__Rough seas for Putin’s pals…__ First, Western governments went after Russia’s banks — now they’re [targeting](https://www.nytimes.com/2022/03/02/us/politics/russian-oligarchs-justice-department.html) its oligarchs. Refresher: oligarchs are wealthy individuals with outsized influence over government. Post-Soviet oligarchs have amassed staggering fortunes during the privatization of Russia’s economy by doing favors for politicians like President Putin. By going after oligarchs, Western countries hope to pressure Putin to end the war in Ukraine:

- __Seize and freeze:__ President Biden [launched](https://www.nytimes.com/2022/03/02/us/politics/russian-oligarchs-justice-department.html) “Task Force KleptoCapture” (real name) to confiscate Russian oligarchs’ yachts, jets, and pricey pads. European authorities have already seized some big boats, like the 280-foot Amore Vero owned by a Putin confidant.
- __Cut and run:__ Some oligarchs are [sailing](https://www.cnn.com/2022/03/02/business/russian-oligarchs-sanctions-assets/index.html) for safer harbors, but even formerly friendly destinations like Monaco have adopted sanctions. Others are trying to sell: Roman Abramovich put Chelsea FC up for [sale](https://www.nytimes.com/2022/03/02/sports/soccer/chelsea-roman-abramovich.html). FYI: He’s one of a handful of oligarchs who’ve broken rank by publicly [criticizing](https://www.cnn.com/2022/02/28/business/oligarchs-russia-ukraine-fridman-deripaska/index.html) the war.

__Yacht-onomics…__ Putin has spent years sanction-proofing Russia for this day. Moscow stockpiled currency, bought Chinese bonds, and ditched Western trade partners to [fortify](https://www.nytimes.com/2022/02/03/world/europe/putin-sanctions-proofing.html) Russia’s economy. Oligarchs did their part: experts say Putin and his cronies have personally [stashed](https://qz.com/2136067/where-are-russias-oligarchs-hiding-their-wealth/?utm_source=email&utm_medium=daily-brief&utm_content=ade3ed45-9ade-11ec-a5d2-be11b8650b3a) at least $250B of dark money outside Russia. But their laundered loot is hidden in plain sight: $1B+ yachts and Manhattan penthouses aren’t exactly subtle.

Roman Abramovich's superyacht, Solaris, in Barcelona on Tuesday (David Ramos/Getty Images)

Klepto

__Keep your enemies' friends close…__ So far, government sanctions and international shaming haven’t stopped Putin from escalating his aggression against Ukrainians. Western leaders hope that going after his influential friends could help turn the screws. Russian oligarchs have already [lost](https://www.bloomberg.com/news/articles/2022-02-28/russian-billionaires-count-cost-of-83-billion-wealth-wipeout?sref=q3KSFp38) $83B because of sanctions — and that’s not counting the yachts. And it’s just beginning: the US is [said to be](https://www.reuters.com/world/us-preparing-expanded-sanctions-against-russian-elite-families-wapost-2022-03-02/) expanding sanctions against oligarchs and the businesses that made them rich.

To crank up pressure on Putin, Western powers target Russian oligarchs — and their superyachts

__Let this sink in…__ After two years of a pandemic, women have still not fully recovered from the labor market pain of 2020. While the US added a record [6.4M](https://www.washingtonpost.com/business/2022/01/08/2021-shattered-records-but/) jobs last year, and the overall unemployment rate is down to [4%](https://www.bls.gov/news.release/empsit.nr0.htm), men have dominated new hirings. Of the jobs gained [in January](https://www.phillyvoice.com/women-jobs-recovery-covid-19-pandemic-us-labor-department-report/#:~:text=Of%20the%20jobs%20gained%20in,had%20been%20held%20by%20women.), women filled 40%. This morning’s jobs report will offer fresh insight into how women are rebounding from the [she-cession](https://snacks.robinhood.com/newsletters/4FiPxYkU4FGEKs36P1LNJJ/articles/4kp1BqJkQIJqk2dJ3iMTuU/).

- __In the US: 2.5M+__ women dropped out of the labor force between February 2020 and January 2021, versus [1.8M](https://nwlc.org/wp-content/uploads/2021/01/December-Jobs-Day.pdf) men. That’s unusual, because men typically fare worse during recessions.
- __Globally: 64M+__ women lost their jobs in 2020, which resulted in $800B in lost income.

__Why women left…__ Women bore the brunt of childcare when schools closed, [which hurt](https://journals.sagepub.com/doi/full/10.1177/23780231211038783) their careers, relationships, and well-being. Women are also [overrepresented](https://fas.org/sgp/crs/misc/R46632.pdf) in jobs with some of the highest [burnout rates](https://www.cnbc.com/2022/02/28/black-women-were-hit-especially-hard-by-pandemic-job-losses-and-recovery-is-lagging.html), including high-contact industries like healthcare, education, and retail. Ultimately, many mothers were forced to decide between being primary caregivers or full-time employees. And while schools have reopened, there’s still a [childcare crisis](https://www.cnbc.com/2021/12/03/help-wanted-americas-childcare-crisis-fueled-by-worker-shortages-in-daycare-centers.html) keeping women out of the resurgent labor market:

- 16K licensed childcare facilities [permanently](https://www.childcareaware.org/demanding-change-repairing-our-child-care-system/) closed between December 2019 and March 2021, while childcare costs have increased by [41%](https://fortune.com/2022/01/28/the-cost-of-child-care-in-the-us-is-rising/) since the pandemic began.
- American childcare workers — [95%](https://www.npr.org/sections/coronavirus-live-updates/2020/08/19/903913689/1-in-5-child-care-jobs-were-lost-since-pandemic-started-women-are-affected-most) of whom are women — earn just [$12/hr](https://www.bls.gov/ooh/personal-care-and-service/childcare-workers.htm) on average, which makes recruitment and retention challenging. 

__The labor market is still healing…__ especially for women. Biden’s [$1.2T](https://time.com/6089649/infrastructure-bill-industries-benefit/) infrastructure bill aims to pump money into industries like construction and transportation, but those sectors have traditionally employed few women. [Some say](https://fortune.com/2021/02/18/returnships-women-unemployment-back-to-work/) minimizing bias against workers who take career breaks for childcare could help women return to the labor pool.

The labor market is resurging — but millions of women are still recovering from the “she-cession”

To pressure Putin, Western powers target Russian oligarchs and their yachts

Dow Jones

S&P 500

Nasdaq

Bitcoin

People who are “tetrachromatic” can see 100X as many colors as the average person

🛥️ Oligarchs and yacht-onomics

__The first big crypto conflict…__ The war in Ukraine has [boosted](https://www.wsj.com/articles/bitcoin-demand-booms-in-ukraine-and-russia-11646165756) demand for crypto on both sides of the fight, helping to lift the price of __[Bitcoin](https://robinhood.com/crypto/BTC)__ nearly 25% since the start of Russia’s invasion — and thrusting decentralized finance (DeFi) into a major military conflict. How crypto is impacting the war so far:

- __Crowdfunded resistance:__ Ukraine has [raised](https://www.cnbc.com/2022/03/02/ukraine-dogecoin-other-cryptocurrencies-accepted-for-donations.html) over $35M in crypto to finance its ops. After Ukraine’s deputy PM [tweeted](https://twitter.com/FedorovMykhailo/status/1497549813205848068) a link to a digital wallet, donations poured in from around the world. Still, Ukraine’s crypto war chest is tiny compared to the $270M it’s raised from war bonds.
- __Sanction resistance:__ Russia can also use crypto to blunt the damage of sanctions, since crypto transactions are harder to block. Russia’s access to global banking is mostly frozen and its currency is nearly worthless — but it can still spend bitcoin.
- __Exchange resistance:__ Ukraine officials asked crypto exchanges to bar all Russian users from their platforms, but __[Coinbase](https://robinhood.com/stocks/COIN)__, __Kraken__, and __Binance__ refused to pull the plug. Kraken’s CEO [said](https://www.bbc.com/news/technology-60576373) a ban would contradict bitcoin’s “libertarian values.”

