__Clear aisles, full carts...__ *can* lose. Target stock plunged 27% yesterday in its worst day since Black Monday in 1987. Tarjay [missed](https://www.wsj.com/articles/target-earnings-squeezed-by-inflation-and-fuel-costs-11652869800) the profit bull’s-eye, taking home just $1.3B last quarter compared to $2.4B a year earlier. Despite high inflation, Target’s trying *not* to raise customer prices this year. Instead of charging you more for made-in-China floral dresses, it’s eating the extra costs.

- __Strategy:__ Target wants to keep prices affordable in hopes of stealing market share from __[Walmart](https://robinhood.com/stocks/WMT)__, __[Amazon](https://robinhood.com/stocks/AMZN)__, and other retailers.
- __Problem:__ Transportation costs this year will be $1B higher than Target had forecast, which means it's spending more to get __[Keurig](https://robinhood.com/stocks/KDP)__ cups and shower caddies on shelves.
- __Problem (cont.):__ Consumers are buying fewer high-margin goodies like bikes, flat screens, and air fryers, and more lower-margin basics like food.

__#Flation starts hitting…__ the bottom line. Shrinking earnings have emerged as a theme for the US’s largest retailers. On Tuesday, Walmart reported that its quarterly profit [shrank](https://www.wsj.com/articles/walmart-sales-rise-but-higher-costs-dent-profit-11652787631) 25% from last year. 

- __Like Target,__ Walmart tries to undercut competitors on price to gain market share (especially with grocery staples). 
- __Unlike Target,__ Walmart execs suggested they’d have to raise prices after this “disappointment” of a quarter. Its stock is down 18% since earnings. 
- __Unlike *both*:__ Discount retailer __[TJ Maxx](https://robinhood.com/stocks/TJX)__ [notched](https://www.barrons.com/articles/tjx-stock-price-earnings-sales-margins-51652874529?tesla=y) higher profits and fatter margins after raising prices for off-the-rack clothes. Shares popped 11% yesterday (#outlier).

Retail earnings this week (Jeffrey Coolidge/Getty Images)

Carted

__The bottom line matters more…__ For investors, profit is often more important than sales for established corporations (with young startups, growth is often the focus). While sales rose at Target, Walmart, *and* Amazon, the major profit hits they took overshadowed that growth — cue: the stocks got pummeled. Meanwhile, TJ Maxx missed sales expectations but surged on its profit win. We’ll see whether __[Ross](https://robinhood.com/stocks/ROST)__ and __[Kohl’s](https://robinhood.com/stocks/KSS)__ also put the bottom line first when they report today.

From Target to Walmart, America’s largest retailers are eating inflation costs to stay ahead — and their bummer earnings reflect it

__The Block Head has spoken…__ and he says crypto concert tix are the future. Jack Dorsey, “Block Head” at __[Block](https://robinhood.com/stocks/SQ)__ (translation: CEO at the biz formerly known as Square) just [outlined](https://www.cnbc.com/2022/05/18/jack-dorsey-outlines-blocks-bitcoin-centric-future-no-longer-just-a-payments-company.html) plans for the company’s future. Block’s changed a lot since its last investor day five years ago: it bought Jay-Z’s music streamer __Tidal__ for $300M last year and fintech __Afterpay__ for [$29B](https://snacks.robinhood.com/newsletters/68Ji759EUo3BnTZxw9mAj1/articles/4ged1i28lf9nr12iGW3oBC/) this year. Here’s what’s next:

- __Not your grandma’s card-reader biz:__ Dorsey said Block’s not a payment company but an “ecosystem” spanning fintech, music, and crypto. 
- __Bullish on BTC:__ Block’s building __[bitcoin](https://robinhood.com/crypto/BTC/)__ wallets, mining systems, and developer tools because Dorsey believes bitcoin will become the internet’s native currency.
- __Banking on Gen Z:__ Block wants to be a payment superapp for younger users. Think: buying Kendrick Lamar [tickets](https://qz.com/2165570/jack-dorsey-and-kendrick-lamar-make-block-the-ultimate-gen-z-bank/) *and* crypto, all inside the Cash App (Block’s Venmo rival).

__There are plenty of ways to pay…__ but Block’s superapp strategy could distinguish it from a crowded payments field. The company started in 2009 as a point-of-sale disruptor, selling those swipe-y consoles used by your local coffee shop. But since then, __[Toast](https://robinhood.com/stocks/TOST)__, __Clover__, and others have launched competitors, and now __[Apple’s](https://robinhood.com/stocks/AAPL)__ [reportedly](https://www.macrumors.com/2022/05/16/apple-tests-iphone-tap-to-pay-apple-park/) testing a tap-to-pay iPhone feature that could blow up the industry.

Cube

__It’s a tough time to be a tech biz…__ even a profitable one. Tech stocks have plunged in recent months as investors ditch “disruptive” but unprofitable tech giants (think: __[Uber](https://robinhood.com/stocks/UBER)__, __[Peloton](https://robinhood.com/stocks/PTON)__, and __[Airbnb](https://robinhood.com/stocks/ABNB)__) to invest in slow-and-steady companies with consistent cash flow (think: energy, utilities). Even though Block has been profitable for the past three years, its blockchain-powered ecosystem could scare off tech-phobic investors looking for stability.

Block’s making a crypto-music-payment “ecosystem,” but it may be too visionary for today’s market

Target and Walmart are eating inflation costs — and their bummer earnings reflect it that

Dow Jones

S&P 500

Nasdaq

Bitcoin

There are reportedly more Airbnb listings in NYC than there are apartments for rent

🎯 Target’s anti-bull’s-eye

__Exchanging USDs for gelato…__ A year ago, one US dollar would get you 0.82 euro. Today, you can exchange $1 for about 0.95 euro — the currencies are almost equal. That's because the USD has "[appreciated](https://learn.robinhood.com/articles/3rN6OSsz8d3VA4wo3m41Li/what-is-appreciation/)," or gained in value, compared to the euro. In fact, the greenback has [gained](https://www.wsj.com/articles/the-dollar-is-winning-in-a-messy-global-economyand-that-matters-in-the-fight-against-inflation-11652617801) against many currencies (like the Japanese yen, the Chinese yuan, and the British pound). That's good for:

- __US imports:__ A strong dollar makes imported goods cheaper, which should help tamp down inflation (yay). The US = the world’s [largest](https://ustr.gov/countries-regions#:~:text=Goods%20Imports,percent%20of%20total%20goods%20imports.) goods importer. Instead of spending $100 to buy 90 euros’ worth of Italian leather, an importer would now spend about $90. 
- __American tourists:__ A stronger dollar means you get more foreign currency with fewer dollars. Paris trip = instantly cheaper.
- __Uncle Sam:__ A strong dollar is seen as a stable investment. That makes people more likely to lend money to the US gov't (think: buying Treasury bonds). No one wants to be paid back in a wobbly currency.

__Moment of appreciation...__ for the golden currency of nations. The USD's stable rep has long made it the world's reserve currency for international purchases. Think: countries [buy](https://www.investopedia.com/articles/forex/092415/oil-currencies-understanding-their-correlation.asp) crude oil in USDs. But what's behind the recent appreciation streak? It all comes down to the “d” word: demand for dollars is higher.

Browsing the dollar menu (RubberBall Productions/Getty Images)

Buck

__Everything’s relative…__ That’s literally true in the foreign-exchange world. USD demand has risen because (1) US interest rates are significantly higher than in other countries, which gives investors more reason to park their money in America, and (2) compared with other big economies, the US is looking peachy. Europe’s trade situation has been wrecked by Russia’s war on Ukraine, and China’s Covid crackdown has decimated chunks of its economy. The flip side: a strong dollar makes US exports pricier, which could check economic growth.

