__Can't stop, won't stop...__ Big Tech companies are giving off [manatee meme](https://www.youtube.com/watch?v=CLGJ-LVCQrM) vibes. Lockdowns may be behind us, but Big Tech's growth streak is hotter than ever. Despite reopenings, some online pandemic habits seem to have *intensified*. Here we go again with the quarterly records:

- __[Microsoft](https://robinhood.com/stocks/MSFT)__ posted its most profitable quarter *ever*, with cloud services leading the way to record sales. 
- __[Google](https://robinhood.com/stocks/GOOG)__ had its fastest quarterly sales growth in more than 14 years, as Google Cloud revenue soared 54%. 
- __[Apple](https://robinhood.com/stocks/AAPL)__ posted its best third quarter in its 45-year history (#MidlifeThriving).

__Cancel the Cabo trip...__ Apple prefers the Silicon Valley marathon. In January, Apple had its [biggest](https://snacks.robinhood.com/newsletters/31odJOl6c3lLq4SuSoWt9z/articles/C5C8LDQhP2gXM5lLjxA33/) quarter ever. Then again in April, Apple [reported](https://snacks.robinhood.com/newsletters/3R4HEFEoXZ1isuemmsCm9G/articles/6UKjvYAKLypKoODOwTmCtR/) record second quarter sales as the 5G iPhone 12 fueled an upgrade cycle. The third quarter (aka: this latest one) is kind of like Apple's "Spring Break" — usually, it's the slowest of the year. These intense numbers just killed that vacay narrative:

- __+36%:__ Total sales growth from 2019. Sales for every product category jumped by double-digit percentage points. Services (think: App Store, Apple Music) got a 33% boost. 
- __+50%:__ iPhone was the fastest-growing product, making up nearly half of Apple's $81.4B in quarterly sales. That was thanks to upgraders and "switchers" — aka: Androiders who switch to the Fruit. That's a great bragging point for CEO Tim Cook, since Android is still the most-used smartphone OS in the world — by far.

_Apple pulling the Android users to its side [Jacobs Stock Photography/Digital Vision via GettyImages]_

Crispy

__Big Tech has flipped the growth curve...__ Companies' growth tends to slow as they get larger and older. The smaller something is, the more it has room to grow (think: toddler vs. NBA player). For companies, it's often easier to double sales from $5M to $10M than from $50B to $100B. But after massive growth in 2020, tech giants are somehow still growing *faster* in 2021. 

Apple has its best third quarter ever (feat. iPhone "switchers"), as Big Tech flips the growth narrative

__Double-take on the headline...__ __[Philip Morris International](https://robinhood.com/stocks/PM)__ is the smoke giant behind 130+ cigarette brands, including Marlboro, Parliament, and your great aunt's Chesterfield's. This week, PMI [said](https://www.dailymail.co.uk/news/article-9822189/Tobacco-giant-Philip-Morris-stop-selling-cigarettes-Britain-ten-years.html) it plans to stop selling cigarettes in the UK within the next 10 years. In fact, CEO Jacek Olczak said he wants to allow the company to leave smoking behind altogether. *Huh?*

__Blowing smoke?...__ If you think the headline is surprising, just look up PMI's website: it says "Delivering a Smoke-Free Future" all over. What it's *really* selling when it says smoke-free: heated tobacco products and vapes.  Smoking kills more than 8M people per year, but PMI is pushing these products as "less harmful" alternatives for smokers. While cigarettes still make up the bulk of PMI's biz, "smoke-free" products accounted for 28% of its sales last quarter:

- __IQOS:__ These heated tobacco units are a rare sight in the US, but they're more popular in Europe and Asia. You stick a cigarette into a device, but instead of burning it, IQOS heats the tobacco at a lower temp which releases lower levels of harmful chemicals.
- __Vapes:__ Juul-style. Last year, PMI [launched](https://www.pmi.com/smoke-free-products/veev-innovating-e-vapor-technology) an e-cig version of the IQOS in select markets. These work by heating nicotine-laden vape juices instead of cigarettes. 

__To roll it up...__ While cigarette use has been declining, PMI's sales actually *grew* 6% last quarter. That was thanks to IQOS, which now has an estimated 19M+ users. Regardless of the "smoke-free" narrative, heated tobacco units still require PMI’s pseudo-cigarettes, called “Heets” sticks, which boosts PMI's sales.


