Hey Snackers,
CEOs are just like us: they don’t want to talk about a recession. We charted every single time a CEO mentioned “recession” (and related synonyms) on earnings calls this quarter and discovered a sharp drop-off from Q1. Optimism about the economic outlook seems to be a prevailing view on prediction site Polymarket, too.
Stocks shot to fresh records Tuesday after July inflation data in line with expectations fortified bets that the Federal Reserve would deliver its first interest rate cut of the year next month. The S&P 500 rose 1.1%, the Nasdaq 100 climbed 1.3%, and the Russell 2000 soared 2.9%. This marked the S&P 500’s first record close of August, with the tech-heavy Nasdaq 100 booking a record close as well as Meta.
The Spirit is willing but the cash is weak
Overall yesterday, US airlines were in good spirits… except for Spirit Airlines itself, which saw an absolutely devastating drop in its stock after warning that five months after clawing its way out of bankruptcy, it may not survive, as executives warned in an SEC filing that Spirit continues to struggle in a “challenging pricing environment.”
“Management has concluded there is substantial doubt as to the Company’s ability to continue as a going concern within 12 months from the date these financial statements are issued,” the filing said, explaining that the airline might not have the cash to stay afloat. In other words, we may soon see the last of Spirit in the sky.
Spirit has been the target of buyouts from Frontier (twice) and JetBlue (once), but Spirit rejected Frontier’s low-ball offer and the JetBlue merger was blocked last year over antitrust concerns. Now the airline may be grounded for good as it considers selling aircraft (a trick it has done before) or some of its gate space at airports to raise cash and lift its spirits.
It’s been a rough ride for airlines recently, but other than Spirit, US airlines soared yesterday: Delta Air Lines, United Airlines, American Airlines, JetBlue, and Alaska Air shares all headed skyward as investors seemingly bet that one airline’s loss is every other airline’s gain. Additionally, yesterday’s CPI report showed that plane ticket prices rose 4% in July. As airlines operate on pretty thin margins on profits from plane tickets, that increase was welcome news for shareholders. Maybe not for customers, though.
The Takeaway
Airlines are a tough business, and US budget airlines especially have been hit by a double whammy of inflation and tariffs raising their costs while also hitting the very budget-conscious customers they target. Southwest added bag fees, which could bring in $1 billion in annual revenue (still below what the big four earn from those fees), but Spirit already charges for choosing a seat, carry-on bags, and even in-flight sodas, so any cash infusion is unlikely to come from the customer side.
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Why the No. 2 crypto is giving very No. 1 vibes
Ethereum, the second-largest cryptocurrency by market cap, is thriving. Its price has been on an absolute tear, up over 32% this year to outpace bitcoin’s rise, and it’s closing in on the all-time high set in 2021. Meanwhile, spot ethereum ETFs are finally seeing the kind of action we’ve come to expect from bitcoin ETFs, crossing $1 billion in daily inflows earlier this week for the first time.
Not to mention big-deal money and big-deal names are pouring into the ethereum treasury reserve space, with Peter Thiel’s Founders Fund acquiring a 7.5% stake in ETHZilla Corporation, which holds over $357 million in ethereum. This follows his fund’s 9.1% stake in BitMine, the largest ethereum treasury firm and holder of a multibillion-dollar pile of the tokens.
At the same time, SharpLink Gaming — which boasts Joseph Lubin, cofounder of ethereum, as its chairman — has almost 600,000 tokens and expects to grow that to a pile of 1 million in the “near term.” Lubin is bullish on the long term, too, telling Sherwood News:
“ETH and BTC are increasingly being seen as the highest-powered money on the planet in the sense that they are uncensorable, credibly neutral even at the nation-state level, and, unlike nation-state fiat currencies, they cannot be used to exploit or financially repress the citizens of a nation.”
But he also had a lot to say about how ethereum was different from bitcoin and why SharpLink has “far greater flexibility than BTC treasury companies to grow investors’ value.”
The Takeaway
We’ll let Lubin make the case for ethereum’s future more eloquently than we could: “For 10 years, ethereum has run 24/7/365, flawlessly and with perfect uptime. Last year, it settled $25 trillion in financial activity. Ethereum is home to by far the largest share of stablecoins, RWAs, and other tokenized assets — and hosts the vast majority of DeFi activity. Nothing else even comes close.”
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Yesterday's Big Daily Movers
Circle jumped after beating on revenue in its first earnings report post-IPO
Tilray continued to rally on a report that President Trump is considering weed reform
Sneaker brand On Holding spiked after reporting that sales surged 32% in its second quarter
EV maker Nio hit the breaks after its weekly registrations dropped and Citigroup trimmed its holding
What Else We're Snackin'
Not to be outdone by OpenAI, Anthropic is now offering Claude AI to federal agencies for only $1
Meanwhile, xAI CEO Elon Musk is accusing Apple of favoring OpenAI
Maybe to distract from how much Tesla is lowering prices compared to its competitors?
And AI startup Perplexity made a $34.5 billion offer to buy the Chrome browser from Google
Snack Fact Of The Day
In July, Tesla had the biggest vehicle price drop of any EV manufacturer.
Today's Events
Earnings expected from Cisco
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