Stocks have been on a losing streak, but the dollar’s been winning — and that could help fight inflation

__Some people love a bargain…__ Warren Buffett’s holding company, __[Berkshire Hathaway](https://robinhood.com/stocks/BRK.A)__, has [invested](https://www.wsj.com/articles/warren-buffett-spends-big-as-stock-market-sells-off-11652589031?mod=business_trending_now_article_pos1) billions in battered stocks over the past few months, a recent filing showed. The Oracle of Omaha sat tight last year while stock prices soared, selling more than he bought. But now that markets have cooled, he’s buying again. Big time:

- __Spending spree:__ Berkshire [added](https://www.kiplinger.com/investing/stocks/604684/stocks-warren-buffett-is-buying-and-selling-in-q1-2022) $42B of stocks to its portfolio last quarter, its biggest splurge since 2008. Among them: Buffett classics like __[Apple](https://robinhood.com/stocks/AAPL)__, plus relative rookies __[Citigroup](https://robinhood.com/stocks/C)__, __[HP](https://robinhood.com/stocks/HPQ)__, __[Paramount](https://robinhood.com/stocks/PARA)__, __[Activision Blizzard](https://robinhood.com/stocks/ATVI)__, and __[Ally Bank](https://robinhood.com/stocks/ALLY)__.
- __The “Buffett Bump” is real:__ Shares of Paramount [jumped](https://www.cnbc.com/2022/05/17/paramount-shares-jump-10percent-after-buffetts-berkshire-reveals-new-stake.html) 15%, Ally rose 6%, and Citi [popped](https://ca.finance.yahoo.com/news/citi-shares-jump-berkshire-adds-132243748.html) 7% yesterday after Berkshire’s stakes were reported. __[Verizon](https://robinhood.com/stocks/VZ)__ and __[Kroger](https://robinhood.com/stocks/KR)__ fell on news that Berkshire sold their shares. 

__When the going gets tough…__ Buffett gets buying. The 91-year-old guru famously seeks stocks that are low priced relative to their potential long-term value. But those “value stocks” were hard to find last year since (according to Buffett) *everything* was overvalued. So Berkshire ended the year with a near-record cash pile. Now it’s trading time:

- __In…__ oil. Berkshire doubled down on inflation-friendly stocks like __[Chevron](https://robinhood.com/stocks/CVX)__ and __[Occidental](https://robinhood.com/stocks/OXY)__ (energy is the best-performing category in the S&P 500 this year). 
- __Out…__ pharma. Berkshire ditched stocks __[Bristol Myers Squibb](https://robinhood.com/stocks/BMY)__ and __[AbbVie](https://robinhood.com/stocks/ABBV)__, which spiked earlier in the pandemic.

Sage

__This is Warren-nomics 101…__ Thanks to Fed’s rate hikes, booming “growth” stocks have fallen back to Earth (#corrected). That’s created ideal conditions for Berkshire to shop for bargain-priced “value” stocks. Meanwhile, growth stocks — whose value often rests on distant returns — may keep struggling as the Fed keeps raising rates. To weather a downturn, even growth-hungry investors might jump on the Buffett wagon and invest in slow-and-steady stocks.

Buffett’s back, and he’s on a buying spree — since steep sell-offs have created a new class of value stocks

Stocks have been on a losing streak, but the dollar’s been winning — and that could help with inflation

1 million seconds is about 12 days, and 1 billion seconds is about 31 years

💵 The dominant dollar

__Like "Succession" in the sky…__ Spoiler alert: the latest episode of the __[Spirit Airlines](https://robinhood.com/stocks/SAVE)__ merger drama just dropped, and things are getting hostile. Yesterday __[JetBlue](https://robinhood.com/stocks/JBLU)__ [said](https://www.wsj.com/articles/jetblue-to-launch-tender-offer-for-spirit-urge-shareholders-to-vote-against-frontier-deal-sources-say-11652688356) it would try a hostile takeover of Spirit after its previous offer was rejected. Refresher:

- __Earlier this season:__ Spirit [accepted](https://snacks.robinhood.com/newsletters/1I3jIJQkqK0ygv51yekmCQ/articles/V8eaYxPExXyVEX2Vdr6Jz/) a $2.9B buyout offer from __[Frontier](https://robinhood.com/stocks/ULCC)__ in February. Then JB [made](https://snacks.robinhood.com/newsletters/22c5VDDeeLOi4iyaybumsG/articles/6v13W7lFCwtbaBJ73GcFzB/) a $3.6B bid in April, but Spirit’s board didn’t budge.
- __Plot twist:__ Now JB’s appealing directly to shareholders, asking them to ditch Frontier for a $3.3B deal (that’s lower than its first offer, but more than Frontier’s — and almost twice Spirit’s Friday price). JB said it would pony up more if Spirit’s board negotiates. 

__Only the big survive…__ __[American](https://robinhood.com/stocks/AAL)__, __[Delta](https://robinhood.com/stocks/DAL)__, __[Southwest](https://robinhood.com/stocks/LUV)__, and __[United](https://robinhood.com/stocks/UAL)__ take up lots of airspace: together they control 80% of US domestic flights. Meanwhile, an ongoing pilot shortage and rising fuel costs are making it hard for smaller airlines to compete. But buying Spirit could give JetBlue (or Frontier) more leverage: 

- __The Big 5:__ If either airline succeeds in taking over Spirit, they’ll become the fifth-largest US carrier with about 10% market share.
- __More control:__ Spirit’s buyer won’t just get market share: they’ll get more pilots, more pricing power (which helps offset rising fuel costs), and more routes (which are often reserved at major hubs).

If at first you don’t succeed… (Joe Raedle/Getty Images)

Hostile

__Downturns create buying opportunities…__ Spirit’s stock is down 46% over the past year, and JetBlue believes its latest offer will still be attractive to shareholders. Historically, hostile takeovers increase during downturns, when market caps slide (reminder: Belgian __[InBev](https://robinhood.com/stocks/BUD)__ [gulped](https://www.industryweek.com/leadership/companies-executives/article/21948686/the-battle-is-over-inbev-buys-anheuserbusch) down Bud-brewer Anheuser-Busch for $52B during the 2008 crisis). JetBlue probably won’t be the last buyer to shop for a downturn discount either: Elon Musk [hinted](https://www.bloomberg.com/news/articles/2022-05-16/musk-says-twitter-bots-likely-account-for-at-least-20-of-users) yesterday he might try to renegotiate his __[Twitter](https://robinhood.com/stocks/TWTR)__ deal at a lower price.

The Spirit saga continues: JetBlue moves to buy the budget airline at a "downturn discount"

__Turning on the bathroom TV...__ to an ad for premium shampoo. As travel demand rebounded last quarter, __[Marriott’s](https://robinhood.com/stocks/MAR)__ hotel occupancy [surged](https://marriott.gcs-web.com/static-files/24293aca-75a0-497f-ad51-29a5892ef957) to nearly pre-pandemic levels. Now the chain’s getting creative with ways to monetize its returning guests (beyond $10 minibar waters): Marriott is [rolling out](https://www.wsj.com/articles/marriott-rolls-out-media-network-that-lets-brands-reach-travelers-on-its-apps-and-tv-screens-11652698800?mod=hp_lista_pos4) a media network with __[Yahoo](https://robinhood.com/stocks/YAHOY)__ to let brands advertise on its digital and physical real estate.