Puff

__"Smoke-free" saved Big Tobacco...__ *for now*.  Global tobacco use has been falling for decades, with 60M fewer users since 2000. Smokers are trading tobacco-filled paper for liquid-filled metal and other puffable tech. That's why smoke giant __[Altria](https://robinhood.com/stocks/MO)__ (PMI's former parent company), bought a big stake in Juul — and why PMI has been doubling down on its IQOS biz. But while "smoke-free" products may not be as harmful as OG cigs, *non*-smokers and teens are getting hooked, too. That's already posed major regulatory [troubles](https://snacks.robinhood.com/newsletters/1BeoZk2sScdAg5tPsdxKa9/articles/3kGA0PqkX7vSCvs7cFxaPP/) for Big Tobacco. 

Philip Morris might stop selling cigarettes to go “smoke-free": what that really means

S&P 500

Dow Jones

Nasdaq

Bitcoin

🍎 Apple earnings and smokeless cigs

__Lucid dreams...__ are becoming reality. Luxury EV-maker __[Lucid](https://robinhood.com/stocks/LCID)__ hasn't delivered a car yet, but it just went public via SPAC merger, raising $4.5B in fresh funds. Lucid says its cars are "California cool" at heart, with "Silicon Valley tech" for brains (read: computers on wheels). Shares popped 11% yesterday as investors ogled over Lucid's sleek-looking EVs and battery stats. 

- __Lucid's first car,__ "Lucid Air," is on track for delivery this year. Lucid says it has already received 9K+ reservations for the EV sedan, which starts at a California cool $77K. 
- __Lucid's battery__ is expected to last 500 miles on a single charge, a market-leading electric efficiency which would beat the Tesla Model S. 

__*Don't* call it luxury...__ Lucid describes itself as a "*post*-luxury” pioneer, catering to a new generation that has evolved beyond basic luxury (must be nice). If luxury = Louis bags and Dom Pérignon bottle service, then *post*-luxury = sustainable cashmere and organic wine retreats in Croatia. Lucid's *real* business model: replicating __[Tesla](https://robinhood.com/stocks/TSLA)__'s thunder.

- __Tesla plans:__ Tesla's first [strategy](https://www.tesla.com/blog/secret-tesla-motors-master-plan-just-between-you-and-me) was entering at the high end of the market, then lowering costs as it scaled. Lucid's strategy: “High-end first product," then "progressively attainable vehicles.”  
- __Tesla vibes:__ At first glance, you'd probably think Lucid's cars were designed by Elon. Lucid even says one of its execs helped bring the Tesla Model S to market.

_"Post-luxury" vibes [LumiNola/E+ via GettyImages]_

Posted

__Newcomers have an easier road...__ It took Tesla nearly two decades to gain Wall Street respect. From 2017 to 2019, Tesla was on the [brink](https://www.cnbc.com/2020/11/03/musk-tesla-was-about-a-month-from-bankruptcy-during-model-3-ramp.html) of bankruptcy as it tried scaling production of its Model 3. Fast-forward to 2021: Tesla just reported a $1.1B profit and a record 201K deliveries last quarter — *99% of those deliveries consisted of its more affordable Model 3 or Y*. Lucid hasn't even delivered a car, but it just became the fourth-most valuable EV stock with a $42B valuation. That's because Tesla proved that "start premium, scale down" can work with EVs. 

"Post-luxury" EV maker Lucid just went public – and it wants to steal Tesla's thunder 

__GI Joe goes to Hollywood...__ __[Hasbro](https://robinhood.com/stocks/HAS)__, the toy icon that makes Monopoly, Jenga, and My Little Pony, is making more than just Monopoly money. Hasbro's sales jumped an expectation-crushing 54% last quarter, and the stock soared 12% yesterday. 

- __Classics never get old:__ Sales of toys like Nerf guns and Play-Doh jumped 33%.
- __Card games go digital:__ Popular online games like Dungeons and Dragons helped Hasbro more than double its digital gaming revenue.
- __Toys learn new tricks:__ Hasbro’s entertainment division, which makes kids TV hits like “Peppa Pig,” upped its revenue by 47%.

