Hey Snackers,
Coca-Cola shares may have recently hit an all-time high, but the company’s marketing may have hit a new low as it recently bungled a perfectly good ad campaign idea — highlight mentions of the beverage in great works of literature — by asking AI to help with the creative. You know what happened next: the AI got the basic facts wrong, including crediting an author with words he never wrote, in a book he didn’t publish. Coke Classic.
Yesterday, the US and China agreed to substantially dial down tariffs levied on one another for 90 days, a major de-escalation in the most important front of the trade war that’s whipsawed global markets.
The S&P 500 gained 3.3%, the Nasdaq 100 surged 4%, and the Russell 2000 rose 3.5%, with traders bidding up shares of companies that had seen profit estimates slashed since the end of March in expectation of a recovery.
Exsqueeze me?
Don’t look now, but it sure seems like we’ve got some short squeezes cooking.
With the tariff war between China and the US arriving at a tense truce yesterday, markets were up across the day. But that lift also gave way to two interesting movements on Coreweave and SoundHound AI that look a whole lot like short squeezes in action. Let’s take a look:
With no real news out for SoundHound Monday and the shares up roughly 20%, the massive amount of short interest in the stock clearly comes in for consideration as the catalyst. At last glance, stock out on loan to short sellers accounted for 32% of the company’s tradable float.
Expensive bets against CoreWeave were also getting rocked. Exchange data shows 30% of CoreWeave’s float was sold short heading into the start of May, during which time it’s rallied more than 40%.
The fingerprints of a short squeeze are all over these assets, as their surges in price squeeze out the doubters who are forced to bail with some pain rather than stick to their guns and endure a whole lot of pain.
The companies don’t have a ton in common beyond both riding the AI boom. The recently IPO’d cloud computing company CoreWeave is reporting its first quarterly earnings report this Wednesday.
The Takeaway
It feels like it’s been a minute since retail got in on a good old-fashioned short squeeze. It’s a make-or-break moment for a company, and you can tell some executives really live for it. It was only a few months ago that the CEO of SoundHound AI went on television and told the shorts, “Bring it.”
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Those Chinese TikToks about life on the mainland aren’t propaganda — they’re brilliant marketing
While we’re happy to hear about the US-China tariff truce, we must admit that one silver lining for us about the whole kerfuffle has been the noticeable uptick of content from China directed at Americans on TikTok.
If you haven’t seen it on your feed somehow, accounts are showing off Chinese-made planes and flying taxis, a user going by “GrumpyChineseGuy” is complaining about tariffs, and American users are being accused of being foreign agents. It’s all led to a larger, nagging question that now hangs over the app: is TikTok showing us all Chinese propaganda?
Well, on the one hand, it probably is — that’s one reason behind the still looming, much-delayed ban — but not in the way you think it is.
Our friends at Garbage Day dug into the origins of some of these fascinating posts showing us the inside of a Chinese factory or what “real life” is like in China and found there’s a clear unstated agenda behind them.
The Takeaway
It’s definitely a good thing to scrutinize anything you see on social media and question not only the veracity, but the motives behind the post itself. While TikTok may be a Chinese-owned powerhouse, Meta-owned Instagram and Google-owned YouTube are also not just optimizing your feed to keep you engaged and watching for longer, but pulling levers and changing what you see for other reasons, too.
Yesterday’s Big Daily Movers
Amazon and Apple both surged on the US-China tariff reprieve
Cruise stocks climbed and airlines gained altitude on the trade truce news
Shopify soared nearly 14%, helping lead the day’s broader rally as the e-commerce giant gears up to join the Nasdaq 100 next Monday
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What Else We're Snackin'
Tesla employees confirmed there are Model Y demand problems, but the stock spiked anyway
TIL while reading that Nestle is trying to spin off its bottled water business how relatively little its candy business makes
Apple may reportedly raise iPhone prices because of tariffs but is going to extreme lengths to never say that’s the reason
We watched “Babygirl” over the weekend and were interested if that’s why everybody’s drinking milk again
Snack Fact Of The Day
Last year, 52% of American couples had an engagement ring with a lab-grown diamond.
Today's Events
April Consumer Price Index
Earnings expected from JD.com, Under Armour, Honda, On Holdings, and Sony
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