- __Targeted stays:__ Marriott will use anonymized guest data to help brands target ads. Think: theme-park commercials for families vs. __[BMW](https://robinhood.com/stocks/BMWYY)__-rental ads for deep-pocketed businesspeople.
- __Inescapable ways:__ The ads will appear on Marriott's hotel websites (think: WiFi portal) and on hotel screens (think: lobbies, gyms, bars, room TVs).

__Prada blazer...__ for the forgetful biz traveler. Privacy developments like __[Apple's](https://robinhood.com/stocks/AAPL)__ iOS change ("ask app not to track") and __[Google's](https://robinhood.com/stocks/GOOGL)__ plan to block third-party tracking cookies on Chrome have made ad targeting much harder. Now brands are increasingly looking to "first-party data" (aka: info they collect directly from consumers) rather than "third-party data" (think: targeting offered by Insta and YouTube).

- __Marriott__ says it will use info from searches and bookings on its platforms to deliver relevant ads. It has 164M loyalty members and knows when and how they'll be traveling.
- __[Walmart](https://robinhood.com/stocks/WMT), [DoorDash](https://robinhood.com/stocks/DASH), and [CVS](https://robinhood.com/stocks/CVS)__ have also been leveraging customer data to offer marketers new ways to reach consumers (your 3 a.m. taco orders speak volumes).

AdFi

__If you have eyeballs, you have ad-tention...__ Companies that haven't traditionally sold ads are realizing that they can, whether it’s __[Kroger](https://robinhood.com/stocks/KR)__ and __[Walgreens](https://robinhood.com/stocks/WBA)__ [replacing](https://retailwire.com/discussion/will-customers-grow-to-love-walgreens-digital-cooler-doors/) fridge doors with digital screens or Marriott selling you rental cars in your hotel room. And while the $500B+ digital ad market is dominated by __[Facebook](https://robinhood.com/stocks/FB)__, Google, and __[Amazon](https://robinhood.com/stocks/AMZN)__, even a small slice of the pie can mean fresh billions — and fresh consumer-privacy concerns.

Marriott launches targeted ads on its hotel screens and sites, as privacy changes reveal the value of "first party" data

After a failed first offer, JetBlue wants to take over Spirit at a "downturn discount"

Because of Covid lockdowns, not a single car was sold in Shanghai last month

🛫 JetBlue goes hostile

__The status…__ is *pricey*. In two-thirds of developed countries, college is [free](https://educationdata.org/average-cost-of-college-by-country) or less than $2K a year. In the US, private college [costs](https://www.usnews.com/education/best-colleges/paying-for-college/articles/paying-for-college-infographic) $38K a year, on average, and public schools cost $23K out of state and $10K in state. The cost of college has [tripled](https://www.cnbc.com/2021/11/02/the-gap-in-college-costs-and-earnings-for-young-workers-since-1980.html) since 1980, while average pay for young workers is up just 20% since then. Still, many undergrads go into debt for degrees, since grads earn $1M more over their careers than non-grads. But students are reconsidering college’s value: in the past two years, US enrollment dipped 7% as more [choose](https://www.washingtonpost.com/education/2022/01/13/fall-college-enrollment/) to “earn over learn.” 

__Snackers say:__

- “Spending more money doesn’t always mean getting more in return… Going to college taught me that spending ‘the big bucks’ on something people traditionally value won’t always pay off.” —*Isabelle, 27*
- “My university BA in psychology was rewarding… and was very overpriced. My community-college AS in nursing was exponentially more financially valuable, but less fun.” —*Brad, 32*

3,500 Snackers told us how they see the value of a college degree

__The outlook…__ is shifting. President Biden [campaigned](https://www.cnbc.com/2019/08/27/biden-hints-at-his-plan-to-address-student-debt-and-college-costs.html) to make public college free in the US. Now that his Build Back Better bill is stalled that’s… not likely. Meanwhile, schools are making class less costly to woo students: Columbia University recently nixed tuition for kids whose families make less than $150K/year, and Utica College is one of several schools exploring cheaper three-year degrees. College alternatives like coding bootcamp __General Assembly__ also offer new ways to pay, like income-share agreements (ISAs) that charge a % of earnings once grads land jobs (alums work at __[Google](https://robinhood.com/stocks/GOOGL)__ and __[JPMorgan](https://robinhood.com/stocks/JPM)__).

The cost of admission: up and to the right

__The status…__ is green. On paper, it couldn't be a better time to land your first job. The US is experiencing basically full employment. Last month the US [added](https://www.cnn.com/2022/05/06/economy/april-jobs-report/index.html) 428K jobs, leaving a [record](https://www.bls.gov/news.release/jolts.nr0.htm) 12M “help wanted” signs unfilled. That’s good news for college seniors, since employers plan to hire over a [quarter](https://www.nbcdfw.com/news/local/data-shows-promising-job-outlook-for-recent-upcoming-college-grads/2840935/#:~:text=The%20National%20Association%20of%20Colleges,the%20class%20of%20May%202021.) more graduates this May compared with last year. They’ll be making an average starting salary of $55K, but the return on (degree) investment tends to vary (comp-sci majors are starting at $72K, English majors at $49K). 

Nearly two-thirds of all public bachelor's degree programs leave graduates able to earn enough to cover the cost of college within a decade. But for recent grads, a [survey](https://www.intelligent.com/1-in-7-college-grads-earn-less-than-the-poverty-threshold/) found more than half don’t end up working in their field of study — and nearly half live paycheck to paycheck.

__SnackStat:__ *78% of Snackers said they felt “fairly confident” or “very confident” about their job prospects as college students or recent grads.* 

__Snackers say:__

- “There are a lot of jobs you can’t even interview for unless you have a degree. Having it helps get your foot in the door.” —*Jennifer, 33*
- “Growing up, degrees were the key to getting a ‘good job.’ While I do think it is valuable, it’s not at the rate of what I am paying.” —*Thomas, 42*

Hired

__The outlook…__ is unclear. Even though companies like __[Starbucks](https://robinhood.com/stocks/SBUX)__ pay extra so that you'll make rush-hour lattes, overall wages aren't keeping up with inflation. Many students feel [that](https://www.cnbc.com/2022/05/06/this-is-how-student-loan-debt-became-a-1point7-trillion-crisis.html) tacking on two years (or more) for grad school is the cost of doing biz to land a competitive role in certain fields. The value of that extra degree is mixed: while master’s degree holders can [make](https://www.indeed.com/career-advice/pay-salary/how-much-does-degree-increase-earnings) 20% more than those with a bachelor’s, employability (aka: the odds of getting hired) [increases](https://www.educationdata.org/education-attainment-statistics) only by 3%. Plus, more school means more tuition: nearly half of federal student-loan debt comes from postgrad for master’s and Ph.D. programs.

The labor market: opportunity knocking

__The status…__ is spiraling. Colleges raise prices, lenders dole out aid, and colleges raise prices (again). For decades, tuition increases have [outpaced](https://www.cnbc.com/2022/05/06/this-is-how-student-loan-debt-became-a-1point7-trillion-crisis.html) household incomes, forcing families to rely on loans. Today, two-thirds of college students graduate with debt, which typically takes [17 years](https://www.cnbc.com/2022/05/06/this-is-how-student-loan-debt-became-a-1point7-trillion-crisis.html) to pay off. The average loan balance at graduation has tripled since the ’90s to more than [$30K](https://www.cnbc.com/2022/05/06/this-is-how-student-loan-debt-became-a-1point7-trillion-crisis.html) — and nearly a tenth of borrowers owe more than *$100K*. To help relieve the burden, Biden pledged to make at least some college free, and promised at least $10K in loan forgiveness for each borrower. So far, his admin has forgiven $17B worth of federal student debt for 675K borrowers — a fraction of the [$1.7T](https://www.cnbc.com/2022/02/08/what-it-would-take-for-the-government-to-cancel-student-loans-.html) in student loans Americans owe.

