__So many rainbow logos…__ This [Pride Month](https://www.them.us/story/the-complete-history-of-pride), a lot of companies are showing support through [cheeky ad campaigns](https://www.out.com/pride/2022/6/03/burger-kings-pride-whoppers-come-two-tops-or-two-bottoms), social posts, and logos (think: __[Uber’s](https://robinhood.com/stocks/UBER)__ rainbow cars in its app). On Wednesday, President Biden signed an [executive order](https://www.whitehouse.gov/briefing-room/presidential-actions/2022/06/15/executive-order-on-advancing-equality-for-lesbian-gay-bisexual-transgender-queer-and-intersex-individuals/) geared toward protecting the record-breaking [7%](https://news.gallup.com/poll/389792/lgbt-identification-ticks-up.aspx) of American adults — and 21% of Gen Z adults — who identify as LGBTQ+. But the community’s weathering a harsh climate: 

- __State legislators__ have proposed an unprecedented ~300 [anti-LGBTQ+ bills](https://www.hrc.org/campaigns/the-state-legislative-attack-on-lgbtq-people#state-legislative-tracker-map) this year — many targeting transgender people and their access to healthcare. 
- __Meanwhile:__ The leaked Supreme Court [draft opinion](https://www.reuters.com/world/us/gay-marriage-other-rights-risk-after-us-supreme-court-abortion-move-2022-05-04/) that could overturn Roe v. Wade has [raised concerns](https://apnews.com/article/abortion-biden-us-supreme-court-right-to-privacy-6e1d7ee2a6d26bef09392971fd4948b5) over the future of same-sex marriage.

__Pride for sale...__ Corporate Pride participation [has surged](https://www.bcg.com/publications/2020/inclusive-cultures-must-follow-new-lgbtq-workforce) as companies seek to promote inclusive images. But many of the companies sponsoring parade floats also fund lawmakers who support anti-LGBTQ+ legislation. Powerhouses like __[Amazon](https://robinhood.com/stocks/AMZN)__, __[AT&T](https://robinhood.com/stocks/T)__, and __[Comcast](https://robinhood.com/stocks/CMCSA)__ have [collectively donated](https://www.dataforprogress.org/accountable-allies) ~$3M to anti-LGBTQ+ causes in recent years. Meanwhile, companies that’ve spoken out against anti-LGBTQ+ bills have done so inconsistently:

- __[Apple](https://robinhood.com/stocks/AAPL)__ [quietly](https://www.politico.com/news/2022/04/01/apple-lobbying-anti-lgbtq-laws-00022127) lobbies against anti-LGBTQ+ legislation under the leadership of Tim Cook, America’s most prominent publicly gay CEO. It’s the only company that [lobbied](https://www.legis.iowa.gov/lobbyist/reports/declarations?ga=89&ba=HF2416) against an Iowa bill that bars trans girls and women from participating in K-12 and collegiate sports.
- __[Disney](https://robinhood.com/stocks/DIS)__ chose not to take a public stance on Florida’s [“Don’t Say Gay”](https://time.com/6176224/florida-dont-say-gay-history-lgbtq-rights/) bill until it [passed](https://www.npr.org/2022/03/08/1085130633/disney-response-florida-bill-dont-say-gay). When employees protested, Disney announced it would donate $5M to LGBTQ+ orgs like the Human Rights Campaign. But the HRC [rejected](https://www.hrc.org/press-releases/human-rights-campaign-refuses-money-from-disney-until-meaningful-action-is-taken-to-combat-floridas-dont-say-gay-or-trans-bill) the funds, and Gov. Ron DeSantis [revoked](https://www.politico.com/news/2022/04/22/desantis-disney-special-status-dont-say-gay-00027302) Disney’s special tax status.

A Pride protest near NYC’s Stonewall Inn (Bryan R. Smith/AFP via Getty Images)

Pride

__Rainbow capitalism is a tough sell…__ and logos aren’t enough. An overwhelming [93%](https://news.gallup.com/poll/1651/gay-lesbian-rights.aspx#:~:text=May%2015%2D30-,93,-5) of Americans believe LGBTQ+ people should have equal work opportunities, but [nearly half](https://williamsinstitute.law.ucla.edu/press/workplace-discrim-press-release/) of LGBTQ+ workers have experienced unfair treatment at work — including being fired, not hired, or harassed because of their identity. Now a growing number of workers and consumers expect employers to prevent anti-LGBTQ legislation and provide an equitable workplace.

Rainbow capitalism is all the rage this Pride Month, but the workforce of tomorrow expects more activism

__Should’ve gone with waterproof mascara…__ for the Chapter 11 tears. Cosmetics giant __[Revlon](https://robinhood.com/stocks/REV)__ officially [filed](https://www.cnbc.com/2022/06/16/cosmetics-giant-revlon-files-for-chapter-11-bankruptcy-protection.html) for bankruptcy protection yesterday. Decades ago, Revlon was the second-largest beauty company and the first to feature a Black model. But when people ditched matte lipstick for masks in 2020, the 90-year-old biz barely avoided bankruptcy. Even though cosmetic sales are nearly back to pre-pandemic levels, things have gotten worse at Revlon:

- __Difficulty level = winged eyeliner:__ Revlon can’t fill a third of its orders (#supply-probs) and has $3.3B in debt to boot. Sales ticked up last quarter, but it’s still losing $$.
- __Kiss and makeup:__ Now Revlon expects $575M from lenders to save its brand, which it says is still in demand.

__Killed by Kylie…__ For decades, Revlon has sold most of its makeup in drugstores and malls. But the new generation discovers products on __TikTok__, not at __[CVS](https://robinhood.com/stocks/CVS)__. Now Revlon is losing customers to glossier names: the “tap to buy” trend has helped online-first brands like __Kylie Cosmetics__, __Glossier__, and Rihanna’s __Fenty Beauty__. Gen Z favorite __[E.L.F.](https://robinhood.com/stocks/ELF)__ crushed sales expectations last quarter thanks to social collabs with brands like Dunkin’.

__Even fellow legacy brand__ __[Estée Lauder](https://robinhood.com/stocks/EL)__ is faring better than Revlon (and is profitable), partly thanks to ecomm investments like viral skincare brand The Ordinary.

Smoky

__You can’t conceal billions in debt…__ Revlon was the first major brand to file for bankruptcy this year, but likely won’t be the last. Last year, nonfinancial US companies took on a record $1.7T of debt when interest rates were near zero. Now soaring interest will make it pricier for cash-strapped companies like __[Peloton](https://robinhood.com/stocks/PTON)__, __[Affirm](https://robinhood.com/stocks/AFRM)__, and __Just Eat__ to pay back IOUs.

