2018. Today "space customers" mainly consist of governments and companies paying to launch satellites, cargo, and astronauts into space. In the not-so-distant future, they could be commercial space tourists. In the more distant future, they could be space colonizers on the Moon and even Mars ([see](https://www.cnbc.com/2021/04/23/elon-musk-aiming-for-mars-so-humanity-is-not-a-single-planet-species.html): Elon's Martian vision). 

Inside the Space Race: Branson, Bezos, and the future of the space industry 

__Waiting for the drink trolley like...__ __[Delta](https://robinhood.com/stocks/DAL)__ is rolling up with earnings for the quarter ended in June. Compared to 2020's tomato juice numbers, 2021 might look like champagne: TSA traveler volumes are back to [85%](https://finance.yahoo.com/news/delta-air-lines-dal-expected-190007635.html) of pre-pandemic levels, and Delta's expected to report a sales increase from last year (no shocker there). Domestic recreational travel is rebounding — Fourth of July flyers even *surpassed* 2019 levels. But international and business travel, which brings in [75%](https://snacks.robinhood.com/newsletters/5gmxJQUqpvzHWE4CeHvylQ/articles/48Z9me8i4MIZs8HeJ2o573/) of airline profits, remains grounded. Bill Gates said that half of biz travel may *never* return. 

__Get DJ D-Sol in here...__ Goldman Sachs' DJ-ing CEO David Solomon (aka: the banker who [drops](https://www.cbsnews.com/news/hamptons-chainsmokers-party-dj-david-solomon-goldman-sachs-investigation/) bangers) is dropping earnings instead. It's Big Banks earnings week, with __[Chase](https://robinhood.com/stocks/CCF),__ __[Citi](https://robinhood.com/stocks/C)__, __[Goldman](https://robinhood.com/stocks/GS)__, and others unveiling their numbers. In April, Chase and Goldman [revealed](https://snacks.robinhood.com/newsletters/2BaDoIcdXsja53tyH93ccQ/articles/5K9cPXQOlSNtntgG0U2X40/) record quarterly profits thanks to the IPO-palooza. Corporate and investment banking made up nearly half of Chase's revenue that quarter, and most of Goldman's. Despite a record first half for M&A activity, analysts [expect](https://www.bloomberg.com/news/articles/2021-07-09/banks-in-u-s-poised-for-weaker-results-after-pandemic-windfall?sref=q3KSFp38) that trading and loan revenue has slowed from last year. 

__Big week for stablecoins...__  Stablecoin = a type of cryptocurrency whose value is tied to an asset like the dollar or gold. USD Coin, one of Earth's largest dollar-pegged stablecoins, made headlines last week.  __[Visa](https://robinhood.com/stocks/V)__ [said](https://markets.businessinsider.com/currencies/news/cryptocurreny-payments-visa-partnership-clients-spend-convert-digital-currencies-2021-7) it'll allow cardholders to pay with USD Coin at 70M merchants worldwide. Merchants will get paid in fiat (aka: regular) currency. Meanwhile, __Circle__ — the firm that operates USD Coin — is [going public](https://markets.businessinsider.com/news/stocks/circle-usdc-stablecoin-public-spac-valuation-cryptocurrency-concord-stock-price-2021-7) via SPAC at a  $4.5B valuation. While crypto mainstream-ification is advancing, regulator [scrutiny](https://www.wsj.com/articles/bitcoin-draws-more-scrutiny-from-regulators-worried-about-fraud-11625576400?mod=politics_lead_pos3) of the crypto market is also heating up. 

__Feeling the pushback...__ Big business in the US. On Friday, President Biden [signed](https://www.wsj.com/articles/biden-to-target-railroads-ocean-shipping-in-executive-order-11625736601?mod=business_lead_pos3) an exec order to curb the dominance of companies in industries including shipping, agriculture, healthcare, and tech. The goal: promote competitive markets and limit corporate dominance in everything from railroads to prescription drugs. It's part of a broader effort to confront consolidation and perceived anti-competitive pricing in big industries — and it has big companies on edge.


- __[Antitrusted](https://snacks.robinhood.com/newsletters/4XhXFxZ9Jc6bcL9aMggLSr/articles/5DhQrRVBBPnLyHqLLoYa2c/):__ __BMW__ and __Volkswagen__ were fined $1B for colluding to *avoid* building greener car tech. 
- __[Blocked](https://snacks.robinhood.com/newsletters/3X5QOUOPZP7r08Bn09G0wM/articles/1bh7VsNPhZAUrYlZdft4vv/):__ __Didi__'s mega IPO party gets cut short, as China blocks app downloads and signups for the ride-hail giant. 
- __[Fitted](https://snacks.robinhood.com/newsletters/3X5QOUOPZP7r08Bn09G0wM/articles/2r41d7ctRv7gEv407QapzX/):__ __Torrid__'s hot IPO: how the plus-size retailer is tapping into a major, underserved market. 