__SnackStat:__ *65% of Snackers said their college degree was “fairly valuable” or “very valuable” relative to their tuition investment. A quarter said it wasn’t “particularly valuable,” and 9% said it was “worthless.”* 

__Snackers say…__ 
- “I made six figures straight out of college. If you are going to college to be a librarian, the 100K in student loans are probably not worth it.” —*Zack, 37*
- “If I could go back, I wouldn’t do it. I would tell my children not to go to college, and get a technical job.” —*Mikayla, 28*

Interest

__The outlook…__ is mixed. This month, the Education Department said it’s forgiving loans of more than 110K government workers (think: teachers, firefighters). But the rest of debt holders aren’t so lucky, since Biden’s blanket loan-forgiveness promise isn’t panning out. Still, the pause on student loans has now been extended six times since March 2020, saving borrowers $1.5B a month in interest payments alone. Payments are set to resume in September, and if nothing changes, student debt could top [$3T](https://www.cnbc.com/2022/05/06/this-is-how-student-loan-debt-became-a-1point7-trillion-crisis.html) by 2035.

Student debt: forgive and forget?

- __[Contagion](https://snacks.robinhood.com/newsletters/4pRYwQp39631d0x5mo8zbx/articles/DdT30qWIQKQ8lB83AgCes/):__ Nearly $500B was wiped off the crypto market last week as volatility has investors turning risk-averse. Not even some so-called stablecoins appear safe.
- __[Bottle](https://snacks.robinhood.com/newsletters/4pRYwQp39631d0x5mo8zbx/articles/77nr1oiiC86WivHiIpYgzR/):__ A baby-formula shortage is forcing worried parents to ration supplies or drive hours in search of the powdered gold. The root cause: US import limits.
- __[Med](https://snacks.robinhood.com/newsletters/5xjp3PmErVX6calMlzNVjK/articles/T0hqswG18kk95NL2Buyig/):__ The feds subpoenaed mental-health startup __Cerebral__ over its prescription practices for pills like Adderall and Xanax, a sign regulators may rein in telemedicine.

ICYMI

Last week's highlights...

As the class of 2022 graduates, the college-value prop is blurrier than ever

It takes college grads an average of three to six months to find a job after school

🎓 The graduation edition

__It could be contagious…__ Crypto markets have caught a cold — or worse. The crypto industry has lost nearly $500B this week after two top stablecoins were “[unpegged](https://snacks.robinhood.com/newsletters/CZLtSSO02dkWUNfYSsz7D/articles/40vJyepmLGsyVSkxrAJx2M/)” — and caused investors to panic-sell other coins. Refresher: stablecoins are cryptos whose value is (theoretically) pegged to other assets, like the USD. A recap:

- __First,__ stablecoin __TerraUSD__ (UST) [fell](https://snacks.robinhood.com/newsletters/CZLtSSO02dkWUNfYSsz7D/articles/40vJyepmLGsyVSkxrAJx2M/) to a third of its “fixed” value after its algorithm failed to rebalance its price (it’s still [down](https://coinmarketcap.com/currencies/terrausd/)).
- __Then__ the largest stablecoin, __Tether__, [slipped](https://fortune.com/2022/05/12/terrausd-ust-luna-contagion-tether-bitcoin-solana-ether-price-crypto/) from its $1 peg, falling to $0.95 before recovering. (Tether is backed by cash, not just an algorithm.) Skittish investors have been selling off the bigger coins this week too: __[bitcoin’s](https://robinhood.com/crypto/BTC)__ down 22%, __[ether](https://robinhood.com/crypto/ETH)__ 31%, and __[solana](https://robinhood.com/crypto/SOL)__ 49%.

__This could be a (decentralized) bubble…__ When an entire asset class (think: real estate, stocks) is overvalued, it’s often called a “bubble” — and if prices later crash, the bubble bursts. Some experts say crypto’s sell-off is starting to [resemble](https://www.investopedia.com/articles/stocks/10/5-steps-of-a-bubble.asp) the dot-com bubble that led to the 2000 tech crash, or the housing bubble that led to the Great Recession (2007-09). In both cases, a sharp panic-fueled sell-off followed years of soaring speculative prices. (Worth noting: both those crashes wiped out trillions in wealth, much more than the crypto sell-off has.)

Chaos in cryptoland (Justin Tallis/AFP via Getty Images)

Untethered

__Bursting bubbles are destructive…__ but they can be beneficial. If a crypto bubble pops, coins could disappear, companies could go bankrupt, and investors could lose billions. Yet more consumer protections, stronger regulations, and leaner companies could also emerge (__[Google](https://robinhood.com/stocks/GOOGL)__ and __[Amazon](https://robinhood.com/stocks/AMZN)__ vaulted to global dominance after dot-com-era consolidation). That was what crypto-supporting Sen. Pat Toomey meant this week when he said that “failure should be an option” in the crypto space.

As crypto prices crash, the lawless market could be in for a regulatory reckoning

__Endless “sold out” shelves…__ not again. A baby-formula crisis is rippling through the US, forcing parents to [ration](https://www.nytimes.com/2022/05/10/us/baby-formula-shortage.html) supplies or drive hours in search of inventory. Over 40% of formula is out of stock nationwide, up 10% from a month ago. Now top formula supplier __[Abbott Labs](https://robinhood.com/stocks/ABT)__ says it could take until July to get the product back on shelves. How we got here:

- __In February:__ The FDA [recalled](https://www.nbcchicago.com/news/local/2nd-infant-dies-after-exposure-to-recalled-baby-formula-linked-to-bacterial-infections-fda-says/2771429/#:~:text=The%20child%20died%20after%20being,sakazakii%20infection%2C%20the%20FDA%20said.) formula brands made at Abbott's Michigan plant after reports that some babies had gotten sick — and even died — from bacterial illnesses traced to the facility. As a result the plant was shut down.
- __This week:__ Abbott got the OK to [resume](https://www.thedenverchannel.com/news/national/amid-shortages-fda-allows-abbott-to-release-baby-formula-from-facility-after-recall) production in that plant, but only on a case-by-case basis (think: specialty formulas for medical conditions).

__Pandemic stockpiles…__ The plant closure is just part of the story. Worried parents snatched up formula in droves in the early days of Covid. As they worked through their supplies, demand plummeted and formula makers slashed production. Inventory still hasn’t kept up with a resurgence in demand (#supplychain, #laborshortages). Now retailers [from](https://www.bloomberg.com/news/articles/2022-05-09/cvs-walgreens-target-ration-baby-formula-as-shortages-hit-50) __[Target](https://robinhood.com/stocks/TGT)__ to __[CVS](https://robinhood.com/stocks/CVS)__ are capping how much formula shoppers can buy. On top of that:

- __Regulators are *very* strict__ about what goes in formula, and often only US-based ingredients make the cut. Global suppliers that do qualify [face](https://www.theatlantic.com/ideas/archive/2022/05/baby-formula-shortage-abbott-recall/629828/) a nearly 20% tariff. 
- __The result__ is a tiny domestic industry of formula makers dominated by a handful of companies, like Abbott.

Bottle

__This isn’t just a production issue…__ it’s a policy issue. The pandemic caused both the Trump and the Biden administrations to emphasize domestic manufacturing (aka: on-shoring). But the worsening formula shortage illustrates the pitfalls of limiting imports of basic necessities. Washington appears to be listening: the White House [said](https://www.nbcnews.com/politics/white-house/biden-speak-retailers-manufacturers-baby-formula-shortage-rcna28538) yesterday it’s working to reduce red tape and make it easier to import formula.