Makeup mainstay Revlon files for bankruptcy protection — and other debt-plagued darlings could follow

Rainbow capitalism is rising, but the workforce of tomorrow expects more corporate activism

Dow Jones

S&P 500

Nasdaq

Bitcoin

Pride Month was chosen to commemorate the Stonewall Riots, which took place in NYC on June 28, 1969

🏳️‍🌈 Rainbow capitalism

__Drill, baby, drill…__ President Biden wants oil giants to pump more oil and extract fewer profits. This week he [urged](https://www.nytimes.com/2022/06/15/business/biden-oil-companies-gas-prices.html) __[Chevron](https://robinhood.com/stocks/CVX)__, __[Exxon](https://robinhood.com/stocks/XOM)__, __[Shell](https://robinhood.com/stocks/SHEL)__, __[BP](https://robinhood.com/stocks/BP)__, and other oil biggies to ramp up supply and boost refining capacity — which is at its lowest in years. After imposing restrictions on fossil-fuel [development](https://www.reuters.com/business/energy/us-oil-lobby-pushes-biden-roll-back-fossil-fuel-curbs-2022-06-14/), Biden appears to be backtracking from his clean-energy image. It may be necessary:

- __Prices. Are. Wild.__ In the US the average gas price hit $5/gallon, partly because Russia’s war on Ukraine has strained supply. But oil giants also crunched it by cutting production when demand sank mid-pandemic. Spoiler: they haven’t revived supply yet.
- __Profits are gushing,__ oil *isn't*. Profits at BP, Exxon, Shell, and Chevron more than [doubled](https://snacks.robinhood.com/newsletters/7drI8vLSEid0YZLml7w2fH/articles/1AU09CPkzGr6mozVj7Kn3x/) from 2021 last quarter. And oil companies plan to spend billions on buybacks and dividends for shareholders. Biden said the soaring profits are “not acceptable.”

__#PumpAnxiety intensifies…__ High gas and utility bills hurt wallets. They also hurt public support for the president, who’s tried and failed to ease prices (think: [releasing](https://www.cnbc.com/2022/03/31/us-to-release-1-million-barrels-of-oil-per-day-from-reserves-to-help-cut-gas-prices.html) record strategic oil reserves). Now Biden’s shifting the blame to oil companies, but Americans are divided: 

- __Dems__ blame oil corporations for the high prices: some [want](https://www.cnn.com/2022/06/15/politics/joe-biden-oil-companies/index.html) a 21% “windfall” tax on oil profit. 
- __Republicans__ blame Biden and [want](https://www.theguardian.com/us-news/2022/apr/16/public-lands-reopen-oil-gas-drilling-joe-biden-government) to reopen refineries that were closed for polluting.

Where Biden wants oil production to go (Chip Somodevilla/Getty Images)

Slick

__Pump pleas may be symbolic…__ Biden’s approval ratings have tanked ahead of midterms, and gas prices play a huge part in that. It’s unlikely Biden will get approval to impose taxes on oil profits (because: gridlocked Senate). But there may be petroleum-scented relief on the horizon: experts [expect](https://www.bulktransporter.com/news/article/21242526/eia-expects-us-crude-oil-production-to-increase) US oil production to ramp up to pre-pandemic levels by next year.

Biden tells oil giants to stop pumping profits and to start pumping more oil — but he may be talking to voters

__Billion-dollar Lego factory…__ some assembly required. __Lego__ [plans](https://www.washingtonpost.com/business/danish-toymaker-lego-expands-amid-sale-surge/2022/06/15/ee85e6b0-ecbe-11ec-9f90-79df1fb28296_story.html) to drop $1B on its first US factory (in Virginia) as demand for its colorful blocks stacks up in one of its biggest markets. The family-owned Danish toy giant plans to spread the investment over the next decade, creating nearly 2K new American jobs. 

- __Building blocks:__ Construction of the new carbon-neutral factory [begins](https://www.washingtonpost.com/business/danish-toymaker-lego-expands-amid-sale-surge/2022/06/15/ee85e6b0-ecbe-11ec-9f90-79df1fb28296_story.html) this fall, with the digs expected to be operational in 2025.
- __Supply stacks:__ Lego says the factory will help simplify its US supply chain, which has mainly been served by its Mexico factory.

__“Go play with Lego, Elsa”…__ Despite inflation and the no-stimmy era, parents are still [splurging](https://www.npd.com/news/press-releases/2022/the-npd-group-u-s-toy-industry-sales-experience-1-increase-in-the-first-four-months-of-2022/#:~:text=Port%20Washington%2C%20NY%2C%20June%2014,increased%207%25%20during%20the%20period.) on new playthings — an extension of the pandemic toy frenzy. Last year, Lego’s revenue [jumped](https://www.cnbc.com/2022/03/08/lego-revenue-jumped-27percent-in-2021-as-kids-and-adults-continue-to-build.html) 27% to $8B as parents WFH’d with kids. Rivals __[Mattel](https://robinhood.com/stocks/MAT)__ and __[Hasbro](https://robinhood.com/stocks/HAS)__ also saw double-digit growth thanks to demand for iconic franchises like Hot Wheels and Barbie. Now:

- __Brick-flation:__ Lego plans to [hike](https://hypebeast.com/2022/6/lego-sets-25-percent-price-increase-august-announcement-info) prices on some toy sets by up to 25% starting in August and warned its growth boom might slow.
- __Fine print:__ US toy sales ticked up this year after a period of unprecedented growth. But pricier playthings could force parents to trade down or wait for discounts.

Stacked

__Playing wide is a hedge…__ While Mattel and Hasbro have focused on their target customer (kids), Lego has expanded its portfolio to appeal to consumers of all ages. That’s helped it grow faster than rivals. From intricate builds like the “Star Wars” Death Star (4K pieces) to [nostalgic faves](https://www.esquire.com/lifestyle/g34039580/best-lego-sets-for-adults/) like the set of “Seinfeld” and James Bond’s Aston Martin, Lego’s adult offerings could help protect its biz — even if parents ditch kids’ sets.

Lego’s splurgin’ $1B on its first US factory to keep up with toy demand from America’s kids — and adults

Biden urges oil giants to pump fewer profits and more oil as gas prices soar ahead of midterms

YouTube’s TikTok knockoff, dubbed “Shorts,” has 1.5B+ monthly viewers

🛢️ Biden gets pumped up

__Everyone's tuning in at 2 p.m. ET today...__ but not for the NBA Finals or “The Bachelor” finale — it's for Fed Chair Jerome Powell. All eyes are on the Fed's interest-rate hike decision, which could be #spicy. After May's concerning inflation numbers, many on Wall Street are [forecasting](https://www.wsj.com/articles/bad-inflation-reports-raise-odds-of-surprise-0-75-percentage-point-rate-rise-this-week-11655147927) that the central bank will raise rates by three-quarters of a percentage point — something it hasn't done since 1994. Based on Monday's stock plunge and surging [bond yields](https://www.cnbc.com/2022/06/14/us-bonds-10-year-treasury-yield-in-focus-ahead-of-fed-meeting.html), it seems as if investors are also awaiting aggressive price-taming action.

- __A month ago:__ Powell [said](https://www.cnn.com/2022/06/13/investing/federal-reserve-rate-hikes/index.html) his Fed was not "actively considering" raising rates by three-quarters of a percentage point. Fed officials [signaled](https://www.wsj.com/articles/bad-inflation-reports-raise-odds-of-surprise-0-75-percentage-point-rate-rise-this-week-11655147927) they’d bump rates by a half percentage point this week (same as last month) and again in July.
- __But that was *before*__ May's sky-high consumer-price numbers revealed that inflation had not peaked. The Fed has said that its decisions depend on the economy progressing as expected — and #flation rose *faster*-than-anticipated.
- __Now:__ Expectations for a 0.75-point hike have soared from 3% a week ago to [40%](https://www.cnn.com/2022/06/13/investing/federal-reserve-rate-hikes/index.html). But Wall Street's divided: traders are still pricing in a 60% chance of a status-quo half-point hike.