__A geopolitical X factor…__ Russia wouldn’t be the first country to use crypto to get around sanctions: __Iran__ and __North Korea__ have reportedly [deployed](https://www.nytimes.com/2022/02/23/business/russia-sanctions-cryptocurrency.html?partner=slack&smid=sl-share) crypto after being frozen out of global markets. Analysts are concerned Russia and China could do the same, and both countries are also rolling out state-sponsored digital currencies.

ATMs for bitcoin and banks in Istanbul [Chris McGrath/Getty Images]

DeFi

__Crypto could reshape war…__ and war could reshape crypto. Digital currencies may change how wars are fought and financed by providing a new way to move money quickly and securely. But by the same (decentralized) token, crypto’s influence in Russia’s war on Ukraine could push lawmakers to accelerate plans to crack down. US regulators plan to clarify their crypto rules sometime this year.

Crypto becomes a new tool in war as Ukraine and Russia leverage digital currencies

__Break out the Batmobile…__ If you want to catch Robert Pattinson in tights on opening night, it could cost extra. __[AMC's](https://robinhood.com/stocks/AMC)__ testing a new pricing strategy by raising the cost of tickets for popular movies, like __Warner's__ "The Batman'' (hits theaters Friday). In LA and NYC, ticket prices are running about a buck more, but that hasn’t dampened demand:

- __*Batty* expectations:__ “The Batman” could be the first blockbuster of the year: it’s tracking for a $245M+ worldwide open, and not a moment too soon for chains like AMC.

__Strategy shift...__ During the pandemic, some studios have embraced a new way to reach viewers at home (think: same-day streaming releases). That’s had mixed results: Warner's "Dune" pulled in $400M at the global box office. But the studio’s other day-and-date releases, like “[In the Heights](https://www.latimes.com/entertainment-arts/business/newsletter/2021-06-15/in-the-heights-box-office-the-wide-shot)” and “[Matrix 4,](https://www.forbes.com/sites/scottmendelson/2021/12/28/why-the-matrix-resurrections-was-a-box-office-disappointment/?sh=5fcfa7ea2562)” bombed on the big screen. With North American ticket sales still down 60% from pre-Covid levels, theater chains are getting creative:

- __Lux-ification:__ reclining seats, contactless concessions, and 4D experiences are some ways theaters are enticing people back. Pricier seats for popular showings of studio tentpoles could add to the premium feel.

- __BTW:__ AMC is already charging European theatergoers extra for [prime](https://nypost.com/2022/03/02/why-amc-is-charging-higher-prices-for-the-batman-tickets/) theater seats (think: middle, not too close).

__Movie tix are getting “premium-ized”...__ Movie tickets are famously uniform: you’ll pay the same to see a $200M Marvel blockbuster as a $2M indie flick. And dynamic pricing has long been a popular model in other industries, from flights to hotels to concerts. Whether you’re booking a last-minute red-eye or front-row seats to a J. Biebs show, high demand = higher cost. But hiking prices could jeopardize attendance — at a time when theaters are struggling to fill seats.

AMC will charge more for blockbusters as the struggling movie chain entertains “variable pricing”

Crypto becomes a new tool in war as both sides leverage digital currencies

Reported Covid cases in the US have fallen by 96% from their peak in mid-January. Globally, reported cases have dropped by 16% in the past week

🔑 The first crypto conflict

__Corporate exodus…__ A growing list of Western companies are responding to the war in Ukraine, from offering gestures of goodwill to cutting business ties with Russia. Yesterday, __[Visa](https://robinhood.com/stocks/V)__ and __[MasterCard](https://robinhood.com/stocks/MA)__ blocked Russian banks from using their payment systems, to comply with US sanctions that restrict domestic companies from doing biz with certain Russian firms. But not every retaliatory move has been about sanctions:

- __Giving shelter:__ __[Airbnb](https://robinhood.com/stocks/ABNB)__ is offering free housing for up to 100K Ukrainian refugees with the help of volunteer hosts in neighboring countries. Meanwhile, Elon Musk shipped __SpaceX__ Starlink satellites to help keep Ukraine's internet online.
- __Sending a message:__ __[Disney](https://robinhood.com/stocks/DIS)__, __[Paramount](https://robinhood.com/stocks/PARA)__, and __Warner Bros.__ agreed to immediately halt movie [releases](https://www.bbc.com/news/business-60566286#:~:text=%22Given%20the%20unprovoked%20invasion%20of,other%20humanitarian%20assistance%20to%20refugees%22.) in Russia (no “Batman” premiere this weekend in Moscow). On the tech front, __[Microsoft](https://robinhood.com/stocks/MSFT)__ pulled Kremlin-backed news outlets from its app store, while __[Google](https://robinhood.com/stocks/GOOGL)__ and __[Meta](https://robinhood.com/stocks/META)__ [blocked](https://wgntv.com/news/social-media-platforms-prevent-russian-backed-media-from-earning-ad-revenue/) Russia’s state-media outlets from monetizing on their platforms.
- __Cutting bait:__ __[BP](https://robinhood.com/stocks/BP)__ dumped a near 20% stake in its Russia-related energy biz, while __[Shell](https://robinhood.com/stocks/SHEL)__ ditched its Russian oil ventures, including its stake in the Nord Stream 2 pipeline. __[Uber’s](https://robinhood.com/stocks/UBER)__ looking to sell its remaining $800M stake in Russian ride-hailer __[Yandex](https://robinhood.com/stocks/YNDX)__, and __[Apple](https://robinhood.com/stocks/AAPL)__ has stopped selling all its products in Russia.

A man wearing a Ukrainian flag ribbon at the Mobile World Congress in Barcelona on Tuesday [AFP via Getty]

Squeeze

__Corporate resistance can take time to unfold…__ Corporate boards worldwide are calculating the risk vs. reward of doing biz in or with Russia. While many companies want to pressure Putin to stop the war, ditching operations in a major country isn’t always easy — and could also hurt share prices. That could be partly why some US companies with high exposure in Russia haven’t acted yet. A tragic consequence: some corporate actions are hurting innocent Eastern Europeans now. 

From BP to Disney, Western companies are flexing “soft power” by cutting ties with Russia

__Just *don’t* do it…__ Retailers like __[Foot Locker](https://robinhood.com/stocks/FL)__ need brands like __[Nike](https://robinhood.com/stocks/NKE)__. But brands don’t always share the love. Foot Locker shares have fallen nearly 30% since last Thursday. That’s when the sneaker retailer said it [expected](https://www.cnbc.com/2022/02/25/foot-locker-fl-reports-q4-2021-earnings.html) sales to slip this year as top vendor Nike sells fewer shoes in its stores. The sneaker giant says it won’t fully abandon Foot Locker, but will reduce inventory to ensure scarcity and sell more top kicks directly to buyers. 

- __Big shoes to fill:__ Foot Locker [expects](https://www.bloomberg.com/opinion/articles/2022-03-01/nike-should-be-the-next-luxury-fashion-house?sref=q3KSFp38) Nike sales to make up 60% of total sales this year, down from 70% last year and 75% in 2020. 
- __To make up for lost Nike $$,__ Foot Locker plans to stock more __[Adidas](https://robinhood.com/stocks/ADDYY)__, __Puma__, __New Balance__, and __[Crocs](https://robinhood.com/stocks/CROX)__.

__Kicked to the curb…__ Nike makes twice as much profit selling shoes directly as it does wholesale, so it’s not surprising that it’s focusing less on retailers. By investing in its own stores and apps, Nike has more than [doubled](https://www.retaildive.com/news/how-nike-is-using-dtc-and-data-to-expand-its-empire/596602/) its D2C sales since 2011, to 35% last year. At the same time, Nike has been unlacing retailer relationships:

- __Nike stopped selling__ its shoes on __[Amazon](https://robinhood.com/stocks/AMZN)__ in 2019 to push customers to its sites, and ended partnerships with __DSW__, __Zappos__, __[Dillard’s](https://robinhood.com/stocks/DDS)__, and __[Urban Outfitters](https://robinhood.com/stocks/URBN)__.
- __Other shoe giants__ like __[Under Armour](https://robinhood.com/stocks/UA)__ and Adidas have also ditched retailers to boost D2C sales. But __[Allbirds](https://robinhood.com/stocks/BIRD)__, a smaller shoe biz that started out D2C, is investing in wholesale to tap new customers.