America’s baby-formula shortage exposes the risks of US-first trade policies and strict regulation

The average American adult has a net worth of $79,952

🫧 Crypto, untethered

__April showers bring...__ May's expensive water bill. We're checking in on our old frenemy, inflation. Consumer prices were up 8.3% in April from a year earlier. The pace of inflation slipped a bit from March, falling for the first time in eight months — but is still close to a 40-year high. The biggest culprits were food, plane tickets, and housing. Zooming in:

- __That bites:__ Food prices were up over 9% from a year ago. Dairy products jumped 2.5% from March alone, the category's largest monthly price gain since 2007. Milk is up 15% from April 2021, and your omelet isn't faring much better: eggs are +10% month over month.
- __Not fly:__ Your summer getaway’s making you sweat before you hit the beach. Airline fares were up a whopping 33% from a year ago, and soared 19% from March alone. 
- __Lost steam:__ Not everything got more #flated. Energy and clothing prices fell from March to April, with gas dropping 6%. Don't get too pumped — that’s still up 44% year over year.

__JFK to LAX...__ You know it's bad when $600 looks like a sweet deal. With stimulus gone, consumers are dipping into savings to support [rising spending](https://snacks.robinhood.com/newsletters/7Eii6CUWY0BFV8UUv3TpJD/articles/6HBcxIs3mE0INLHalLT7zn/). The Fed’s hiked rates twice so far this year to tame prices, but April's data inspires little confidence that broad inflation is cooling. And despite the hot labor market, prices are rising faster than historically high wage gains.

The dreaded dairy aisle (Michael M. Santiago/Getty Images)

Flated

__Lower income = smaller runway…__ Americans with low incomes are the [most sensitive](https://www.npr.org/2022/05/11/1097966775/inflation-poor-income-inequality-biden-federal-reserve) to inflation because they have smaller cash reserves to meet elevated prices for necessities (think: $4.50 milk gallons and wild rent prices). While there are signs that inflation could be peaking, the real question is how long it’ll take to get back to “acceptable” levels. The longer it takes, the sooner savings will run dry.

From flights to cheese, prices are still rising — and while inflation could be peaking, real relief looks distant

__Sunbathing at a shepherd’s hut…__ welcome to the new age of great escapes. __[Airbnb](https://robinhood.com/stocks/ABNB)__ has launched its biggest makeover in more than a decade, hoping you’ll ditch your spa getaway for an off-the-grid excursion. The revamp includes the ability to search by category, from castles to tiny homes, no specific destination required. Plus:

- __AirCover:__ Free travel protection with a 24/hr safety line, and a “get what you booked” guarantee. AKA: travel insurance. 
- __Split stays:__ A frictionless way to split longer trips between two homes, intended to appeal to digital nomads.
- __“OMG” getaways:__ A new category highlighting IG-worthy stays, like an alien-themed [glamping](https://www.airbnb.com/rooms/33518282/photos?source_impression_id=p3_1652292763_%2B1kSo8fTVlR2YqQj) site in Joshua Tree (FYI: it’s booked solid till 2025).

__Team meetings in Tahoe...__ Airbnb almost collapsed when Covid hit, cutting a [quarter](https://www.npr.org/sections/coronavirus-live-updates/2020/05/05/850986054/airbnb-cuts-1-900-jobs-25-of-its-workforce-as-pandemic-freezes-travel#:~:text=Airbnb%20says%20it's%20cutting%201%2C900,email%20to%20employees%20on%20Tuesday.) of its workforce as bookings fell off a cliff. But the rental giant staged a quick pivot — not to mention an IPO — recognizing that "old" travel was gone while creating experiences for remote safety-conscious customers. Bookings [reached](https://www.cnbc.com/2022/05/03/airbnb-abnb-earnings-q1-2022.html) a record 102M last quarter, and nearly a quarter were long-term rentals. The company expects a strong summer travel season to keep fueling record sales.

- __Rental competition:__ Rival __VRBO__ (owned by __[Expedia](https://robinhood.com/stocks/EXPE)__) also [saw](https://skift.com/2022/05/02/expedia-says-half-of-recent-vrbo-customers-were-new/) record bookings in the first quarter, and said half its customers were brand new.
- __7 out of 10 Americans__ expect to travel this summer, though inflation could scramble some of those plans.

Treehouse

__Flexibility and discoverability are the future of travel…__ and Airbnb has always had a built-in advantage for that future. Its revamp is intended to merge the things that customers love about the service (think: the whimsy of finding and staying in a treehouse) with the comforts of the traditional hotel experience (think: getting exactly what you pay for, and a refund if you don’t).

Airbnb pulled off a pandemic turnaround for the ages — now it’s betting on a future with all-new travel habits

From flights to cheese, prices are still rising fast — and while inflation could be peaking, relief looks distant

There’s enough concrete in the Hoover Dam to pave a highway from San Francisco to NYC

⛰️ Inflation’s peak?

__Not so stable after all…__ Stablecoins are causing crypto chaos. Refresher: stablecoins are cryptocurrencies whose value is (theoretically) pegged to another asset, like the USD. But this week __TerraUSD__ (UST), the third-largest stablecoin, was unpegged from its $1 value and [fell](https://www.cnbc.com/2022/05/10/bitcoin-btc-investors-panic-as-terrausd-ust-sinks-below-1-peg.html) to $0.62. Investors then sold UST (think: crypto bank run), sending jolts through the market.

- __Broken algorithm:__ Most stablecoins are backed by cash reserves, but “algorithmic” coins like UST are backed by “sister” coins. When one sister dips below $1, it can be swapped for the other at a small profit, which (theoretically) keeps both stable. 
- __Bitcoin bailout:__ During this week’s bitcoin sell-off, UST *and* its sister coin slumped together, causing investors to ditch *both*. To prop ’em up, UST’s creator sold some bitcoin from a $3.5B emergency stash — but UST still isn’t back to $1.

__Crypto’s confidence crisis…__ goes beyond stablecoins. The crypto market has lost nearly $2T in capitalization from its November peak. Even __[bitcoin](https://robinhood.com/crypto/BTC)__ is down 50% since then, which has led analysts to question its status as “reserve currency” for other coins like UST. 

- __Companies__ including __[Tesla](https://robinhood.com/stocks/TSLA)__, __[Square](https://robinhood.com/stocks/SQ)__, __[Coinbase](https://robinhood.com/stocks/COIN)__, and __[MicroStrategy](https://robinhood.com/stocks/MSTR)__ have lost billions on crypto in recent months. 
- __El Salvador,__ which accepts bitcoin as legal tender, has lost $$ too (though it bought 500 bitcoin this week).

A stablecoin breaks the buck (dem10/Getty Images)

Unstable

__Most cryptos were minted in calm weather…__ Now they’re caught in the path of two storms: regulation and recession. UST’s “buck-breaking” moment showed that even so-called stable coins are risky, prompting Treasury Secretary Janet Yellen to call — again — for new crypto rules. Plus, economists predict a recession’s coming, which could cause un-tested coins like UST to lose *more* value. Investors may get caught in the rain: most short-term crypto investors are already underwater, and more than half of bitcoin holders are in the red.

A stablecoin just “unpegged” from the dollar, testing crypto’s ability to weather big downturns

__Loanly, I'm Mr. Loanly...__ "Buy now, pay later" doesn’t sound as good as it used to. The days of near-zero interest rates and stimmy checks are gone, and it's [hurting](https://techcrunch.com/2022/05/10/the-bnpl-boom-may-be-fading/) loan providers — from BNPL firms like __[Affirm](https://robinhood.com/stocks/AFRM)__ to accessible lending platforms like __[Upstart](https://robinhood.com/stocks/UPST)__.