__Cloudy with a chance of flation…__ Consumers’ expectations of long-term inflation have [spiked](https://www.wsj.com/articles/bad-inflation-reports-raise-odds-of-surprise-0-75-percentage-point-rate-rise-this-week-11655147927), with a key survey hitting its highest level since ’08. That’s concerning to the Fed, since inflation *expectations* can make inflation worse (aka: a self-flating prophecy).

Jerome gets ready for his closeup (Mark Wilson/Getty Images)

Feddy

__No one wants an inflation spiral…__ If people expect higher prices, they're more likely to demand higher wages and accept inflated costs. Powell has [said](https://www.nytimes.com/2022/06/02/business/economy/jobs-wages-inflation-powell.html) that this “wage-price spiral” is “a risk we simply can’t run,” since it can be hard to break. The Fed’ll likely respond aggressively to signs that inflation’s spiraling, and investors might even welcome a price-taming power move.

All eyes are on the Fed’s rate-hike decision, which could be more aggressive than anticipated to tame sticky #flation

__Delivering dividends…__ and some packages. __[FedEx](https://robinhood.com/stocks/FDX)__ sales [soared](https://snacks.robinhood.com/newsletters/1hYpHIVc5P8AlsMMvgrYCo/articles/3kklCkbkhfqFOccErMDrNn/) last year as the online shopping boom stuck post-lockdown. But since then shipping volumes have slipped as you buy that bathing suit IRL. Now FedEx faces a double whammy of rising gas and labor costs — plus stiff competition from __[UPS](https://robinhood.com/stocks/UPS)__ and __[Amazon](https://robinhood.com/stocks/AMZN)__. Yesterday, some good news landed on investors’ doorsteps: 

- __FedEx boosted quarterly dividend payouts__ to investors by 50% and added two board members. Shares surged 14% yesterday, their biggest one-day jump in 29 years. 
- __New direction:__ The surge is a sign investors believe FedEx’s new CEO (who started this month) can trim spending and prioritize returns.
- __Case in box:__ FedEx has [accelerated](https://www.marketwatch.com/story/fedex-stock-rallies-on-earnings-beat-outlook-hike-5-billion-share-buyback-plan-11639690138) plans to buy back $5B of shares, and *decelerated* plans to upgrade its fleet.

__Squeeze-onomics…__ FedEx started cost-slashing early this year to boost margins. It cut spending on customer perks (think: [fewer](https://bestlifeonline.com/fedex-change-deliveries-news/) package-tracking options) and trimmed labor costs (think: slower hiring) — months before companies started doing involuntary layoffs. But cost-cutting wasn’t the end of the profit push: FedEx also boosted earnings by charging customers extra during busy times and bumped its fuel surcharge for all services.

Squeeze

__Cost-cutting is a double-edged sword…__ Done cleverly, it can make investors happy, but done too aggressively, it can frustrate customers and burden workers. FedEx’s slow-and-steady approach could help it satisfy investors during the market downturn while protecting its biz. But if companies cut too much too fast, they could have a hard time switching from “squeeze mode” back to “growth mode” when prices normalize.

FedEx shares jump the most in decades after a dividend boost and a cost “squeeze”

The Fed's rate decision today could signal how aggressive it'll be to tame prices (and avoid a spiral)

Americans owe $22B in late utility bills as soaring energy prices make electricity and A/C harder to afford

⬆️ The Fed’s big decision

__McDowell’s vibes…__ but this isn’t a “Coming to America” tale of Big Macs vs. Big Micks. Former __[McDonald’s](https://robinhood.com/stocks/MCD)__ locations in Russia are [reopening](https://www.reuters.com/world/europe/mcdonalds-russia-reopens-under-new-ownership-renamed-vkusno-tochka-2022-06-12/) under different owners — with the same ketchup packets. Quick refresher: McDonald’s [closed](https://snacks.robinhood.com/newsletters/5vfIOlOV4U5lL9HBIaeiOu/articles/xduVS4tKoldDPPu0KAPLB/) its 840 Russian restaurants in May in response to Russia’s war on Ukraine, and later sold them to a Siberian oil mogul. Last weekend, after a quick-and-dirty rebrand, they began reopening: 

- __15 ex-McD’s opened in Moscow.__ New name: "Tasty & That's It.” The other 800+ are expected to reopen by summer’s end.
- __Scrap the McBranding:__ The restaurants sell burgers and fries, but workers reportedly scribbled out McD’s logos on old ketchup packets to avoid violating trademarks.

__The Calorie Curtain has some holes…__ American food behemoths like McDonald’s and __[Starbucks](https://robinhood.com/stocks/SBUX)__ stopped selling Big Macs and Venti Lattes in Russia months ago (the #[CalorieCurtain](https://snacks.robinhood.com/newsletters/5vfIOlOV4U5lL9HBIaeiOu/articles/xduVS4tKoldDPPu0KAPLB/)), joining Western [peers](https://snacks.robinhood.com/newsletters/26ExOA8voyJw5UxqnvZgrl/) like __[Disney](https://robinhood.com/stocks/DIS)__, __[Apple](https://robinhood.com/stocks/AAPL)__, and [Shell](https://robinhood.com/stocks/SHEL). But Russia’s economy hasn’t been crushed by the corporate exodus:

- __Russian shelves have stayed stocked__ thanks to Putin’s efforts to reduce reliance on trade. Case in point: Tasty & That’s It gets 98% of ingredients from Russia. 
- __Russia’s ruble recovered__ from an early crash thanks to aggressive central-bank policy, and manufacturing’s on the rebound too.
- __But DIY’s hard:__ Russia is now manufacturing cars without airbags since auto partner __Renault__ exited, and many juice boxes might be white soon since ink imports dried up.

Not the Golden Arches (Kirill Kudryavtsev/AFP via Getty Images)

Tasty

__A knockoff economy is emerging…__ but it’s easier to replace burgers than computer chips. Corporate departures and sanctions haven’t caused Russia’s economy to shut down. Yet they’re forcing Russia to rebuild itself with fewer trade partners and many missing pieces. Long term, sanctions could have a more dire effect: Putin still hasn’t found replacements for key components, like microchips, and Europe’s looming oil ban will likely hit Russia’s coffers.

Rebranded McDonald’s locations reopen in Russia, as a knockoff economy emerges to adapt to sanctions

__Extra-rough Monday…__ __[Bitcoin](https://robinhood.com/crypto/BTC)__ dropped below $24K for the first time [since](https://www.coindesk.com/markets/2022/06/13/bitcoin-plunges-below-25k-lowest-level-since-december-2020/) 2020 yesterday, sending ripples through the industry. __Celsius__, one of the biggest crypto lenders, halted transactions for its [nearly](https://celsius.network/) 2M customers, citing “extreme market conditions.” Celsius manages ~$12B in assets, and it’s TBD when (and if) customers will get their $$ back. 

- __Status quo:__ Users deposit crypto into Celsius with the promise of earning up to 18% in interest payouts. Celsius then reinvests the assets into crypto-related projects (like: crypto-[mining](https://www.barrons.com/articles/celsius-mining-to-go-public-51652736901)). 
- __Problem quo:__ The value of Celsius' holdings has plunged along with crypto prices. Yesterday, crypto market cap dipped below $1T for the first time since January ’21. Now analysts think Celsius could run out of funds within [five](https://www.barrons.com/articles/bitcoin-crypto-bank-celsius-market-51655135690) weeks.
- Even if it can repay customers, it would have to pull its money from other crypto investments — which could affect the entire market.