Untied

__Markdowns scuff brand image…__ Nike’s D2C push is all about [control](https://www.forbes.com/sites/warrenshoulberg/2022/03/01/swoosh-why-nikes-foot-locker-exit-could-devastate-other-retailers/?sh=faeb08e6d6d9). If Nike can control its supply, it can control its brand image — and if Nike can elevate its brand image, it can sell shoes for higher prices. But Nike can pitch Jordans as luxury items only if they’re *not* available in Foot Locker’s clearance bin. As the Swoosh moves up market, it could expand past partnerships with luxe brands like __[LVMH](https://robinhood.com/stocks/LVMUY)__, whose profits are soaring despite inflation.

Nike tries to luxe-ify its brand by selling less at Foot Locker and more directly to consumer

From BP to Disney, Western companies flex “soft power” by cutting ties with Russia

In 1869, Wyoming became the first US state or territory to grant women the right to vote — a half century before the 19th Amendment was passed by Congress

💼 Russia’s corporate exodus

__Weaponized finance...__ Over the weekend, Western countries piled unprecedented financial sanctions on Russia. The goal: disrupt Russia’s ability to finance its war in Ukraine by cutting it off from critical financial resources. The fallout in Russia: plunging stocks, a crashing currency, and panic.

- __Sinking stocks:__ Russia closed its stock market yesterday and today to prevent a crash after it plummeted 30%. 
- __Sinking currency:__ The ruble lost more than [30%](https://www.cnbc.com/2022/02/28/russian-ruble-dives-nearly-30percent-against-the-dollar-amid-sanctions-ukraine-crisis.html) of its value against the US dollar, trading as low as 119 rubles per $1. 
- __Soaring interest:__ To prop up its currency, Russia's central bank (think: its Fed) more than [doubled](https://www.npr.org/2022/02/28/1083478065/russias-central-bank-doubles-a-key-interest-rate-as-sanctions-spark-economic-tur) its key interest rate, to a record 20%. 
- __Run on banks:__ Russians lined up at banks and ATMs to withdraw cash, rushing to spend or convert their savings before they lost even more value.

__Uncharted territory…__ The West’s latest sanctions have made it hard for Russia to (a) tap it into its rainy-day fund of foreign currency (think: USDs, euros) and (b) stabilize the plunging ruble. Two financial strikes explain why:

- __Strike #1:__ Western countries kicked some Russian banks out of Swift, the key global banking network for international transactions. That severely limits Russian banks’ ability to trade and convert rubles into other currencies, which is necessary to pay for imports. 
- __Strike #2:__ The US froze the Russian central bank’s access to its foreign currency held at American banks — read: a large chunk of Russia’s $640B reserves. Normally, Russia’s central bank would buy rubles to stabilize the currency from falling. Problem: it needs foreign currency to do that.

A man in Moscow passes by a display of foreign exchange rates [Anton Novoderezhkin/Getty Images]

Crisis

__“Fortress Russia” is showing cracks…__ Moscow has spent years trying to “sanction-proof” its economy by bulking up on foreign currency (among other things). But these sanctions block Russia from a big part of the global economy, and the damage is already showing. Still: the sanctions [let](https://www.wsj.com/articles/russia-sanctions-over-ukraine-largely-spare-energy-sector-vital-to-europe-11645970890) the West keep buying oil and gas from Russia — aka: Russia’s biggest source of revenue.

From plunging stocks to sinking currency, Russia’s economy is in crisis mode

__It’s not just hot air…__ Energy giants are finally investing in US offshore wind farms. Last year, wind produced a record 9% of domestic energy, but virtually all that power was generated inland on huge farms in Texas, Oklahoma, and Iowa. Now the global energy sector is looking offshore and starting to see a path to profits in those huge coastal turbines: 

- __The news:__ The rights to develop wind farms off the coast of New York and New Jersey [sold](https://www.axios.com/newsletters/axios-generate-91561e8c-a736-4433-a1f6-570b60e9f1cf.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosgenerate&stream=top) for a record $4.37B this week, to joint ventures involving companies like __[Shell](https://robinhood.com/stocks/SHEL)__ (Dutch), __[RWE](https://robinhood.com/stocks/RWEOY)__ (German), and __[National Grid](https://robinhood.com/stocks/NGG)__ (UK).
- __The goal:__ Biden wants offshore wind to power 10M homes by 2030. US wind farms are already on track to exceed that, but they’re unlikely to be operational by the deadline.

__The US has some wind in its sails…__ But still lags behind the EU and China in offshore wind production. Today the US [has](https://www.princeton.edu/news/2021/05/20/net-zero-america-action-americas-windy-coastlines-and-scaling-offshore-wind-power) just two operational offshore wind farms, with only a handful of working turbines. Europe and China are dominating, accounting for nearly all offshore wind-generating capacity. Part of the reason for the lag is red tape: the US permitting process for offshore wind projects can take *years* because it often involves several states and overlapping regulators.

Gusty

__Urgency can be a powerful tailwind...__ Every dollar the federal government commits to renewables is another reason for companies to invest in US clean energy, even in heavily regulated industries like offshore wind. Wind and solar are expected to account for the majority of new energy capacity built in the US this year — and power from these kinds of renewables are already [cheaper](https://ourworldindata.org/cheap-renewables-growth) than fossil fuels in many places. But even though wind can generate more clean power than solar, the solar industry is growing faster.

Clean energy gets a windfall after a record-breaking auction for US offshore wind farms

From plunging stocks to a sinking currency, Russia’s economy is in crisis mode

Women make up more than half the US population, but only just over a quarter of Congress

📉 Russia’s financial crisis

__Just as the pandemic was waning...__ Russia invaded a sovereign nation, launching a war that’s plunged Europe into one of its [darkest](https://newsinfo.inquirer.net/1559645/europe-in-darkest-hours-since-world-war-ii) moments since WWII. After Russia began invading neighboring Ukraine, Western leaders have been piling on harsher sanctions to punish Russian President Putin.

__The crisis is rattling the world...__ and markets. The global economy is so interconnected that turmoil in one area can shake the entire financial system. Stocks have been falling all year as investors stress over inflation and coming interest-rate hikes. The conflict is weighing on what’s already hurting markets. How different markets have been impacted:

- __Stocks:__ US stocks dropped immediately after Russia's invasion on Thursday, but rebounded for the week on expectations that the Fed could go easier on rate hikes (because: global turmoil). Few US companies have operations in Russia or Ukraine, so they’re more shielded. Meanwhile, Russian stocks have lost half their value.
- __Bonds:__ US Treasury bonds spiked as investors sold more volatile assets like stocks and moved into “safe haven” investments like gov’t debt, which the US has always repaid. 
- __Commodities:__ Oil and wheat prices soared on concerns of reduced supply from Russia — the world's largest exporter of wheat, and a top three exporter of oil and natural gas. Meanwhile, gold prices are rising as investors seek more stability.
- __Paper currency:__ The USD is appreciating as investors seek security in the world’s reserve currency, which has a stable rep, while Russia’s currency has tanked.
- __Crypto:__ Some believe __[Bitcoin](https://robinhood.com/crypto/BTC)__ can act like digital gold — a “safe haven” decentralized currency to retreat to during conflicts. But BTC is down 30% over the past three months. 

In Rome, a torchlight procession for peace in Ukraine (Pacific Press via Getty Images)

__In uncertain times, investors crave security…__ That’s why during times of political turmoil, some investors retreat into "safe haven” assets like T-bonds, gold, cash, and even "defensive stocks,” which tend to be less affected by volatility (think: utilities and consumer staples). Diversifying across investment types can help hedge risk, but doesn’t mean losses won’t occur. No one can predict what’ll happen, but historically the US market has bounced back from geopolitical conflicts over time. 