- __Shares of Upstart tanked__ 56% yesterday, despite the company's better-than-expected [earnings](https://ir.upstart.com/news-releases/news-release-details/upstart-announces-first-quarter-2022-results) (revenue more than doubled and profit 3X'd).
- __The AI-driven platform__ connects people with less-than-stellar credit scores to lenders with favorable terms. Its mantra: "you are more than your credit score."
- __Problem:__ Upstart cut its revenue forecast for the year and predicts lower sales and zero profit for this quarter.

__Pay in installments?...__ Maybe *nah*. Lending [boomed](https://snacks.robinhood.com/newsletters/1TtUXZyHvZ2SETOZOaUYq7/articles/2wpby5ZPzAfks9OlK1Syl/) during the pandemic as extra-low interest rates made borrowing cheap — from home buying to online clothes shopping. BNPL firms like __Afterpay__, __Klarna__, and Affirm thrived by letting you buy those $700 Gucci loafers *now* and pay in installments *later*. Last year, Americans spent more than [$20B](https://www.sfgate.com/news/article/influencers-lead-Gen-Z-into-debt-17142294.php) through BNPL. Almost a year ago, Klarna hit a $46B valuation, becoming the second-most-valuable private fintech. Now:

- __Interest rates__ are expected to keep rising as the Fed tightens its monetary belt to fight inflation. Cue: Affirm stock, down 81% this year. 
- __Loan-default rates__ are rising after cruising at historic lows for the past year and a half. Lenders are demanding higher interest to make up for higher risk.

BNPN

__When rates rise, BNPN wins…__ That’s “buy now, pay now.” Rising rates make loans more expensive — from credit-card debt to car leases — so consumers might start taking out fewer loans (hence: why Upstart slashed its forecast). Now the BNPL sector is being repriced to reflect that, and debt-laden Gen Zers are starting to [turn against](https://www.sfgate.com/news/article/influencers-lead-Gen-Z-into-debt-17142294.php) the services whose growth they fueled.

Upstart and Affirm shares plunge as the “buy now, pay later” boom fades — now, rising rates could boost “BNPN”

A stablecoin “unpegged” from the USD, testing crypto’s ability to weather big downturns

The T. Rex was alive closer in time to humans than to the stegosaurus

🪙 Unstablecoins

__Over prescribed…__ and under investigation. This weekend, online mental-health startup __Cerebral__ [said](https://www.wsj.com/articles/cerebral-receives-subpoena-from-federal-prosecutors-11651950307?mod=business_lead_pos12) it’s been subpoenaed by the feds over its pill-prescription practices. Refresher: the FDA changed the rules to allow virtual prescriptions during the pandemic — even for ADHD meds like Adderall, which are easily abused. Last year, ADHD drug prescriptions jumped 10% from 2020, and critics [worry](https://www.wsj.com/articles/startups-make-it-easier-to-get-adhd-drugs-that-made-some-workers-anxious-11648267205) telehealth startups have become digital pill mills:

- __In March,__ Bloomberg and the WSJ [reported](https://www.bloomberg.com/news/features/2022-03-11/cerebral-app-over-prescribed-adhd-meds-ex-employees-say) that Cerebral and __Done__ pushed workers to prescribe ADHD meds after 30-minute video sessions. 
- __In response,__ __[Walmart](https://robinhood.com/stocks/WMT)__, __[CVS](https://robinhood.com/stocks/CVS)__, __[Walgreens](https://robinhood.com/stocks/WBA)__, and startup __Truepill__ reportedly stopped distributing ADHD meds for telehealth startups, with Cerebral also pausing new ADHD scripts.

__Robo-therapy roller coaster…__ It’s not just ADHD: rates of anxiety and depression [spiked](https://www.who.int/news/item/02-03-2022-covid-19-pandemic-triggers-25-increase-in-prevalence-of-anxiety-and-depression-worldwide#:~:text=Wake%2Dup%20call%20to%20all,mental%20health%20services%20and%20support&text=In%20the%20first%20year%20of,Health%20Organization%20(WHO)%20today) 25% during the pandemic, the WHO said. So did [investment](https://www.wsj.com/articles/as-demand-for-mental-health-care-booms-investors-see-opportunities-11652018401?mod=business_lead_pos7) in mental-health startups: nine of them (including Cerebral) hit unicorn valuations ($1B+). But many execs at these fledgling companies have no medical background, and some have been accused of using Silicon Valley strategies that prioritize growth over patient care:

- __Viral marketing:__ Cerebral reportedly spends millions on ads on __TikTok__, Insta, and __Google__ each month; some patients say TikTok ads convinced them they had ADHD. 
- __D2C pill subscriptions:__ Cerebral and Done charge patients a monthly fee, meaning they earn more from long-term prescriptions.

Telehealth under scrutiny (MirageC/Getty Images)

Pills

__Telemedicine is pharma’s Wild West…__ and the Cerebral case could mean regulators are ready to play sheriff. The telehealth model exploded during Covid, when VC-funded startups took a page out of tech’s "growth at all costs" playbook to scale fast. But a one-size-fits-all telehealth model may not work as well for complex diagnoses like ADHD as it does for common ailments like the flu — and this tele-Adderall crackdown could signal more regulation to come.

Regulators investigate mental-health startup Cerebral, signaling an end to telehealth’s Wild West

__Swapping face masks for lip kits…__ Saturday nights are back. As more of us get glammed up for social soirees, multistep skin-care routines are taking a back seat. Beauty giant __[Coty](https://robinhood.com/stocks/COTY)__ — home to names like CoverGirl and Kylie Cosmetics — [saw](https://investors.coty.com/news-events-and-presentations/news/news-details/2022/Coty-Reports-3Q22-Sales-Growth-Ahead-of-Expectations-and-Progress-Across-All-Metrics/default.aspx) sales jump 15% last quarter. It’s expecting an even bigger profit bump this year thanks to the [return of IRL events](https://snacks.robinhood.com/newsletters/7Eii6CUWY0BFV8UUv3TpJD/).

- __Like bees to honey:__ Coty's portfolio of luxe fragrance lines grew 20% as middle-seat-bound travelers splurged on name-brand sprays from __[Burberry](https://robinhood.com/stocks/BURBY)__ and __[Gucci](https://robinhood.com/stocks/REAL)__.
- __Clean face:__ Coty’s CEO said natural cosmetics (think: vegan, eco-friendly ingredients) were also a key growth [driver](https://www.fool.com/earnings/call-transcripts/2022/05/09/coty-class-a-coty-q3-2022-earnings-call-transcript/), a trend that took off during the pandemic.

__Welcome to the makeup renaissance…__ where cosmetic giants from __[Estée Lauder](https://robinhood.com/stocks/EL)__ to __L’Oréal__ post record sales as you ditch the couch for a night out. In the US, shoppers are using their extra $$ to [splurge](https://www.reuters.com/business/retail-consumer/loreal-first-quarter-sales-up-135-2022-04-19/) on TikTok-inspired beauty trends and eye-popping palettes. Last year, US “prestige beauty” sales (think: department-store brands like __Clinique__) [rose](https://www.gcimagazine.com/consumers-markets/news/22018003/the-npd-group-2021-us-prestige-beauty-growth-drivers-ranked) 30% from the year before, topping pre-pandemic levels. Now:

- __In stores:__ Beauty retailers like __Sephora__ and __[Ulta](https://robinhood.com/stocks/ULTA)__ have seen foot traffic [jump](https://www.premiumbeautynews.com/en/u-s-beauty-market-to-grow-as,20284) 25% compared to last year.
- __Online:__ Coty said its e-commerce sales [rose](https://investors.coty.com/news-events-and-presentations/news/news-details/2022/Coty-Reports-3Q22-Sales-Growth-Ahead-of-Expectations-and-Progress-Across-All-Metrics/default.aspx) double digits, even after hiking prices to keep up with higher packaging and ingredient costs.