__Moving like the market…__ Some thought crypto could be a hedge against inflation and stock-market moves. That hasn’t panned out so far this year. While stocks tumbled, the crypto market lost $200B in value over the past week — and *$2T+* in the past eight months. Celsius isn’t the only crypto company feeling the heat: 

- __In the past month,__ crypto lender __BlockFi__ and exchanges like __Crypto.com__, __[Coinbase](https://robinhood.com/stocks/COIN)__, and __Gemini__ have cut headcount.
- __Binance,__ the world's largest crypto exchange, temporarily [halted](https://www.forbes.com/sites/rosemariemiller/2022/06/13/binance-and-celsius-native-tokens-are-in-freefall-after-freezing-customer-withdrawals/?sh=5fc0459f73da) bitcoin withdrawals (it blamed technical reasons).

Coined

__Crypto’s getting a reality check…__ It’s not just prices: from __Stablegains__ to the __Anchor Protocol__, promises of big returns have lured investors to the high-flying world of crypto lending. But some of those investments have crashed and burned. Celsius’ freeze puts the spotlight on lawmakers and regulators, who could face more pressure to step in. Meanwhile, a [bipartisan bill](https://www.reuters.com/markets/us/us-senators-unveil-bill-regulate-cryptocurrency-2022-06-07/) to regulate digital assets is already in the works.

Crypto lender Celsius pauses withdrawals on billions’ worth of customer assets as coins plunge, turning up the regulatory heat

Rebranded McDonald’s locations reopen in Russia as a knockoff economy emerges

The world’s shortest commercial flight, connecting two islands near Scotland, lasts less than a minute

🍟 Russia’s McRebrand

__So many Tok clones...__ No one’s safe from vertical videos. US social giants have desperately tried to replicate the success of __TikTok__, the short-video app that’s captured Gen Z's consciousness (call it "GenT"). One of the biggest threats to __[Meta](https://robinhood.com/stocks/META)__, __[Google](https://robinhood.com/stocks/GOOGL)__, __[Snap](https://robinhood.com/stocks/SNAP)__, and __[Twitter](https://robinhood.com/stocks/TWTR)__ isn't slowing social usership in general — it’s slowing usership *because* of TikTok.

- __44 mins/day:__ Last year people spent more time on TikTok than on Facebook. The Tok may’ve even [surpassed](https://www.businessinsider.com/tiktok-fastest-growing-social-media-company-2022-5#:~:text=TikTok%20shot%20past%20Facebook's%20time,in%20the%20US%20this%20year.) time spent on Insta and YouTube worldwide.
- __1.6B brains:__ TikTok has more monthly users than Twitter, Snap, and LinkedIn *combined*.
- __The news:__ TikTok just [added](https://www.theguardian.com/technology/2022/jun/09/tiktok-addicts-to-benefit-from-in-app-screen-time-controls) new screentime controls to make its app seem less intensely addictive (think: break reminders).
- __The reality:__ It likely won't help. The app’s already shortened kids’ attention spans to where many [can't](https://www.wsj.com/articles/tiktok-brain-explained-why-some-kids-seem-hooked-on-social-video-feeds-11648866192?page=4) even sit through a movie or a class.

__Dancing to the (algo)rhythm...__ To curate your feed, TikTok's mysterious algorithm figures out what engages you. And while that’s mostly lip-syncs, cat pranks, and makeup hacks, there's a dark side to TikTok, which is owned by Chinese tech giant __ByteDance__ — which China’s gov’t owns a [stake](https://gamerant.com/tiktok-chinese-government-acquires-bytedance-stake/#:~:text=The%20Chinese%20government%20now%20controls,internet's%20most%20visited%20website%20domain.) in.

- __Dangerous content:__ In addition to life-threatening viral challenges (like holding your breath until you faint or OD'ing on Benadryl), TikTok's algo has sent teens down [rabbit holes](https://www.wsj.com/articles/how-tiktok-inundates-teens-with-eating-disorder-videos-11639754848?utm_content=article-8131&utm_source=sg&utm_medium=email&utm_campaign=article_email) promoting eating disorders, [porn sites](https://www.wsj.com/articles/tiktok-algorithm-sex-drugs-minors-11631052944), and [gun violence](https://www.youtube.com/watch?v=ZAFdcvMvfhQ).
- __Misinfo:__ Many get their news on TikTok, but no one really knows how info (and misinfo) spreads there. Recently TikTok’s been [flooded](https://www.nytimes.com/2022/05/08/opinion/tiktok-twitter-china-bytedance.html) with videos pushing Russia's narrative on the Ukraine war — which China [supports](https://www.newsweek.com/us-alarmed-chinas-support-putins-war-ukraine-1710516).
- __Censorship:__ TikTok has [cracked down](https://www.theguardian.com/technology/2019/sep/25/revealed-how-tiktok-censors-videos-that-do-not-please-beijing) on topics at China’s behest (think: the [Uyghur crisis](https://www.businessinsider.com/tiktok-censor-china-critical-content-uighur-uighurs-2020-11)). Any interference from the Chinese government could wreak havoc on US elections and an already divided American democracy.

Down the rabbit hole (ArtistGNDphotography/E+ via GettyImages)

Toked

__Attention = influence…__ We’re not talking fitness gurus. Commanding attention means directing attention, and TikTok’s captured the mind of a generation. The concern of the (now dead) [Tik Tok-ban saga](https://snacks.robinhood.com/newsletters/4g29GVFWqYg9Au3nZOuWMT/articles/6FuurH1NYVCmbP9wjwzAme/) was that ByteDance could pass US data to China. But the real concern is likely TikTok’s influence to direct attention, and the obscurity around who’s really pulling the strings.

TikTok’s time bomb: how the app wields massive influence on America’s attention — and potentially its direction

__Gun giants in the spotlight…__ As US gun violence soars, weapons makers are being [sued](https://www.theguardian.com/us-news/2022/jun/07/gun-crime-victims-lawsuits-firearms-industry) more frequently. Families of Sandy Hook victims settled with __Remington__ for $73M earlier this year, and __Glock__ was recently sued over irresponsible marketing. Victims are [using](https://www.theguardian.com/us-news/2022/jun/07/gun-crime-victims-lawsuits-firearms-industry) a strategy that won settlements from tobacco giant [Philip Morris](https://robinhood.com/stocks/PM) and opioid maker __Purdue Pharma__. Meanwhile, Congress is debating bills that would make it harder to buy guns (including [raising](https://www.cnbc.com/2022/06/08/uvalde-school-shooting-us-house-votes-to-raise-age-to-buy-an-assault-rifle-to-21.html) the minimum purchase age), which could hit gun makers’ sales, though they’re unlikely to pass.

__BYOP...__ Bring your own peanuts. __[Spirit’s](https://robinhood.com/stocks/SAVE)__ takeover drama appears to be approaching its climax. Shareholders have 17 days to decide whether the budget carrier’s new home will be with __[Frontier](https://robinhood.com/stocks/ULCC)__ or [JetBlue](https://robinhood.com/stocks/JBLU) (or neither). Last week JB doubled the fee it would pay Spirit shareholders if the deal falls through for antitrust reasons — topping Frontier’s $250M offer by $100M. A pilot shortage and high fuel costs are making it harder for airlines to meet demand. A Spirit-quisition would give the new mega-carrier more seats, routes, and workers.

Zoom Out

Stories we’re watching...