As investors worry about Russia’s war on Ukraine, we’re unpacking how geopolitical turmoil can affect different assets

__The state of the union is...__ anxious. President Biden is set to deliver his first SOTU address Tuesday, at a critical moment when his approval ratings have plunged. While he may talk about the war in Ukraine and his domestic successes (think: $1T [infrastructure](https://snacks.robinhood.com/newsletters/535eiAczcIj1qvPlNpbVcf/articles/3oxNV4QbHcdtoFaZVgY1sz/) bill, vaccination rate), inflation is what’s top of mind for many Americans. Biden will likely underscore the strong labor market — a record 6.6M jobs were added since he took office — while acknowledging that high prices are hurting wallets. FYI: We'll get an update on the employment picture with Friday’s jobs report.

__Speed bump...__ Plans to electrify US delivery fleets are stuck in first gear. Last week __USPS__ said it would buy $6B of mostly gas-guzzling mail trucks, ignoring the White House’s call for it to go electric. In the private sector, __[Amazon](https://robinhood.com/stocks/AMZN)__, __[Walmart](https://robinhood.com/stocks/WMT)__, __[FedEx](https://robinhood.com/stocks/FDX)__, and __[UPS](https://robinhood.com/stocks/UPS)__ have set goals to go all EV by 2040, but the transition has been wobbly (blame supply constraints). Amazon ordered 100K electric vans from __[Rivian](https://robinhood.com/stocks/RIVN)__, but their ETA has been delayed to 2030. FedEx also plans to buy 100% EVs, but not until 2030.

Zoom Out

Stories we’re watching…

__The snowball effect...__ The cloud biz that helped __Pizza Hut__ predict Super Bowl ’za orders is on fire: shares of __[Snowflake](https://robinhood.com/stocks/SNOW)__ have doubled since its [record](https://snacks.robinhood.com/newsletters/20h2lIyDiEHNUxZmIBTfPu/articles/3sU0d3u3Bv3EujmS6dVQ7U/)-breaking 2020 IPO on huge demand for cloud storage, and 40% of Fortune 500 companies now [use](https://www.investors.com/news/technology/snowflake-snow-stock-buy-now/) its software. But Snow shares have thawed 30% from highs on the wider tech selloff, plus competition from upstarts like __DataBricks__. Snow has yet to turn a profit, but expects annual sales to 18X by 2029. Amazon’s AWS cloud sales soared last quarter. We’ll see if Snowflake follows suit when it reports Wednesday.

__One (brand) fits all...__ __[Victoria's Secret](https://robinhood.com/stocks/VSCO)__ has been facing an identity crisis, from C-Suite [harassment](https://www.newsweek.com/victorias-secrets-lingerie-giant-past-controversies-1601496) allegations to changing views of what "sexy" means. Last week the lingerie brand debuted its first-ever model with Down syndrome, part of a series of inclusive campaigns aimed at revamping its image. It seems to be making a difference: last quarter its in-store sales [jumped](https://wwd.com/fashion-news/intimates/victorias-secret-earnings-100-supply-chain-distruptions-1234998185/) 22%, to $920M, but it warned that supply delays would cost it $100M. We'll see if VS’s inclusivity push can restore sales to pre-pandemic highs when it reports Thursday.

Events

Coming up this week…

- __[Equity](https://snacks.robinhood.com/newsletters/1CH8xdDasx6jEeeUXUwNeS/articles/1Ce60Aclf9kslaeFuVdd8U/):__ There were a record 20 Black CFOs at S&P 500 companies last year, but more than 90% of the top 50 most valuable public companies don’t have any Black C-suite execs. Many firms still have a pipeline problem that’s limiting C-suite diversity.
- __[Hack](https://snacks.robinhood.com/newsletters/1CH8xdDasx6jEeeUXUwNeS/articles/2RWxZW3i3ZY5AK2hAhEi2b/):__ After global leaders sanctioned Russia for invading Ukraine, shares of cybersecurity giants __[Palo Alto Networks](https://robinhood.com/stocks/PANW)__, __[CrowdStrike](https://robinhood.com/stocks/CRWD)__, __[Fortinet](https://robinhood.com/stocks/FTNT)__, and __[Mandiant](https://robinhood.com/stocks/MNDT)__ spiked on fears of a cyberwar.
- __[Tuneware](https://snacks.robinhood.com/newsletters/2aFNNo1cLzMdtzoAVyyeFI/articles/4BJLnkiuQ9iY6Cib0jgljw/):__ __[Spotify](https://robinhood.com/stocks/SPOT)__ launched its first physical product, the Car Thing music player for the dash of your ’97 Nissan. Meanwhile, Kanye debuted his new album on a $200 device (that looks like a smoke alarm).

ICYMI

Last week's highlights

How Russia's war with Ukraine is impacting global markets, from bonds to crypto

Ketanji Brown Jackson was nominated to be the first Black woman to sit on the Supreme Court

🛢️ How Russia’s war with Ukraine is impacting global markets

__Modern warfare isn’t confined to the battlefield…__ Ukrainian banks’ and government websites were [hit](https://www.cnbc.com/2022/02/23/cyberattack-hits-ukrainian-banks-and-government-websites.html) with cyberattacks this week ahead of Russia’s deadly invasion. Since the US and its allies [imposed](https://snacks.robinhood.com/newsletters/2aFNNo1cLzMdtzoAVyyeFI/) sanctions on Moscow, Western officials have been on high alert for Russian cyber-retaliation. Shares of cybersecurity companies have spiked:

- Network-security stocks __[Palo Alto Networks](https://robinhood.com/stocks/PANW)__, __[CrowdStrike](https://robinhood.com/stocks/CRWD)__, __[Fortinet](https://robinhood.com/stocks/FTNT)__, and __[Mandiant](https://robinhood.com/stocks/MNDT)__ all surged at least 10% yesterday, and cybersecurity ETFs also jumped.

__It’s scary out there…__ Even before Russia’s invasion of Ukraine, the cybersecurity industry had been seeing a flood of investment: VC-backed security companies have [raised](https://news.crunchbase.com/news/cybersecurity-russian-ukraine-crowdstrike-securonix-bluevoyant/) $2.6B so far *this month*, about 4X more than the same period last year. 

- __Cybercrime is a growing biz:__ the number of cyberattacks [increased](https://www.thestreet.com/markets/palo-alto-networks-stock-leaps-as-cyber-attack-surge-lifts-outlook) 70% last year, and data breaches cost US companies a record $4.2M on average. The global [cost](https://www.ibm.com/security/data-breach) of hacks topped $6T last year and is forecast to hit $10.5T by 2025. 
- __Russia’s already a big player:__ Cybercrime analysts [say](https://www.bbc.com/news/technology-60378009) nearly 75% of money stolen via ransomware attacks last year went to Russia-linked cybercriminals. In recent years, logistics giants __[FedEx](https://robinhood.com/stocks/FDX)__ and __[Maersk](https://robinhood.com/stocks/AMKBY)__ have also been targeted by Russian hackers.

Hack

__A new era of state-sponsored cybercrime is dawning…__ Russia was responsible for an [estimated](https://fortune.com/2021/10/07/microsoft-russia-is-behind-58-percent-of-detected-state-sponsored-hacks-cybersecurity/) 60% of state-sponsored cybercrime detected by Microsoft last year, and now the FBI is [warning](https://www.cnn.com/2022/02/22/politics/russia-sanctions-fbi-cyber-threats-ransomware/index.html) US banks and businesses to watch out for Russian ransomware attacks. Biden has asked American tech giants like __[Google](https://robinhood.com/stocks/GOOGL)__ and __[Microsoft](https://robinhood.com/stocks/MSFT)__ to help beef up cybersecurity, but has struggled to boost the national cybersecurity budget since his Build Back Better bill [stalled](https://snacks.robinhood.com/newsletters/6j2M9rRr7dWfX9iVqkya8A/) in Congress.