Blush

__Don’t call it a cosmetics comeback…__ at least not yet. Coty’s still at the mercy of all the usual economic headwinds (supply backups and inflation). Plus, WFH and flexible work situations have sent [weekly](https://www.kantar.com/inspiration/fmcg/less-is-more-how-the-pandemic-shifted-the-beauty-market) makeup usage down 28% compared to 2019. Coty’s premiumization (think: fancy-fied products it can charge extra for) has kept sales strong. But the stock hasn’t caught up: Coty shares are [down](https://robinhood.com/stocks/COTY) 25% this year.

Coty sales are a vision as consumer demand for cosmetics defies rising inflation

An investigation of health startup Cerebral could end telehealth’s Wild West era

The Nasdaq — down 27% this year — has given up all its 2021 gains

🩺 Telehealth under scrutiny

__Three weddings and a bar mitzvah...__ Dance floors and open bars have prevailed over __[Zoom](https://robinhood.com/stocks/ZM)__ ceremonies and seltzer cans. 2022 is shaping up to be the "catch-up year," as Americans spend big on experiences they missed over the pandemic. Inflation has been more persistent than Elon trying to buy __[Twitter](https://robinhood.com/stocks/TWTR)__, but consumers have shrugged off high prices, which [hit](https://www.cnn.com/2022/04/29/economy/pce-inflation-march/index.html) a fresh 40-year high (again). 

- __Hawkish:__ The days of “money printer go brrr” are gone. The Fed started raising rates in March to tame soaring prices. Last week came the largest hike since 2000. 
- __Higher interest rates__ make borrowing pricier (think: credit-card interest) and saving more attractive (think: savings-account yields). Still...
- __YOLO spending:__ Consumer spending surged 1.1% in March, [boosted](https://www.reuters.com/business/us-consumer-spending-beats-forecasts-march-inflation-soars-2022-04-29/) by demand for international getaways, restaurants, and hotels.

__Salmon or short rib?...__ Too many RSVPs. The "catch up" craze means that all the nixed celebrations are roaring back:

- __Weddings:__ Good luck finding a venue. 2022 is set to ring in the most nuptials in nearly four *decades*. Wedding-related indulgences are set to hit $68B, and guests are also [spending more](https://www.wsj.com/articles/wedding-travel-hotels-cost-11644970118). That helps hotels like __[Marriott](https://robinhood.com/stocks/MAR)__, which [announced](https://skift.com/2022/05/04/marriott-sees-record-direct-bookings-at-its-hotels/) record direct bookings. Meanwhile, __[Signet](https://robinhood.com/stocks/SIG)__ and __Tiffany's__ have seen diamond sales [surpass](https://wwd.com/accessories-news/jewelry/diamonds-roar-back-above-pre-pandemic-levels-1235063320/) 2019 levels.
- __Concerts:__ From festivals to [sold-out](https://omaha.com/entertainment/music/review-sold-out-billie-eilish-concert-was-all-about-the-singer-her-music-and-her/article_26b94e20-a5be-11ec-8d96-6f0d7685aeaa.html) Billie Eilish concerts, live music is back. __[Live Nation](https://robinhood.com/stocks/LYV)__ said its ticket sales were up 45% from early 2019 levels, and it just posted its best first quarter ever.
- __Vacays:__ Between spring breakers and summer planners, __[Booking.com](https://robinhood.com/stocks/BKNG)__ raked in its highest quarterly bookings of all time. __[Amex](https://robinhood.com/stocks/AXP)__ saw travel spend double and __[Visa](https://robinhood.com/stocks/V)__ said summer demand is on fire.

Fourth wedding in three days (FG Trade/Getty Images)

YOLO

__Playing catch-up could fizzle out…__ The Fed’s [betting](https://www.cnbc.com/2022/05/03/stock-market-futures-open-to-close-news.html) it can slow inflation without causing a recession, but that’s TBD. If it tightens its belt too aggressively, Americans could tighten their wallets (recession wedding = not ideal). Meanwhile, consumer confidence [dipped](https://www.reuters.com/business/us-consumer-confidence-dips-april-2022-04-26/) in April as Russia’s war, China’s Covid crackdown, and swinging oil prices all heightened econ worries. People have already started [spending less](https://www.wsj.com/articles/manufacturers-could-soon-face-demand-woes-on-top-of-supply-chain-snarls-11651511557) on [online shopping](https://www.cnbc.com/2022/05/05/e-commerce-stocks-plummet-as-consumers-pull-back-online-spending.html), appliances, furniture, and cars. If high inflation keeps up and savings run dry, they could cut back on experiences too.

2022 is poised to be the “catch-up year,” from constant weddings to sold-out concerts — but the splurge could run dry

__Ripping the Band-Aid off…__ The EU’s preparing to [ban](https://www.cnn.com/2022/05/04/business/eu-russia-oil-ban/index.html) Russian oil by year’s end to pressure President Putin — a shift from just weeks ago. The ban will test Europe’s reliance on Russia, which [supplies](https://www.nytimes.com/2022/05/04/world/europe/eu-russia-oil-embargo.html) a third of the EU’s oil. Hungary, Slovakia, and others already said they’d need more time to ditch Russian oil. The EU ban will [take](https://www.rystadenergy.com/newsevents/news/press-releases/big-bang-to-a-steady-stream-spr-release-to-provide-only-temporary-relief-for-consumers/) 2M barrels off the market daily, which could send global oil prices — up 40% this year already — even higher. Supply disruptions have also [reduced](https://www.bloomberg.com/opinion/articles/2022-05-04/u-s-east-coast-diesel-supply-is-running-on-fumes?srnd=premium&sref=px9VEDa6) US diesel inventory to a 30-year low, stressing diesel-guzzling industries (think: shipping, energy). 

__(Super) Bored Ape Yacht Club…__ Not [even](https://www.nbcnews.com/tech/crypto/nfts-market-decline-rcna27338) Snoop Dogg can keep NFT prices from dropping like they’re hot. Last year NFTs made a splash in the crypto-sphere, becoming a $17B market seemingly overnight. But global sales are down 92% from September as traders feel the weight of inflation and high interest rates. Last week __[Coinbase](https://robinhood.com/stocks/COIN)__ launched its first NFT marketplace, but saw less than $60K worth of trades on its debut. With markets going haywire, collectors are less likely to splurge on a digi-ape — some are selling for less than a third of the OG price.

Zoom Out

Stories we’re watching...

__Shifting gears...__ This week could be make or brake for __[Rivian](https://robinhood.com/stocks/RIVN)__, which reports Wednesday. The EV biz’s shares are down 75% from its November IPO after the truck maker [fell short](https://www.cnbc.com/2021/12/17/shares-of-rivian-hit-new-low-following-2021-production-cuts.html) of production goals in 2021 and [lowered](https://techcrunch.com/2022/03/10/rivian-shares-reach-new-low-after-reporting-disappointing-q4-earnings/) production targets for this year. Rivian’s skid has hit its backers hard: __[Amazon](https://robinhood.com/stocks/AMZN)__ (which [owns](https://www.fool.com/investing/2022/05/04/why-rivian-is-dropping-with-ipo-expiration-coming/) 18%) and __[Ford](https://robinhood.com/stocks/F)__ (which [owns](https://www.fool.com/investing/2022/05/04/why-rivian-is-dropping-with-ipo-expiration-coming/) 11%) both lost billions on their stakes last quarter, when Rivian’s losses jumped 7X from a year ago. Rivian’s IPO lockup also ends today, which gives early stockholders their first chance to sell — and could lead to a bigger selloff.