__Corporate’s got work to do…__ Monday’ll be the first time markets close for Juneteenth, the new federal holiday celebrating the end of US slavery. After George Floyd’s murder two years ago, 271 corporations [pledged](https://www.ft.com/content/f29449c1-aa80-40b3-9794-5b02bb557019) $67B to improve racial equity — but less than $1B had been distributed by the start of ’22. __[Procter & Gamble](https://robinhood.com/stocks/PG)__, __Sephora__, and others have fallen [short](https://www.marketplace.org/2021/05/24/a-year-later-how-are-corporations-doing-on-promises-they-made-to-fight-for-racial-justice/) of their targets to hire more Black workers and partner with more Black-owned brands. But others, like __[Yelp](https://robinhood.com/stocks/YELP)__ and __[Microsoft](https://robinhood.com/stocks/MSFT)__, hit their year-one goals of teaming up with Black-owned businesses.

__The view from above...__ not talking penthouses. Satellite imagery is a hot commodity as companies and governments track everything from [crop](https://www.planet.com/markets/monitoring-for-precision-agriculture/) growth to shipping patterns (because: supply crisis). __[Planet Labs](https://robinhood.com/stocks/PL)__, the largest owner of low Earth orbit satellites (LEOS), saw its revenue surge to a record $37M last quarter. (We’ll see its latest numbers when it reports Tuesday.) While Planet is worth just $1B, growing demand for satellite imagery and internet (think: __SpaceX’s__ StarLink) could help the LEO sector grow in the next decade.

Events

Coming up this week...

- __[Fruit](https://snacks.robinhood.com/newsletters/1JKK93bHIpBW2K7HPn5R8r/articles/3bFhOG8cc45ZuIerRaunN6/):__ It’s getting harder to leave __[Apple’s](https://robinhood.com/stocks/AAPL)__ “walled garden”: it rolled out a buy now, pay later service and password authenticator at its annual conference, threatening companies like __[Affirm](https://robinhood.com/stocks/AFRM)__ and __LastPass__.
- __[Cluck](https://snacks.robinhood.com/newsletters/1g5IRGKGswG3edfaiJ1Ut2/articles/5OiE2KKWgGgiKAbl8Z0tXK/):__ Chicken prices have gone berserk after a combo of disasters, with boneless breast up *68%*). While Americans are still splurging on the #1 meat, some countries are being forced to cut back.
- __[Hole](https://snacks.robinhood.com/newsletters/2n1tfbP2sL0dLHd6d2tSbw/articles/2GU5O3zeoGJuW6L7ddBK6e/):__ The __PGA__ suspended 17 golfers, including Phil Mickelson, for competing in the Saudi-funded __LIV__ tournament. Some accused the country of using golf to boost its image, given its dismal human-rights record.

ICYMI

Last week's highlights...

TikTok wields massive influence on America’s attention — and potentially its direction

Someone pretending to be a juror in the Depp v. Heard trial went viral on TikTok for his case “insights,” getting 2M+ views

👀 TikTok’s takeover

__Golfers, scratched…__ A huge controversy just teed off in pro golf. Yesterday the __PGA Tour__ [suspended](https://www.cnbc.com/2022/06/09/pga-suspends-phil-mickelson-others-for-involvement-in-saudi-backed-liv-event.html) 17 golfers, including major champs Phil Mickelson and Dustin Johnson, for competing in rival __LIV Golf’s__ first tournament (now underway in London). The PGA also told remaining members they’d get booted if they left, driving a sand wedge between the sport’s most bankable stars:

- __Out of the club:__ LIV [paid](https://www.cnbc.com/2022/06/09/pga-suspends-phil-mickelson-others-for-involvement-in-saudi-backed-liv-event.html) Mickelson and Johnson (the second- and third-highest earning PGA golfers ever) $200M and $125M, respectively, to join. That’s more than top-earning Tiger Woods has made playing golf in his *career*. 
- __Loyalists:__ Tiger reportedly declined a nearly *$1B* offer to join LIV, while top pros Rory McIlroy and reigning PGA champ Justin Thomas have committed to stay with the PGA.

__Money talks…__ Saudi Arabia’s government funded the LIV with $400M, which led to accusations that the country is “sportswashing,” or using golf to boost its global image, despite a dismal human-rights record. With that kind of cash in play, the nonprofit PGA Tour could have trouble competing:

- __Bigger prizes:__ LIV’s offering more prize money than the PGA Championship (which happens once a year) for each of its 10 scheduled tourneys this year. 
- __Guaranteed payouts:__ Unlike PGA tournaments, where dozens of golfers return home empty-handed, every LIV golfer gets prize $$.

Who said golf was boring? (Steven Paston/PA Images via Getty Images)

Bogey

__You can’t just buy superstars…__ You also need buy-in from their fans. Unlike other upstart sports leagues (think: the __XFL__), LIV has essentially bottomless financial resources. But so far it’s spending more cash on golfers than fans: the only places to watch Mickelson tee off today is online, since LIV hasn’t found a TV network partner yet. If LIV doesn’t make it easier for fans to follow, it could fail, despite its huge pile of cash and long list of stars.

The PGA Tour tees off against its new Saudi-funded rival by suspending top golfers, and throwing the game into chaos

__“Call of Duty” tourney…__ from the cloud. Gamers will soon be able to play __[Microsoft's](https://robinhood.com/stocks/MSFT)__ hottest console games *without* the console. Later this month, video-game lovers in 27 countries can play hits like “Halo” and “Minecraft” through Microsoft’s new Xbox smart-TV app. Samsung's newest line of connected TVs will be the first to offer the app, with other TV makers to follow.

- __The setup:__ easy. Users only need a “Game Pass” membership and a certain controller to connect and play.
- __The pay-off:__ Microsoft wants to focus on gaming efforts that allow them to “deliver Xbox Cloud Gaming to more players” worldwide.

__Sold out everywhere...__ Xbox sales are trailing rivals like __[Sony’s](https://robinhood.com/stocks/SONY)__ PS5 and __[Nintendo’s](https://robinhood.com/stocks/NTDOY)__ Switch, despite Microsoft’s growing share of the gaming-console pie. Last year Xbox sales jumped 92% from 2020, on the back of its new Series X model release. The problem: supply-chain snags have made it harder (and more expensive) to buy nearly any popular gaming console. Now Microsoft’s betting its extensive video-game library (cue: [$70B](https://snacks.robinhood.com/newsletters/4eOJialeY3vTs2AHV0FkZt/articles/5Tuqimhcf73WVRvJ5YTv5C/) Activision acquisition) will attract players with or without the hardware.

__Ready, player one:__ In 2019 __[Google](https://robinhood.com/stocks/GOOGL)__ tried to enter the cloud-gaming market with its Stadia streaming service, but a lack of well-known [content](https://www.lifewire.com/why-google-stadia-failed-to-load-5104780) has made it a commercial flop and its multiplayer games a virtual desert.

Play

__Don’t count out cloud gaming just yet…__ Microsoft’s spending a record $69B for Activision because it knows the power of popular titles. If it can convince hardcore gamers that “Call of Duty” plays as well on the cloud as it does on a console, the Xbox’s days could be numbered. Not that Microsoft would necessarily mind: last year [execs](https://hypebeast.com/2021/5/microsoft-xbox-consoles-dont-make-profit-response) said that all Xboxes are sold at a loss.