Cybersecurity stocks surge as Russia’s invasion of Ukraine highlights the risks of cyberwar

__A seat at the table…__ Despite a national reckoning on race and equity, corporate America has been slow to diversify its C-suites. The tide’s *slowly* turning: last [year](https://www.wsj.com/articles/racially-diverse-cfos-are-in-high-demand-but-challenges-persist-11621942201?mod=article_inline) there were a record 20 Black chief financial officers at S&P 500 companies. But there are still only four Black CEOs in the Fortune 500, and more than 90% of the 50 most valuable public companies in the US don't have any black C-suite execs, including __[Walmart](https://robinhood.com/stocks/WMT)__, __[Costco](https://robinhood.com/stocks/COST)__, and __[T-Mobile](https://robinhood.com/stocks/TMUS)__. 

__Self-fulfilling prophecy…__ Last year, [over](https://news.bloomberglaw.com/securities-law/s-p-500-opens-up-on-diversity-after-floyd-as-investors-seek-more) 400 S&P companies used the words “diversity,” “equity,” or “inclusion” in their annual [filings](https://news.bloomberglaw.com/securities-law/s-p-500-opens-up-on-diversity-after-floyd-as-investors-seek-more). But creating racial equality in the upper ranks of a workforce is about more than quota-filling and good PR. Board members make some of the most critical decisions in any big company. And they’re traditionally responsible for picking their successors, who have been primarily white men.

- __Bottom up:__ Last year, Black workers [made](https://www.mckinsey.com/featured-insights/diversity-and-inclusion/race-in-the-workplace-the-black-experience-in-the-us-private-sector) up 12% of entry-level employees in the private sector, and only 7% of managers. 
- __Singled out:__ Corporate [hiring](https://www.forbes.com/sites/kwamechristian/2022/02/07/in-support-of-black-leadership-tips-for-building-confidence--success/?sh=1021b5076e2e) bias and concerns about being the only employee of color on an all-white leadership team can make it hard for Black candidates to gain the experience needed to advance.

__It’s a matter of principle *and* money…__ when it comes to fostering diversity in the boardroom. One [study](https://www.morganstanley.com/ideas/corporate-board-diversity-stock-price) found that publicly traded companies with more people of color on their boards saw nearly 2% higher stock returns than those who didn’t. Companies have to invest in a diverse talent pipeline, especially in early career, to break the cycle. Now, historically Black colleges and universities are stepping in: __[Morgan Stanley](https://robinhood.com/stocks/MS)__ has [pledged](https://www.bloomberg.com/news/articles/2021-02-16/goldman-sachs-pledges-25-million-to-historically-black-colleges) $25M to give HBCU students the opportunity to train and network within the company and gain access into the finance biz.

America’s boardrooms are getting more diverse, but inequity in hiring pipelines and promotions makes rising through the ranks difficult

Cybersecurity stocks surge as Russia’s attack on Ukraine spurs cyberwar fears

Big mood: Netflix trivia night [The Good Brigade/Getty Images]

[Adam Berry/Stringer via GettyImages]

Kyiv's subway stations, among the world’s deepest, were completed during the Cold War to double as bomb shelters in the event of enemy attack. Ukrainians are now using them for that very purpose.

💾 Russia stokes cyberwar fears

__Refresh for updates...__ Days after Russia sent troops into Moscow-backed regions of Ukraine, the US has been upping its response by adding to targeted financial sanctions. Yesterday the US [slapped](https://www.reuters.com/business/energy/us-plans-sanctions-company-building-russias-nord-stream-2-pipeline-cnn-2022-02-23/) sanctions on the company building Russia’s $11B Nord Stream 2 gas pipeline which spans from Russia to Germany after Germany [halted](https://news.yahoo.com/white-house-hails-germanys-decision-to-halt-certification-of-nord-stream-2-pipeline-to-punish-russia-001744081.html) its opening.

- __Punishment:__ Western leaders are using the pipeline as leverage against Russia, since oil exports = 30% of Russia's economy.
- __Risk:__ Russia supplies more than a third of the EU’s natural gas, and could retaliate by shutting off some of those fuel exports.
- __Next:__ More sanctions seem likely. Late last night, President Biden [said](https://twitter.com/POTUS/status/1496716484906819589) the US and its allies "will be imposing severe sanctions" on Russia, and will continue to provide support to Ukraine.

__Companies are nervous...__ Most Western corporations don't have operations in Russia and Ukraine. But large multinationals that *do* are [bracing](https://www.wsj.com/articles/ukraine-crisis-has-big-western-businesses-girding-for-fallout-from-sanctions-11645619447?mod=business_lead_pos1) for further sanctions, which Western leaders could leverage:

- __Oil:__ __[BP](https://robinhood.com/stocks/BP)__, __[Exxon](https://robinhood.com/stocks/XOM)__, and __[Shell](https://robinhood.com/stocks/SHEL)__ all have significant investments in Russia that could be threatened by sanctions on Russia’s energy market. 
- __Banks:__ __[Chase](https://robinhood.com/stocks/JPM)__ and __[Citi](https://robinhood.com/stocks/C)__, which do business in Russia, would have to cut ties with local lenders if broad financial sanctions happen. Cross-border payments could be frozen, which might mean lost $$$. 
- __Cars:__ Dodge and Jeep parent __[Stellantis](https://robinhood.com/stocks/STLA)__ says it would limit production in Russia if sanctions disrupt its operations. 
- __Beer:__ Danish brewer __[Carlsberg](https://robinhood.com/stocks/CABGY)__ is Ukraine’s biggest beer seller, while Russia accounts for 10% of its sales. It has breweries in both countries and said it’s working on contingency plans in case sanctions disrupt beer-making.

Sanctioned

__Sanctions could hit consumers hardest…__ especially Europeans. Western companies were relatively unaffected by Russia’s 2014 annexation of Ukraine’s Crimean Peninsula. American and EU officials say sanctions will be harsher this time, and  consumers could feel that at the pump. As the world’s #2 exporter of natural gas and #3 exporter of oil, Russia can cut supply at a time when prices are already sky high. Americans, who are [facing](https://www.marketwatch.com/story/u-s-drivers-brace-for-the-highest-prices-in-9-years-as-oil-approaches-100-a-barrel-11645558796) for the highest gas prices since 2013, could experience even more pump anxiety if global supply shrinks. 

Companies brace for impact from Russia sanctions, but consumers could get hit hardest

__Yeezy taught me…__ Kanye West isn't afraid to be vocal, whether it’s about his [personal](https://www.buzzfeednews.com/article/ellendurney/kanye-west-new-lyrics-about-kim-kardashian-pete-davidson) life or his moves to take on an "oppressive" music industry. The artist now known by “‘Ye’” live-streamed a “Donda Experience” event on Tuesday to [promote](https://variety.com/2022/music/news/kanye-wests-donda-2-event-playboi-carti-marilyn-manson-jack-harlow-1235188231/) his new “Donda 2” album. Ye’s making the record available exclusively on a physical $200 “Stem Player” device (think: a new-age iPod that [looks](https://www.stemplayer.com/) like a smoke detector). Why: Ye wants to bypass streaming platforms like __[Apple](https://robinhood.com/stocks/AAPL)__, __[Amazon](https://robinhood.com/stocks/AMZN)__, __[Spotify](https://robinhood.com/stocks/SPOT)__, and YouTube. Kanye also tried to skip those streamers with his launch event:

- __Ye originally said__ the event would stream only at __[IMAX](https://robinhood.com/stocks/IMAX)__ theaters, and [later](https://www.wsj.com/articles/kanye-west-says-donda-2-album-will-be-released-only-on-200-stem-player-device-11645221043) only on the Stem site. But ultimately it streamed free on YouTube and Amazon’s Twitch (awk).
- __The original Donda__ set a streaming record for Apple Music last year when it got 60M streams on day #1. Kanye [says](https://www.macworld.co.uk/news/kanye-west-turned-down-apple-music-3813653/#:~:text=In%20a%20series%20of%20Instagram,through%20his%20own%20Stem%20Player.) he turned down $100M from Apple for “Donda 2.” 