__Toys are movie stars now…__  Hasbro wants to become an entertainment company so that it can squeeze more bucks out of its toys. Hasbro partnered with Paramount to launch the toy-inspired, $5B *Transformers* movie franchise. Now it wants to give *other* toys the Transformers treatment. In 2019, Hasbro bought movie production studio eOne. Now it's developing *200* movies and TV shows, including 30 projects based on brands like Dungeons & Dragons, My Little Pony, and Clue.


Peppa

__Toy biz is becoming show biz…__ Hasbro’s doubling down on the biggest opportunity in toys:  entertainment. By spinning its best-known characters and games into shows and movies, Hasbro hopes to replicate the "flywheel" success of media giants like __[Disney](https://robinhood.com/stocks/DIS)__, whose films, TV shows, and theme parks rely on the same characters. Rival toy maker __[Mattel](https://robinhood.com/stocks/MAT)__, which drops earnings today, has a similar vision: it’s producing 13 movies based on toys like Barbie, Hot Wheels, and American Girl dolls.

Hasbro’s sales surged last quarter, but toys are only the start of the story

🚙  Lucid takes the Tesla route 

__Drama in the feed...__ This month, President Biden said social platforms like __[Meta](https://robinhood.com/stocks/META)__ are "killing people" with Covid misinformation. Facebook's response: a blog [post](https://about.fb.com/news/2021/07/support-for-covid-19-vaccines-is-high-on-facebook-and-growing/) called "Moving Past Finger Pointing." In short, Facebook says it's not its fault that Biden failed to get 70% of American adults vaccinated by July 4th. Biden walked back his comments, but said social platforms should do more to tackle misinfo. As the Delta variant spreads, Covid cases have been surging among the unvaccinated. 

- __Biden believes__ anti-vax content is a key reason some remain unvaxed. A recent study found that 95% of Covid misinfo reported across social platforms wasn't removed. 
- __Facebook says__ it has removed 18M instances of Covid misinfo, and that 85% of its US users have been, or want to be, vaccinated.

__Déjà vu vibes...__ This public spat is part of a much broader issue of content moderation on Facebook, spanning from election interference, to hate speech, to the Capitol riots. Last year, 1K+ advertisers, including big shots like Verizon, [paused](https://snacks.robinhood.com/newsletters/53ExK4qFnO6TgaRpz8Ssnl/articles/6BImPvOi9lK0nl5oMKNwcO/) spending on FB ads to protest its moderation policies. That didn't make a dent in FB's sales. Despite the criticism, FB's biz is thriving, and its stock is at a record high: 

- __For the quarter ended in March,__ FB's ad sales soared 48% from last year to $25B, and profit nearly *doubled* to $9.5B. 
- __When FB reports this Wednesday,__ analysts [expect](https://www.forbes.com/sites/jjkinahan/2021/07/23/facebook-q2-earnings-can-fb-retain-ad-revenue-growth-amid-competition-and-pressure-from-apple/) $28B in quarterly sales, or 60% growth from last year — even faster than the previous quarter.


_How tech giants drop earnings [Donald Iain Smith/Photodisc via GettyImages]_

Zucked

__FB's biggest threats are *external*...__ For now, Facebook's 3.5B monthly users across FB, Insta, and WhatsApp mean advertisers are hooked. Misinformation doesn't seem to be hurting its biz — but intensifying antitrust scrutiny and competition from Gen Z-loved apps *could*. Last year, FB [lost](https://www.fastcompany.com/90598536/facebooks-daily-active-users-decline-for-a-second-quarter-in-the-united-states-and-canada) users in North America as __TikTok__ blew up. Meanwhile, Biden has tapped Big Tech critics to lead on antitrust regulation. Potential breakups or blocked acquisitions could become existential threats. 