Microsoft will let gamers stream without a console, raising questions about the future of Xbox

The PGA Tour tees off against a new Saudi-funded rival by suspending top golfers

The average price of a gallon of gas in the US is now $5

🏌️ Golf feud

__Things just got really real…__ Yet another CEO has stepped down to help their company step up: this week Julie Wainwright, founder of luxury resale marketplace __[The RealReal](https://robinhood.com/stocks/REAL)__, unexpectedly [resigned](https://www.retaildive.com/news/the-realreal-founder-ceo-resigns/625017/). Wainwright said she’s leaving on good terms so that TRR can find its “next generation” of leaders to achieve profitability. Her replacement faces a tough challenge:

- __Real struggles:__ Last quarter TRR [reported](https://investor.therealreal.com/static-files/c25a20aa-bb70-4aa3-b83c-677328b471b7) a bigger loss than during the same period last year. TRR’s stock has also suffered: shares are down about 90% since its 2019 IPO.

__Out with the new, in with the seasoned...__ Fast-growing tech companies, which dominated the stock market for a decade, are now [underperforming](https://www.wsj.com/articles/techs-decade-of-stock-market-dominance-ends-for-now-11654650890?mod=business_minor_pos7) the overall market by the widest margin since 2000 (aka: the dot-com bubble). With growth stalled at many techies, founders are turning to corporate execs who have experience generating cash flow:

- __Freshening up:__ Makeup and skincare dynamo __Glossier__ recently [replaced](https://www.nytimes.com/2022/05/26/style/glossier-emily-weiss.html) its founding CEO with a long-time __[Nike](https://robinhood.com/stocks/NKE)__ exec. Glossier went through a round of layoffs earlier this year as sales slumped.
- __Industry veterans > visionary founders:__ Profitable startups like supply-chain-software company __Flexport__ are turning to veterans for help. Yesterday, the logistics biz [announced](https://twitter.com/typesfast/status/1534537016506867714) plans to replace its founding CEO with a long-time __[Amazon](https://robinhood.com/stocks/AMZN)__ operations exec.

The RealReal’s founder heads for the exit (Michael Kovac/Getty Images for Vanity Fair)

Consign

__Growing up can be hard…__ and sometimes the best thing founders can do for their companies is to fire themselves. CEOs of public firms — and even midsize startups with dreams of an IPO — are responsible for maximizing profits. But the skills required to run a profitable public company aren’t always the same as the skills needed to launch a successful startup.

Founders are showing themselves the door, handing the reins to corporate vets in hopes of a pivot from growth to profitability

__Savoring the last Buffalo wing...__ because chicken prices have flown the coop. The latest poultry headline: private-equity firm __Atlas__ is taking over __Foster Farms__, America's 10th largest chicken producer with $3B in annual sales (you've probably seen its ground meat at grocery stores). Atlas will install the ex-CEO of nugget giant __[Tyson](https://robinhood.com/stocks/TSN)__ to lead Foster. The deal comes as US chicken prices have surged, up a #flated 16% in April from a year before.

__No one's a winner...__ with this chicken dinner. Chicken is the world's most popular meat by far, followed by pork and beef. But a series of events have combined to send chicken prices soaring — and worker shortages are just the tip of the iceberg.

- __An avian flu__ has spread through major producing regions, wiping out 38M chickens in the US alone — where the price of boneless skinless breast is up *68%* this year.
- __A dire drought__ and Russia's war on Ukraine have strained global grain supplies (think: corn, wheat) and ballooned prices, making it hard to feed and fatten the birds.
- __Pork-pocalypse:__ Price-sensitive consumers might swap chicken for cheaper pork, but now an African swine fever is sweeping through global pig herds.

Nuggies

__Some markets are less price sensitive...__ when it comes to nutritional staples. In the US and other wealthy countries, where food represents ~1/10th of household spending, chicken demand has held steady from consumers and restaurants (think: fried-chicken-sandwich frenzy) — that’s a positive for the poultry industry. But in developing countries, where food typically accounts for a third of budgets, people are starting to have to cut out meat altogether, and some are at risk of undernourishment if they can’t swap for more affordable proteins.

Chicken prices have gone berserk on an unfortunate combo of disasters — but Americans are still splurging on the #1 meat

Founders hand the reins to corporate vets in hopes of a pivot from growth to profitability

There are more ways to arrange a deck of cards than there are atoms on Earth

🚪 Founders see themselves out

__The [Apple](https://robinhood.com/stocks/AAPL)-verse is already here…__ even if the iHeadset isn’t. Tim Cook did not unveil a mixed-reality headset at Apple’s annual developer conference this week, as some had been hoping. But he did [launch](https://www.wsj.com/articles/apple-is-set-to-return-software-to-forefront-at-annual-developer-conference-11654451208?mod=business_lead_pos6) several features that’ll make Apple’s devices even more central to consumers’ actual reality:

- __All the upgrades:__ iPhone, Mac, Watch, and iPad are all getting software updates. Highlights include editable iMessages and a biometric-authentication tool dubbed “Passkeys.” 
- __BNPL, meet APL:__ A service called Apple Pay Later lets users pay for things in four interest-free installments spread over six weeks.
- __Apple Car teaser:__ Apple’s teamed up with Ford and Honda to expand its CarPlay integration. Think: cars with Apple dashboard widgets that control A/C and radio.

__An OS for everything…__ Increasingly the iPhone’s becoming a hardware portal to Apple’s expanding suite of services. Though the iPhone’s still Apple’s most profitable biz line, sales of services (think: iCloud, Apple Card, TV+) are growing much faster. This year Apple’s services revenue is expected to hit $80B+ (more than Mac and iPad sales combined). Some of the features announced this week compete with entire business sectors:

- iChallenger: Apple Pay Later challenges buy now, pay later giants like __[Affirm](https://robinhood.com/stocks/AFRM)__, while Passkeys threaten startups like __LastPass__. Apple has a unique ability to pose an instant threat to big companies and startups alike, thanks to its base of nearly 2B active devices.

Apple tends to its walled garden (Tayfun CoÅkun/Anadolu Agency via Getty Images)

__Apple wants you to buy now, pay forever…__ New Apple services don’t just threaten competitors — they also make it harder for consumers to ditch Apple products. If you rely on the Apple ecosystem to stay in touch with friends (iMessage), make big purchases (Apple Pay Later), and drive your car (CarPlay), you’re more likely to keep buying Apple devices for life.

Apple rolls out CarPlay and Pay Later features as its walled garden gets harder to escape

__Techier than an Apple store...__ Taco Bell's newest outpost [looks](https://www.businessinsider.com/taco-bell-opens-four-lane-two-story-drive-thru-photos-2022-6) like a server rack, but the chips inside are edible. The Crunchwrap Supreme icon just [opened](https://www.cnn.com/2022/06/07/business-food/taco-bell-defy-drive-thru/index.html) a restaurant concept called "Taco Bell Defy" outside Minneapolis. The table-free location features tablets, QR codes, and “vertical lifts.”

- __2 stories:__ All the meal prep happens out of sight on the second floor, where employees stick your Gordita Crunch in a “Jetsons”-like glass elevator that delivers it down to you.
- __4 lanes:__ Three drive-thru lanes are dedicated to delivery drivers and app orders. But even the traditional lane is techified with two-way video for OG ordering.
- __2 minutes:__ Defy is designed to deliver your grub in 120 seconds or less — among the fastest times in the industry, and less than half the time of an average Bell order.
- __Zero gravity?...__ TB says its contactless delivery system "defies gravity" as food is transported down to ground level. (How that defies gravity defies our understanding of gravity.)