__The revolution will be streamed…__ but it’s less certain  *where*. Many musicians have criticized streaming platforms for their payout structures: artists reportedly earn only about 10% of streaming revenue, so they have to hit *1M* streams just to pocket $5K on Spotify, Apple, or Amazon. Several stars have attempted to ditch major platforms in a push to better control their earnings:

- __Beyoncé__ made her breakthrough 2016 album “Lemonade” exclusive to __Tidal__, a platform formerly co-owned by her husband, Jay-Z, and his frenemy Kanye. But Tidal never caught on, and last year __[Square](https://robinhood.com/stocks/SQ)__ bought it.
- Taylor Swift has shunned both Apple Music and Spotify at various times, and [re-recorded](https://snacks.robinhood.com/newsletters/1e3lwXtO6b6giHg2TXcAGO/articles/799g3A4a08tsjHQiwWNyi9/) her “Red” album to claim streaming bucks back from labels.

This new Kanye album is fire [Photodisc via Getty Images]

__Habit platforms are sticky…__ It’s one thing to fight streamer payouts, but another to fight listener habits. Taylor, Kanye, and Beyoncé can afford to ditch Spotify or Apple *temporarily* to fight for better terms. But they’ve all returned to where the ears and playlists are: Spotify and Apple have a [combined](https://www.theverge.com/2022/1/20/22892939/music-streaming-services-market-share-q2-2021-spotify-apple-amazon-tencent-youtube#:~:text=Spotify%20was%20the%20largest%20music,third%20with%2013%20percent%20apiece.) global market share of more than 50%, but they’re not invincible. Example: Spotify shares [fell](https://variety.com/2022/digital/news/spotify-2-billion-market-cap-neil-young-joe-rogan-1235166798/) 6% in the days after Neil Young jumped ship in protest of Joe Rogan’s vax misinfo, and they still haven’t recovered.

Kanye goes direct to consumer with his new album, as artists’ streaming frustration grows

(Photo by Omer Messinger/Getty Images)

The US is the world’s largest plastic polluter, contributing 278 pounds of plastic per person each year

🇺🇦 The impact of Russia sanctions

__Stocks are down — what's new?...__ ICYMI: stocks have been falling all year as investors [worry](https://snacks.robinhood.com/newsletters/2MVH2KDOTUkUCH5cozGBos/articles/5FbD7KaOehttkedpLIaG0m/) about inflation and the Fed’s coming interest-rate hikes. This month, there's a new concern: Russia's increasing aggression toward Ukraine. Refresher:

- __1991:__ Ukraine gained independence from Russia when the Soviet Union fell, but Russia has never fully pulled back its influence there ([see](https://www.britannica.com/place/Ukraine/The-crisis-in-Crimea-and-eastern-Ukraine): 2014 annexation of Crimea).
- __Late January:__ Russia stationed 100K+ troops near its border with Ukraine, fueling invasion fears among Western leaders.
- __Monday:__ Russian President Putin [recognized](https://www.cnn.com/2022/02/21/europe/russia-ukraine-tensions-monday-intl/index.html) the independence of two separatist regions in Ukraine (see: [this brutal exchange](https://www.bbc.com/news/av/world-europe-60485967)) and ordered Russian troops to enter. 
- __Yesterday:__ President Biden said he viewed Russia's move into Ukraine as the beginning of an invasion, and [announced](https://www.wsj.com/articles/white-house-calls-russian-moves-an-invasion-after-initially-refraining-from-using-term-11645549648) the first wave of new US sanctions to cut off Russia from Western financing. Earlier, the EU agreed to ban the purchase of Russian government bonds.
- __Also yesterday:__ Germany halted the [key](https://snacks.robinhood.com/newsletters/6oUasks4UHzb87QXAq6Z3b/articles/42MsC1pWn5GL5HyZpMd1Sx/) Nord Stream 2 pipeline, which carries gas from Russia to Germany (oil exports = 30% of Russia's economy).

__The short-term effect on stocks...__ The S&P 500 index is down 5% for the month, as Russia-Ukraine tensions add to what’s already hurting markets:

- __Uncertainty:__ While some uncertainty is always a given, high turmoil is usually bad for markets. Investors tend to retreat to "safe-haven assets" like government bonds, gold, and even "defensive stocks" like healthcare and utilities, which tend to be less affected by volatility.
- __Inflation:__ Sanctions on Russia could cause prices of oil, food, and other commodities to soar *even more*. Russia supplies more than a third of the EU’s natural gas, while Russia and Ukraine produce much of the world’s wheat and corn. 

Alexey Nikolsky / Getty Images

Tense

__How could markets react long term?…__ We can’t predict the future, but historically the US market has bounced back from conflicts over time. Since 1941 the total fall in the stock market after major geopolitical events was, on average, [5%](https://lplresearch.com/2020/01/08/how-stocks-do-during-geopolitical-events/) — with a couple months to eventually recover. Of course, even if the market recovers, individual stocks might not. That’s one reason some investors diversify to help hedge risk.

How the escalating Russia-Ukraine conflict could affect markets — short and long term

__Blasting “Good 4 U” in your ’97 Civic…__ __[Spotify’s](https://robinhood.com/stocks/SPOT)__ Car Thing is now a real thing. Its first physical product — it’s literally called *Car Thing* — [went](https://www.theverge.com/2022/2/22/22945403/spotify-car-thing-price-release-date) on sale in the US yesterday after a limited release last April, when 2M people joined the waitlist. The $90 dash-mounted gadget is meant for cars without infotainment screens, and lets drivers control their Spotify tunes via touchscreen or voice control: It works only with Spotify Premium and requires a smartphone with Bluetooth or an aux cord. 

__Hard(ware) right turn…__ Spotify has twice as many listeners as its closest streaming rival (__[Apple](https://robinhood.com/stocks/AAPL)__). Now it joins a long list of tech companies that’ve attempted to make the jump from software to hardware. Those efforts have had mixed results:

- __Hail Mary hardware projects__ like __[Microsoft’s](https://robinhood.com/stocks/MSFT)__ Zune MP3 player and __[Google](https://robinhood.com/stocks/GOOGL)__ Glass AR glasses were discontinued after falling flat with consumers. 
- __But connected gadgets__ like __[Amazon’s](https://robinhood.com/stocks/AMZN)__ Kindle and Google’s Home Speakers succeeded by offering simple integrations with their parent companies’ other products and services.

Blasting Billie Eilish on the Car Thing [Jose Luis Pelaez Inc. / Digital Vision via Getty Images]

Thingy

__Not all products are designed to be huge sellers…__ Since most new cars come with either Apple’s CarPlay or Google’s Android Auto preinstalled, Spotify is launching a product into a market that’s shrinking, not expanding. And it knows that. Car Thing isn’t meant to create long-term revenue — it’s meant to build loyalty and encourage *more* Premium listening at home, at work, and on the road *now*. Looking ahead, Spotify [says](https://www.cnet.com/tech/services-and-software/features/spotifys-car-thing-is-about-to-face-the-music/) it's focused on audio, not hardware. Its execs have even [described](https://www.cnet.com/tech/services-and-software/features/spotifys-car-thing-is-about-to-face-the-music/) Car Thing as a “means to an end.”

Spotify rolls out its first physical product for your car — but don’t call it a hardware biz

The Beijing Winter Games had the worst TV ratings in Olympic history — but the largest streaming audience ever

🇺🇦 What Russia’s invasion could mean for markets

__Feels so normal, it's abnormal...__ walking to the restaurant bathroom unmasked. We thought "back to normal" was happening this winter, until Omicron. But now that cases have waned and proved less severe, a national reopening mania has started... for real. Anticipation is growing:

- __Restrictions are falling__ daily. Half of US states have [ditched](https://www.nbcnews.com/news/us-news/mask-mandate-map-february-2022-n1289093) mask mandates over the past month, and even the CDC wants to give people [a break](https://www.cnbc.com/2022/02/16/cdc-wants-to-give-people-a-break-from-wearing-masks-as-pandemic-improves-director-says.html). Lots of Super Bowl fans were unmasked at a sold-out stadium, and Coachella and Stagecoach say they won’t have Covid-related restrictions when their festivals return in April.
- __Spending is up.__ January saw the strongest monthly gain in retail sales since March 2020, when the first stimulus checks hit. Retail sales were up 4% from December.
- __Travel is rebounding,__ and __[Marriott](https://robinhood.com/stocks/MAR)__, __[Hilton](https://robinhood.com/stocks/HLT)__, and __[Airbnb](https://robinhood.com/stocks/ABNB)__ [expect](https://www.reuters.com/business/marriott-airbnb-others-see-global-travel-rebounding-2022-2022-02-16/) global travel to surpass pre-Covid levels this year.