__China’s retail retreat…__ Last week investors wiped $26B off __[Alibaba’s](https://robinhood.com/stocks/BABA)__ market cap on rumors that the founder of the “Amazon of China” was detained (the mix-up: same last name, different guy). The scare comes as China’s strict Covid lockdowns put pressure on the country’s economy and deter consumers from dropping cash on non-essentials (like: new clothes, vacays). Last quarter Baba posted its slowest sales growth since its 2014 IPO. China’s spending slowdown, and competition from e-comm rivals like __[JD.com](https://robinhood.com/stocks/JD)__, could deliver another blow to Baba’s profits when it reports Thursday.

Events

Coming up this week...

- __[Click](https://snacks.robinhood.com/newsletters/7drI8vLSEid0YZLml7w2fH/articles/4J0Z4dTus6bhb7m6accQYz/):__ Ecommerce stocks like __[Shopify](https://robinhood.com/stocks/SHOP)__ are getting hammered as the pandemic boom in e-buying (fueled by stimmy checks and boredom) loses steam. Consumers are shopping like it's 2019 — more on experiences, less on stuff.
- __[SCOTUS](https://snacks.robinhood.com/newsletters/PbfDGtpHVvDV3e1fKrQWi/articles/1YJ0K0jfGxDuI3ODrepPrf/):__ After a leaked draft opinion revealed that the Supreme Court appears likely to overturn Roe v. Wade, corporate America's response has been mostly silent. But pushback from employees and the public could change that.
- __[Diverge](https://snacks.robinhood.com/newsletters/6AJH7e5jPEol78eTxOBd7p/articles/6wcF6KI3GX84eTlowlDJp7/):__ While __[Lyft](https://robinhood.com/stocks/LYFT)__ is driving slow and straight, __[Uber](https://robinhood.com/stocks/UBER)__ is swerving to diversify. Last week’s earnings showed that Uber’s numerous revenue streams (rides, freight, food) are helping it speed ahead of ride-focused Lyft.

2022 is poised to be the “catch-up year,” from constant weddings to sold-out concerts

In 1934, Levi’s became the first company to make jeans for women — decades before it was mainstream for women to wear pants in public

🥂 Year of YOLO

__The return of (IRL) retail therapy…__ While you ditch front-porch packages for fitting rooms and food courts, online retailers are being left in the dust. In yesterday’s big selloff, shares of __[Shopify](https://robinhood.com/stocks/SHOP)__ sank [15%](https://robinhood.com/stocks/SHOP) after the popular ecomm platform saw sales slow for the fourth straight quarter. 

- __Ripped receipt:__ Shopify’s sales rose 22%, to $1.2B, but that was a fraction of its 110% gain from the same quarter last year.
- __Troublesome trifecta:__ Execs blamed inflation, labor shortages, and a return to IRL shopping for the slowdown — and said the rest of the year doesn’t look much better. 

__Caribbean cruise > cyber sales...__ In the past two years, nearly a fifth of every dollar [spent](https://www.digitalcommerce360.com/article/us-ecommerce-sales/) in the US came from online orders. Yet with consumers returning to their 2019 spending habits — on concerts, vacays, and Sunday brunch — the boom in e-buying is losing momentum. US ecommerce sales have dropped 3X compared to 2020 levels. That’s showing up in the bottom line of some of the biggest pandemic winners:

- __Shares of Wayfair__ tumbled after the online furniture seller lost nearly 2M customers and $320M in sales last quarter.
- __Both [Etsy](https://robinhood.com/stocks/ETSY) and [eBay](https://robinhood.com/stocks/EBAY) lowered__ their sales forecasts for the year, and didn't say when (or if) they’d return to pandemic-era profits.
- __A week ago, [Amazon’s](https://robinhood.com/stocks/AMZN) stock__ had its [worst](https://www.cnbc.com/2022/04/29/amazon-shares-sink-11percent-on-disappointing-guidance.html) day in over a decade after cooling sales led to its first quarterly loss since 2015.

Online retailers have a “pull forward” problem (Noam Galai/Getty Images)

Click

__The Great Normalization is here...__ Ecommerce sites benefited from a huge pull-forward boost in demand during the pandemic, fueled by stimmy checks and boredom. As __[Visa’s](https://robinhood.com/stocks/V)__ and __[Mastercard’s](https://robinhood.com/stocks/MA)__ earnings [showed](https://snacks.robinhood.com/newsletters/1Ls3rUz4jDKI9WX1KLhQFI/articles/64w8VxOJwTvKaTng5OSrZC/), consumers are still opening their wallets — they just have new priorities. For platforms like Shopify, it means adjusting expectations for the *new* new normal of more balanced spending.

Ecommerce stocks are getting hammered as shoppers get back to spending like it’s 2019

__Come Shell or high water…__ Soaring energy prices: bad for consumers, great for oil companies. How great? Yesterday, London-based __[Shell](https://robinhood.com/stocks/SHEL)__ [reported](https://www.nytimes.com/2022/05/05/business/shell-earnings-record-profit.html) a record $9.1B quarterly profit — 3X last year’s — despite $4B+ in losses related to its leaving Russia. It’s something of a trend. 

- __Pumpin’ profits:__ In the most recent quarter, BP posted its highest profit in a decade, despite $26B in Russia losses. __[Exxon](https://robinhood.com/stocks/XOM)__ [said](https://thehill.com/policy/energy-environment/3471782-exxon-chevron-post-massive-q1-profits-amid-soaring-gas-prices/) it doubled profits from last year, and __[Chevron](https://robinhood.com/stocks/CVX)__ *quadrupled* its haul.
- __Buy, buy, buybacks:__ Buoyed by bumper profits, all four oil giants plan to boost share buybacks and raise dividends, two ways to return $$ to investors. 

__Big buybacks, big blowback…__ US and UK lawmakers have started calling for a “windfall tax” on energy giants, a one-time tax on their excess profits. The idea is to use the cash to help consumers with rising prices at the pump. Critics say the money would be better spent investing in renewable energy. 

- __Winds of change:__ Spain and Italy already [slapped](https://www.reuters.com/business/energy/enel-sticks-guidance-q1-boosted-by-new-green-capacity-asset-sale-2022-05-04/) windfall taxes on some energy companies, but experts don’t expect the US or UK to follow suit.

Slick

__Windfalls come in many forms…__ Russia’s invasion of Ukraine gave oil giants a financial windfall in booming profits. It also gave them a *strategic* windfall: it illustrated how dependent the global economy still is on fossil fuels, whether we like it or not. Earlier this week, __[VW](https://robinhood.com/stocks/VWAGY)__ [said](https://www.cnbc.com/2022/05/04/volkswagen-to-prolong-coal-fired-power-as-russia-concerns-continue.html) it planned to keep using coal because of a proposed EU ban on Russian oil. Then Shell’s CEO told investors the war proves the need for big oil producers, despite the pressure to act on the climate crisis.

Shell — Europe’s biggest oil biz — posted a record $9B profit, yet whispers of a “windfall tax” are growing louder

The jersey Diego Maradona wore when he scored the famous “Hand of God” goal sold for $9.28M — the highest price ever paid for sports memorabilia