__Less fry cook, more Tim Cook...__ fast-food’s new mantra. Digital orders and drive-thrus surged for chains like __[Chipotle](https://robinhood.com/stocks/CMG)__, __[McD's](https://robinhood.com/stocks/MCD)__, and __[Starbucks](https://robinhood.com/stocks/SBUX)__. Taco Bell parent __[Yum Brands](https://robinhood.com/stocks/YUM)__ (which also owns KFC and Pizza Hut) saw its digital sales grow 15% last quarter to a record $6B. With Defy, it’ll be able to handle twice the order volume of a typical Taco Bell.

__Driver’s seat > booth:__ Pre-pandemic, less than [70%](https://www.qsrmagazine.com/reports/future-fast-food-drive-thru-arrives-early) of fast-food sales came from drive-thrus. Now it’s more than 90%, even though IRL dining is back.

Gravity

__Form follows function...__ and the function of quick-serve restaurants has shifted. Consumers have changed the way they order food; now restaurants are transforming the way they *serve* food. Cue: more “Defy” locations getting [planned](https://www.axios.com/local/twin-cities/2022/06/07/minnesota-taco-bell-of-the-future). As chains ditch dining rooms for faster food, vertical lifts and [Chipotlanes](https://www.qsrmagazine.com/fast-casual/inside-rise-game-changing-chipotlane) could be the future.

Taco Bell opens a futuristic restaurant (feat. taco elevators) as fast-food chains transform for the digi-order revolution

The “Hollywood” sign in Los Angeles was created as a real-estate advertisement — and once read “Hollywoodland”

🍎 Apple’s next frontier

__Well, this is awkward…__ Elon’s stint as __[Twitter’s](https://robinhood.com/stocks/TWTR)__ new would-be owner could end before it begins. The Technoking’s [threatening](https://www.nytimes.com/2022/06/06/business/elon-musk-twitter.html) to back out of his $44B deal to buy the social-media company if it doesn’t give him more detailed data about how many of its users are bots. But Twitter’s standing pat, saying it plans to “enforce” the merger as is. 

- __Still on hold:__ Last month Elon [said](https://www.cnn.com/2022/05/13/tech/twitter-deal-on-hold-elon-musk/index.html#:~:text=Elon%20Musk%20said%20he%20is,%2C%E2%80%9D%20Musk%20tweeted%20on%20Friday.) the (legally binding) deal is on “hold” until Twitter proves its claim that fewer than 5% of daily users are bots. 
- __Thwarts and all:__ In yesterday’s letter to the SEC, Elon’s lawyers said Twitter broke the deal first by “thwarting” Elon’s right to info, which they say gives him the right to bail. 

__Bots are getting all the blame…__ but they’re just part of the story. Twitter *really does* have a bot problem: experts [estimate](https://www.bloomberg.com/news/articles/2022-06-06/musk-says-twitter-s-lack-of-info-on-bots-breeches-merger-deal) 10% of users are fake. But Elon has another big reason to back out of the deal: the price.

- __Clipped wings:__ Twitter’s stock has fallen 23% since the takeover was signed, which means Elon’s on the hook for $14B more than the company’s current market value. Analysts suspect his real goal is to pressure Twitter into renegotiating at a lower price.

And I think it’s gonna be Elon, ’Lon time  (Theo Wargo/WireImage/Getty Images)

Birdcage

__The law is on Twitter’s side…__ but *time* may be on Elon's side, if he’s willing to sit through a lawsuit. M&A experts say Elon has little legal ground to stand on, since he waived his right to inspect Twitter’s finances *and* signed a contract that forces him to follow through. Yet if Elon takes it to court, Twitter could get stuck in a pricey, drawn-out lawsuit that scares off employees, users, and investors. Twitter might decide to sell at a discount to avoid a legal battle with the world’s richest meme-lord.

Elon’s threatening to ditch his Twitter deal: it might be about buyer’s remorse, not bots

__Hit ’em with a DPA...__ President Biden is shining light on the solar industry with his latest executive actions. The White House has [authorized](https://www.cnn.com/2022/06/06/politics/biden-executive-action-solar-clean-energy-development/index.html) the Defense Production Act to rev up US manufacturing of solar panels and other clean-energy components. Refresher: the DPA lets presidents order companies to produce critical things in short supply (think: masks, baby formula). In this case, it’s energy: oil and gas supplies have been strained since Russia's invasion of Ukraine, so boosting renewables might help.

- __The White House also announced__ a two-year suspension of tariffs on solar panels imported from Cambodia, Malaysia, Thailand, and Vietnam — which together supply ~80% of America's solar products.
- __Why those tariffs were sweat-inducing:__ An ongoing federal investigation into whether those countries are using materials from China has stalled much of the US solar industry, which is worried about having to pay hefty retroactive tariffs. Hundreds of US solar projects have been scrapped since the probe began in March.

__Just add "sun"...__ Solar stocks like __[Sunrun](https://robinhood.com/stocks/RUN)__, __[SunPower](https://robinhood.com/stocks/SPWR)__, __[SolarEdge](https://robinhood.com/stocks/SEDG)__, and __[Enphase Energy](https://robinhood.com/stocks/ENPH)__ [spiked](https://www.cnbc.com/2022/06/06/solar-stocks-jump-after-report-that-biden-administration-will-suspend-tariffs.html) yesterday as investors welcomed the tariff suspension, which the solar industry had been lobbying for. But not everyone’s thrilled: US manufacturer First Solar and others that *weren't* directly threatened by the investigation said the suspension was a loss for American manufacturing. First Solar sank 4%.

Heated

__Solar needs an energy injection…__ After Biden got elected, there was optimism that the Dems would incentivize federal and private solar spending. That sunny vision died last year when Biden’s Build Back Better bill, which [featured](https://snacks.robinhood.com/newsletters/6j2M9rRr7dWfX9iVqkya8A/articles/1Kmj7ETjLUMKRDf8Mof4pD/) $500B+ in climate-related spending, stalled in Congress. Fewer than 5% of US homes use solar energy, and installation prices have [risen](https://www.solarpowerworldonline.com/2021/12/latest-research-shows-1-out-of-every-600-homes-in-america-is-installing-solar-panels-each-quarter/) as trade policies caused uncertainty and supply constraints. Cutting tariffs is a roundabout way to revive renewables.

Biden moves to boost solar-panel production during an industry slowdown, but the outlook for his larger clean-energy plan isn’t sunny

Of all the living mammals on Earth — including humans — about 60% are livestock

🐦 Elon threatens to walk

__More hyped than “Stranger Things”...__ at least by economists. Friday's monthly jobs report, aka: America's “Labor 101” report card, came at a critical time for the economy. The results: the booming job market cooled slightly in May. Key word: *slightly*.

- __Job growth__ was stronger than expected, but eased. The US [added](https://www.cnbc.com/2022/06/03/jobs-report-may-2022-.html) 390K payrolls, the lowest since April 2021. Usually this number is enough to indicate the labor market's health. This time, not so much, since the problem [isn’t](https://www.nytimes.com/2022/06/02/business/economy/jobs-wages-inflation-powell.html) demand for workers — it’s *supply*.
- __Labor-force participation,__ perhaps more telling, nudged up to 62.3% — a sign Americans are slowly returning to work. Even though job openings dropped by 455K in April, there’s still 5M+ more open roles than available workers. 
- __Wage growth__ ticked down, rising 5.2% from a year earlier but still twice the rate that earnings were rising pre-pandemic, as companies bump pay to compete.