__But there's a dark cloud...__ over reopening. Consumer prices were up 7.5% in January from a year earlier, the fastest increase in 40 years. While retail sales jumped, it’s [partly](https://www.wsj.com/articles/us-economy-january-2022-retail-sales-11644963650?mod=business_lead_pos11) due to *higher prices* — not more purchases. Wages are rising, but pay bumps [haven't](https://www.cnbc.com/2022/02/10/inflation-eroded-pay-by-1point7percent-over-the-past-year.html) kept up with inflation.

- __Consumers are feeling it —__ especially low-income Americans. Food prices are up 7% from a year ago, and gas is up *40%*. __[Walmart](https://robinhood.com/stocks/WMT)__, the consumer bellwether, [says](https://www.cnbc.com/2022/02/17/walmart-cfo-brett-biggs-says-customers-are-paying-attention-to-rising-prices.html) shoppers are on edge about grocery bills. Meanwhile, consumer sentiment is at a decade [low](https://www.reuters.com/world/us/us-consumer-sentiment-drops-more-than-10-year-low-february-survey-2022-02-11/).
- __Companies are passing on rising costs__ to consumers, as inflation starts to dent profits. Still: Profit at the 500 largest companies were up 50% last year as consumers [proved willing](https://www.cnbc.com/2022/01/13/profits-for-sp-500-companies-rose-22percent-in-the-fourth-quarter-and-nearly-50percent-in-2021-estimates-show.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosmarkets&stream=business#:~:text=S%26P%20500%20operating%20margins%20have,were%20able%20to%20raise%20prices) to pay more. __[Coke](https://robinhood.com/stocks/KO)__, __[Pepsi](https://robinhood.com/stocks/PEP)__, and __[Procter & Gamble](https://robinhood.com/stocks/PG)__ reported [strong sales](https://www.cnbc.com/2022/02/16/walmarts-earnings-may-signal-if-shoppers-getting-spooked-by-inflation.html) despite upping prices.

What do you mean “no vax card required”? [SolStock/E+ via Getty Images]

Endgame

__Prices are spoiling the party…__ Literally: booze giant __[Constellation](https://robinhood.com/stocks/STZ)__ [wants](https://seekingalpha.com/article/4478331-constellation-brands-stz-ceo-william-newlands-on-q3-2022-results-earnings-call-transcript) to raise prices as much as buyers can absorb. But there’s medicine in sight. Last summer, the Fed wasn’t expected to raise rates until next year. Now at least three hikes are expected *this* year. Rising rates could hurt stocks and spending short term, but help consumers and the economy long term by curbing inflation.

"Reopening mania" is building, but there's a dark cloud over it — and your wallet feels it

__House of Gucci...__ Lux brands took a hit when lockdowns curbed the need for Balenciaga sneaks and Prada bucket hats. Last year, Gucci and Yves Saint Laurent owner __Kering__ had a record $20B comeback. Gucci sales jumped 30% last quarter thanks to big marketing and huge China demand. Luxe giants like Kering and __[LVMH](https://robinhood.com/stocks/LVMUY)__ are well positioned as prices rise: their customers are less price sensitive, and higher prices = #exclusivity. Now lux brands are looking to the metaverse. Last year, a Gucci digi-purse sold on __[Roblox](https://robinhood.com/stocks/RBLX)__ for nearly 20% more than the leather version.

__[Google](https://robinhood.com/stocks/GOOGL) searched...__ its soul. Digital ad giants are nervous. Last week Google said it would [stop](https://www.cnbc.com/2022/02/16/google-plans-android-privacy-change-similar-to-apples.html) advertisers from tracking Android users, after __[Apple](https://robinhood.com/stocks/AAPL)__ made a similar [move](https://www.cnbc.com/2021/11/13/apples-privacy-changes-show-the-power-it-holds-over-other-industries.html#:~:text=Apple's%20ad%20privacy%20change%20impact%20shows%20the%20power%20it%20wields%20over%20other%20industries&text=In%20April%2C%20Apple%20released%20an,from%20using%20a%20device%20ID.&text=While%20the%20changes%20have%20been,re%20also%20benefitting%20Apple's%20advertising.) last year. Since Android phones make up 70% of global smartphones, the change could cut into sales at __[Twitter](https://robinhood.com/stocks/TWTR)__, __[Snap](https://robinhood.com/stocks/SNAP)__, __[Pinterest](https://robinhood.com/stocks/PINS)__, and __[Meta](https://robinhood.com/stocks/META)__. This year Meta [expects](https://www.nytimes.com/2022/02/03/technology/apple-privacy-changes-meta.html) to lose $10B in ad revenue from Apple’s update, and its stock has fallen 45% from its September peak. Meta has told investors to stay tuned for its meta investments, but they may take a while to offset slowing ad sales.

__Extreme makeover, pro edition…__ Home-improvement chains saw monster sales during the pandemic as we spent weekends building __[Zoom](https://robinhood.com/stocks/ZM)__-worthy home offices. Now the experts are taking over. __[Home Depot's](https://robinhood.com/stocks/HD)__ pro biz (think: drywall, drill [rentals](https://www.homedepot.com/c/tool_and_truck_rental)) has topped DIY as homeowners outsource their paint jobs to contractors (who spend more $$ than DIYers). Last quarter, rival __[Lowe's](https://robinhood.com/stocks/LOW)__ [raised](https://www.cnbc.com/2021/11/17/lowes-low-q3-2021-earnings.html) its sales forecast, partially thanks to a 16% spike in pro sales. We’ll see if it can keep boosting the bottom line for Lowe’s and the Depot when they report this week.

__Market vax-uration…__ Biotech newcomer __[Moderna’s](https://robinhood.com/stocks/MRNA)__ looking for its next move. The company used its novel mRNA “platform” to quickly make a Covid vax, and [sold](https://www.bloomberg.com/news/articles/2021-11-04/moderna-cuts-2021-vaccine-sales-estimate-as-revenue-falls-short) an estimated $15B+ of jabs last year. But Moderna’s biz is vulnerable since it makes only one product, and sales growth is slowing as vax rates plateau. Shares are down 70% from their September peak, and now Moderna’s spending billions to boost production abroad and add potential blockbuster HIV and flu drugs to its pipeline. We’ll see how those investments are tracking when Moderna reports on Thursday.

Coming up this week...

- __[Chipper](https://snacks.robinhood.com/newsletters/1WQENztNAu8UzlWhIRxGLw/articles/18EKyGD00qIzaSzibZqpiz/):__ Good news re: your back-ordered laptop. Last week __[Intel](https://robinhood.com/stocks/INTC)__ said it was buying Israeli chip maker __[Tower](https://robinhood.com/stocks/TSEM)__ for $5.4B to boost production. Chip and EV giants have pledged billions to revamp US manufacturing.
- __[Ripe](https://snacks.robinhood.com/newsletters/5LmNo4XqY94BEILxHeMVFj/articles/2nJt7ICl3XBGhemlAUlHzo/):__ Avocados are about to cost more green: avo prices are [rising](https://fortune.com/2022/02/16/avocado-crisis-chipotle-prices-skyrocket-mexico-president/) after the US banned imports from Mexico when a US food inspector was threatened amid cartel chaos. Mexico supplies 80% of the US’s avocados.
- __[Burbs](https://snacks.robinhood.com/newsletters/7soGkARtnuPgraycLIFyKn/):__ Auntie Anne’s for lunch: Sales at __[Simon Property Group](https://robinhood.com/stocks/SPG)__, the largest mall owner in the US, have surpassed pre-pandemic levels. But retail in cities isn’t seeing the same rebound.