Facebook's Biden drama: misinformation has hurt the social giant's rep — but not its biz

__Big Tech earnings...__ drop together. __[Apple](https://robinhood.com/stocks/AAPL)__, __[Microsoft](https://robinhood.com/stocks/MSFT)__, __[Amazon](https://robinhood.com/stocks/AMZN)__, __[Google](https://robinhood.com/stocks/GOOG)__, and __[Meta](https://robinhood.com/stocks/META)__ report quarterly numbers this week. Last quarter, the "Big Tech 5" [demolished](https://snacks.robinhood.com/newsletters/4yfojyZE9WLvdIySo7B6GF/articles/5HHwtkiQ6PZUclm1Kohn61/) earnings. Amazon and Apple had their best first quarters *ever*, Google's profit more than doubled, and Microsoft posted its strongest growth since 2018. The Nasdaq index, which is dominated by the Big Tech 5, is up 17% this year. Despite reopenings, some online pandemic habits seem to have stuck, and even intensified. But tougher antitrust regulation could spell trouble for the "Tech 5" down the line. 

__Oil or caviar?...__ You're feeling it at the pump: US gas prices are up 45% from last year. After oil prices [plunged](https://snacks.robinhood.com/newsletters/2yAve6xSRhLRA5umV930FV/articles/58PLs0oCRQ6EX1n9oXxhoN/) in March 2020, OPEC cut oil production to stop the free fall. Now, the powerhouse org of 14 oil-exporting countries has agreed to boost production, as oil prices [hit](https://www.cnbc.com/2021/07/18/opec-allies-agree-to-fully-end-oil-production-cuts-by-september-2022.html) their highest levels in more than two years. We'll see if higher prices helped  __[Shell](https://robinhood.com/stocks/RDS.A)__, __[Exxon](https://robinhood.com/stocks/XOM)__, and __[Chevron](https://robinhood.com/stocks/CVX)__ when they report earnings this week. The oil giants are also facing [pressure](https://snacks.robinhood.com/newsletters/eQVhHD0t1MjTu4j4q8zVZ/articles/1HiF9jeICX2hit2vVl4ZFO/) to embrace renewable energy. 


Events

Coming up this week...

__Delta rising...__ A surge in Covid cases driven by the highly-contagious Delta variant is pouring cold water on recovery optimism. Delta now accounts for an estimated [83%](https://www.businessinsider.com/delta-variant-new-covid-19-cases-cdc-director-2021-7) of all new Covid-19 cases in the US. The CDC is calling it "a pandemic of the unvaccinated," and a few big counties, including LA, have brought back indoor mask mandates. Last Monday, the Dow stock index had its [biggest](https://snacks.robinhood.com/newsletters/4P0waZFQHzr3Hio3dHHnGS/articles/1S1eUx1B7xoUhO3zNBjVNe/) one-day drop since October. Stocks have since recovered, but we could see more volatility ahead. 

__The "House Hype" is real...__ And it's not a TikTok creator mansion. The housing boom pushed the median US home price to a record high of $363K last month. Homeowners have benefited, gaining $1.5T last year as home values soared. But after more than a year of extreme home shopping, the tight housing supply is increasing, and is expected to grow through the rest of this year.

Zoom Out

Stories we're watching...

- __[Opioid](https://snacks.robinhood.com/newsletters/5OD5B5k4CydszpWz82qWgJ/articles/7uyEo6C4FjBAg2vmyeYYRg/):__ Four major drug companies that have been blamed for fueling the opioid epidemic reached a historic $26B settlement with states. 
- __[mRN-ASAP](https://snacks.robinhood.com/newsletters/4zwrsNXSMlxPs7uiI0Se1p/articles/62aBHtkrzcW18eweMOYIcH/):__ Vax-maker __[Moderna](https://robinhood.com/stocks/MRNA)__ joined the prestigious S&P 500 index, but its *real* power lies in its mRNA platform. 
- __[Juicy](https://snacks.robinhood.com/newsletters/5ei5KZ0s1RNU72D3ZPf13v/articles/4sqtsZFggOihAmXIArgMA9/):__ __[Tesla](https://robinhood.com/stocks/TSLA)__ is opening up its exclusive Supercharger networks to other EV brands — Elon just made "the pizza decision."

ICYMI

Last week's highlights...

🎭  Facebook's presidential drama

__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

💊 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.


__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.

- __[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. 

_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.

🍎 Apple earnings and smokeless cigs

🚙 Lucid takes the Tesla route

🎭 Facebook's presidential drama

💊 Historic opioid settlement

⚡️ Tesla shares the super charge

💉 Moderna joins the big leagues

📉 Stocks go down

🏃‍♀️ The Olympic economy

🏦 The Big Bank theory

💰 The secret stimulus