__A tale of two markets...__ Unemployment stayed at a pandemic low of 3.6%, and rebounding sectors like hospitality can't hire fast enough. The paradox: sectors that thrived mid-pandemic are slowing hiring and cutting jobs to shave costs.

- __We're hiring:__ Airlines, restaurants, hotels, and retailers are scrambling to boost headcount to meet demand — and have [cut](https://www.cnbc.com/2022/04/10/jetblue-is-cutting-its-summer-schedule-to-avoid-further-flight-disruptions.html) growth plans because they *can’t*. __[American Airlines](https://robinhood.com/stocks/AAL)__ has hired 16K employees this year and is *still* struggling to fill positions. Small businesses have been forced to [slash](https://www.businessinsider.com/labor-shortage-small-businesses-cutting-opening-hours-losing-revenues-employment-2021-10) hours and services. 
- __We're un-hiring:__ As inflation and slowing demand hit tech profits, __[Peloton](https://robinhood.com/stocks/PTON)__, __[Netflix](https://robinhood.com/stocks/NFLX)__, __[Carvana](https://robinhood.com/stocks/CVNA)__, and others have laid off workers (__[Tesla](https://robinhood.com/stocks/TSLA)__ [reportedly](https://www.reuters.com/technology/exclusive-musk-says-tesla-needs-cut-staff-by-10-pauses-all-hiring-2022-06-03/) plans to as well). Meanwhile: __[Microsoft](https://robinhood.com/stocks/MSFT)__, __[Meta](https://robinhood.com/stocks/FB)__, __[Salesforce](https://robinhood.com/stocks/CRM)__, __[Twitter](https://robinhood.com/stocks/TWTR)__, __[Uber](https://robinhood.com/stocks/UBER)__, __[Wayfair](https://robinhood.com/stocks/W)__, and __[Snap](https://robinhood.com/stocks/SNAP)__ say they’ll rein in hiring.

The job market diverges (Joe Raedle/Getty Images)

Wanted

__A slowdown could be good…__ if done right. While rising wage growth is usually positive, at the current pace it’s [nearly impossible](https://www.nytimes.com/2022/06/02/business/economy/jobs-wages-inflation-powell.html) to tame inflation (aka: econ enemy #1). Wages and purchasing power are actually falling when adjusted for inflation — read: not keeping up with rising prices. The Fed’s big challenge: cool the labor market *without* undoing the progress made during the rebound. But it could be hard to distinguish between a healthy cooling and a [recession](https://learn.robinhood.com/articles/53OOO3JQFf0Sqo5g0t4O5F/what-is-a-recession/) — which experts [see](https://www.washingtonpost.com/business/2022/05/19/recession-economy-markets/) as increasingly likely.

The May jobs report reveals a super-tight labor market for boomerang companies and a slowing one for others — and that might not be bad

__Open for biz…__ China’s biggest city is opening back up after strict Covid lockdowns rattled residents and global supply chains. Last week Shanghai officials lifted restrictions for most people after two months of isolation. Now Shanghai's main port (aka the world's [largest](https://www.shipafreight.com/knowledge-series/largest-ports-in-the-world/#:~:text=1.,Port%20Of%20Shanghai%2C%20China&text=Shanghai%20has%20been%20the%20largest,million%20tonnes%20of%20cargo%20annually.)) is working through thousands of backlogged containers chock-full of everything from diapers to dishwashers. With 26M residents returning to daily routines, oil demand could spike, translating to even higher pump prices worldwide.

__Tightening time…__ The Fed’s busting out a new-ish tool in the inflation fight. Early in the pandemic, the US’s central bank used quantitative easing (QE) — aka “printing money” — to stimulate the economy. Now it’s [switching to](https://www.thestreet.com/dictionary/q/quantitative-tightening) quantitative tightening (QT), basically destroying the $$ it printed by letting bonds and other securities it purchased mature, which reduces its cash balance and the money supply. There’s a risk the Fed could tighten too quickly (it’s [selling](https://www.investopedia.com/quantitative-tightening-is-here-5270749) 10X faster than its last QT in 2017), which might mean more volatility for stocks.

__Tim Cook’s cookin’ up…__ __[Apple’s](https://robinhood.com/stocks/AAPL)__ version of VR. Apple’s annual developer conference kicks off today. Analysts expect a new iPhone OS and a MacBook Air refresh. We may also see a long-awaited mixed-reality headset. Apple reportedly [showed](https://www.bloomberg.com/news/articles/2022-05-19/apple-shows-headset-to-board-in-sign-it-s-reached-advanced-stage) its board a prototype last month, a sign it could soon launch its first new hardware since its 2015 Watch. But the Fruit’s entering a market with heavy hitters: Meta’s Quest 2 has 78% market share, and __[Sony](https://robinhood.com/stocks/SONY)__ and Microsoft are also players. One analyst [thinks](https://www.streetinsider.com/Analyst+Comments/TFIs+Kuo+Sees+Apples+%28AAPL%29+ARVR+Headsets+2-3+Years+Ahead+of+Competitors+in+Computing+Power%2C+Says+Company+Could+Ship+3M+Units+in+2023/19444804.html) Apple could ship __[3M](https://robinhood.com/stocks/MMM)__ headsets next year.

__Weddings, prom, and a grad party…__ not enough closet space. A packed season of IRL events is fueling demand for formal fits. Last quarter, __[Rent the Runway’s](https://robinhood.com/stocks/RENT)__ [revenue](https://www.globenewswire.com/en/news-release/2022/04/13/2422285/0/en/Rent-the-Runway-Inc-Announces-Fourth-Quarter-and-Full-Year-2021-Results.html) doubled from the start of the pandemic in 2020, thanks partly to its return-from-home option. It’s a different story for rival clothing service __[Stitch Fix](https://robinhood.com/stocks/SFIX)__, which is struggling to lure new customers as lax office dress codes (think: elastic waistbands) cut [demand](https://www.cnbc.com/2022/03/08/stitch-fix-shares-plummet-after-company-cuts-guidance.html) for everyday outfits. We'll find out whether the uptick in summer soirees has affected orders when both report Thursday.

- __[Lightning](https://snacks.robinhood.com/newsletters/7ECLDsT8Ibe5XYojQ1M6zm/articles/2oN1ooBIRkWYjX6rAgJjrK/):__ __[Ford’s](https://robinhood.com/stocks/F)__ throwing billions more at three US EV plants, even as the industry struggles with production delays. Meanwhile, EV makers are building home charging stations and batteries. 
- __[Washed](https://snacks.robinhood.com/newsletters/34FDmnLHYiY52nfOf5RPi2/articles/1xeNLcA6O6rx5dxUJRCDcL/):__ Authorities raided __[Deutsche Bank](https://robinhood.com/stocks/DB)__ to investigate allegations it was “greenwashing” some sustainable-investment funds. The move comes at a time when ESG standards are facing greater scrutiny. 
- __[Embargo](https://snacks.robinhood.com/newsletters/71oOBinwjs2uPx02aEH9Xz/articles/36w5PISc3Scb2xRJu9r2Rr/):__ The EU is banning Russian oil that comes by sea, or about 90% of all EU oil imports. China and India are still buying Russia’s crude, but Europe could block Moscow from insuring Russian tankers.

The jobs report highlights a hot labor market for boomerang companies, and a slowing one for others

A lifeguard shortage could prevent a third of the US’s public pools from opening this summer