Last week's highlights...

"Reopening mania" is happening as mandates fall, but inflation is a dark cloud

[Ollie Millington / Getty Images]

There were no statues honoring Black people in the US until 1974

🏁 The Covid endgame, and Google’s ad trouble

__About 2,640,000,000 results…__ But they’re *all* sponsored. This week, search-engine blogger DKB [wrote](https://dkb.io/post/google-search-is-dying) a viral post claiming “__[Google](https://robinhood.com/stocks/GOOGL)__ Search Is Dying.” The argument: Google search results aren’t as relevant as they used to be because they’re cluttered with ads and SEO-optimized clickbait. But Google still dominates the [search](https://www.statista.com/statistics/216573/worldwide-market-share-of-search-engines/) biz with 86% market share. 

- __Google has been the world’s largest search engine__ since 2000, two years after it was founded. And search is still its cash cow: ad revenues more than [doubled](https://www.statista.com/statistics/266249/advertising-revenue-of-google/) in the past four years, [boosting](https://www.reuters.com/technology/google-parent-alphabet-beats-revenue-estimates-online-ad-strength-2022-02-01/#:~:text=For%20the%202021%20full%20year,few%20weeks%20of%20the%20pandemic.) parent Alphabet to record sales last quarter.
- __But some users are ditching Google__ for more “authentic” results. Consider a search for “best vacuum”: Google gives you a half-dozen [ads](https://www.google.com/search?q=best+vacuum&rlz=1C5CHFA_enUS959US960&ei=Yp4OYoTuObqzytMP_8y7wAE&ved=0ahUKEwiEp6WCuYf2AhW6mXIEHX_mDhgQ4dUDCA8&uact=5&oq=best+vacuum&gs_lcp=Cgdnd3Mtd2l6EAMyBQgAEIAEMgUIABCABDIICAAQgAQQsQMyBQgAEIAEMggIABCABBCxAzIICAAQgAQQsQMyCAgAEIAEELEDMgUIABCABDIFCAAQgAQyBQgAEIAEOgcIABBHELADOgcIABCwAxBDOgoIABDkAhCwAxgAOhIILhDHARCjAhDIAxCwAxBDGAE6FQguEMcBEKMCENQCEMgDELADEEMYAToSCC4QxwEQ0QMQyAMQsAMQQxgBOgUIABCRAkoECEEYAEoECEYYAVCDBViVDGDNDWgCcAF4AIABaIgB6gKSAQM1LjGYAQCgAQHIARPAAQHaAQYIABABGAnaAQYIARABGAg&sclient=gws-wiz) and 700-word blog posts, while __Reddit__ offers unvarnished [reviews](https://www.reddit.com/r/VacuumCleaners/comments/sut3pr/sebo_k2_or_miele_c1/) from recent buyers on r/VacuumCleaners.

__Buried in the results…__ The search biz that made Alphabet huge could become a liability if users can’t easily find what they’re looking for, or don’t trust the results. And as Alphabet spent (and [lost](https://www.cnbc.com/2021/02/02/google-cloud-lost-5point61-billion-on-13point06-billion-revenue-last-year.html)) billions on Google Cloud and Waymo over the past few years, its core search biz has run into obstacles:

- __Growing competition__ from __[Microsoft’s](https://robinhood.com/stocks/MSFT)__ Bing, China’s __[Baidu](https://robinhood.com/stocks/BIDU)__, and privacy-focused __DuckDuckGo__ has cut into Google’s search market share by 5% since 2018.
- __Global regulators__ have also launched several antitrust lawsuits against Google, [accusing](https://www.prnewswire.com/news-releases/class-action-lawsuit-filed-in-california-alleging-google-is-paying-apple-to-stay-out-of-the-search-engine-business-301453098.html) it of favoring its products in shopping results.

When every search result is sponsored [sturti/E+ via Getty Images]

Results

__The search industry may be splintering…__ And Alphabet’s mountain of lawsuits could cut into its huge ad sales and give competitors a chance to take a slice of Google’s search share. There’s a reason people use “Google” as a verb. But as the internet becomes more decentralized, thanks to the rise of blockchain-backed communities, users could gravitate to new search options that reduce ad clutter and give more helpful results. 

Is Google search getting worse? A viral post points to cracks in Alphabet’s search supremacy

__Parking by the food court just got tougher…__ Malls were hit hard during the pandemic as shoppers ditched fitting rooms for sweatpants. Lockdown measures forced a [record](https://fortune.com/2021/01/07/record-store-closings-bankruptcy-2020/) 12K+ US stores to close in 2020, as mall icons like __J. Crew__, __Neiman Marcus__, and __Brooks Brothers__ filed for [bankruptcy](https://www.cnbc.com/2020/12/26/the-10-biggest-retail-bankruptcies-of-2020.html). Now __[Simon Property Group](https://robinhood.com/stocks/SPG)__, the country’s largest mall owner, is calling the comeback: 

- __IRL again:__ SPG's sales topped pre-pandemic levels for the first time last summer as pent-up consumer demand and extra savings [revived](https://retailbum.com/2021/retail/simon-property-group-mall-sales-are-back-to-pre-pandemic-levels/) IRL shopping.  
- __Burbs:__ Last year, Scottsdale's Fashion Square, one of Arizona’s biggest malls, saw a 16% jump in foot traffic [from](https://www.globest.com/2021/08/16/malls-have-hit-pre-pandemic-foot-traffic-levels/) 2019, while Houston’s popular Galleria saw a 7% spike.
- Commercial real-estate broker __[CBRE](https://robinhood.com/stocks/CBRE)__ [said](https://finance.yahoo.com/news/why-american-mall-could-comeback-220028935.html) the US retail market could see a decade-high number of new leases this year.

__Tale of two retails…__ While malls have been benefiting from the return to normal, urban retailers are still struggling. Shares of __[Vornado Realty](https://robinhood.com/stocks/VNO)__, which owns property in metro [areas](https://therealdeal.com/national/2022/02/15/urban-retail-not-recovering-like-malls-shopping-centers-vornado/) like New York, Chicago, and San Francisco, are down 33% over the past two years. A couple reasons:

- __Tourist turbulence:__ The pandemic wiped $60B in tourism $$$ from NYC’s [economy](https://www.nbcnewyork.com/news/local/60-billion-and-89000-jobs-lost-the-crushing-impact-of-nyc-tourisms-collapse/3024166/). While international visitors — and their wallets — are [trickling](https://www.nytimes.com/2021/11/22/nyregion/new-york-tourism.html) back, the city expects that traffic to reach a fifth of pre-pandemic levels this year. 
- __Digi happy hours:__ Now that just [3%](https://www.bloomberg.com/news/articles/2022-02-14/just-3-of-white-collar-workers-want-a-full-office-return) of office workers say they want to return in person full time, retailers that used to thrive on those visits are worried. (NYC’s new mayor is all but [begging](https://www.bloomberg.com/news/articles/2022-02-14/just-3-of-white-collar-workers-want-a-full-office-return) CEOs to bring their employees back.)

Scraper

__There’s a long road ahead…__ Brick-and-mortar retail — urban and suburban — still faces an existential threat from our shift to online shopping. Case in point: there’s 90M square feet, or 16 [Mall](https://www.bloomberg.com/news/articles/2021-12-09/malls-ditch-shopping-to-fill-wasteland-of-vacant-retail-stores) of Americas, worth of empty US storefronts. Vornado's CEO says that even though urban commercial rents may have bottomed, they’re unlikely to ever return to the "unbelievable highs" of the Before Times. Now cities like Denver are offering [businesses](https://www.businessinsider.com/denver-colorado-downtown-business-retail-apocalypse-popup-economic-development-stores-2022-2) rent-free space and up to $20K in sweeteners to open shop downtown.

As Americans start to shop in actual stores more, suburban malls are making a comeback — but big-city storefronts are lagging

A viral post points to cracks in Google’s search supremacy

[NurPhoto / Getty Images]

*Kabob, goober, and crawdad* are words most Americans know but many Brits don’t. Yet Brits know *gazump, tippex, and quango*, which Americans do not. 