… and farming problems grill Tyson's meat profit
| Refund requested (Seth Herald/Getty Images) | |
|
|
Yesterday's Market Moves | | Dow Jones
33,619 (-0.17%) | S&P 500
4,138 (+0.05%) | Nasdaq
12,257 (+0.18%) | Bitcoin
$27,567 (-3.16%) |
| Dow Jones
33,619 (-0.17%) | S&P 500
4,138 (+0.05%) | Nasdaq
12,257 (+0.18%) | Bitcoin
$27,567 (-3.16%) |
|
|
|
Hey Snackers, Venus from Botticelli's 15th-century masterpiece, "Birth of Venus," was turned into a selfie-snapping virtual influencer for an Italian tourism campaign. Art buffs aren't pleased with the goddess of beauty filters, but the agency that created her is shell-ebrating. Stocks barely budged yesterday as investors sat on their hands waiting for tomorrow's consumer-price index to see how US inflation looked in April. | |
|
|
Ahead of summer, Biden proposes rules to compensate passengers for airline disruptions | Hold music… not the tune you were expecting on your relaxing getaway. After Southwest's holiday meltdown, which saw the airline cancel 16K flights, the White House wants to keep companies accountable for passengers' troubles. Yesterday, President Biden joined Transportation Secretary Buttigieg to propose new regulations. For the first time, airlines would need to compensate customers beyond just ticket refunds. Fly bad, my bad: Airlines would be required to compensate passengers and cover their meals, hotels, and taxis if they get stranded for reasons that are the airline's fault. They'd also be required to comp rebooking fees for delays/cancellations. Flight status quo: Right now airlines are required to refund customers only for canceled flights (not delayed ones). Biden said no major airlines provide cash compensation for preventable disruptions — though nine promised to cover hotels, meals, and rebooking.
Dude, where's my plane… Weather is the top cause of flight delays, but avoidable issues like staffing shortages and technical problems caused by outdated systems led to abnormally high disruptions last year, even when skies were clear. A technical error at Southwest last month caused it to temporarily halt all US departures. Meanwhile, the Transportation Department is investigating whether Southwest set unrealistic flight schedules despite known staffing shortages. |  | THE TAKEAWAY |
| A nudge in the wings could be overdue… If airlines have to compensate passengers more for disruptions, they might try harder to avoid delays. Southwest says it lost $1.1B because of the holiday meltdown, but it would've lost even more with these proposed regulations. It's not just Southwest: last year 2.7% of all US flights were canceled, the highest rate in a decade (apart from 2020). The TSA's expecting a record-breaking travel year on booming summer demand, but staffing shortages and delays of Boeing jet deliveries could mean more headaches. | |
|
|
Tyson posts a meaty loss as rising costs and cattle shortages take a bite out of profits | Got beef?... Tyson shares had their worst drop in a decade yesterday after the poultry powerhouse badly missed earnings expectations and chopped its annual sales forecast. It produces one of every five pounds of chicken, beef, and pork eaten in the US. But last quarter the nugget giant lost nearly $100M, down from an $829M profit last year. Bad meat: Tyson's beef unit makes up nearly 40% of its annual revenue, but sales fell 8% last quarter as cash-strapped consumers cut back on the pricey protein. Cold wings: Tyson's chicken biz also saw its profit margins shrink as the cost of animal feed rose $145M.
Farming snafus… The meat industry has gotten grilled as recent droughts and pricey farming costs (think: fertilizer, feed, fuel) make it harder to maintain livestock. Tyson said its live cattle costs are up $305M from last year. Now some farmers are selling their animals for slaughter at premium prices because keeping them is too expensive. Meanwhile, falling demand for beef is making it harder for producers like Tyson to pass on higher costs to consumers. | | THE TAKEAWAY |
| Dry spells can change appetites… US cattle inventory has already dropped more than 3% from last year, and over 90% of cows are in poor-to-fair grazing conditions. The USDA predicts this year will mark the first decline in beef production since 2015, and the per-person supply is expected to drop by 5.6% this year, which would be the greatest decline since 1987. Supply challenges could accelerate the trend of declining demand for red meat in the US, the world's largest beef consumer. | |
|
|
Heard on the Block: "FUD" | 🙄 Like rolling your eyes instead of engaging… "FUD" is a catchall term used to dismiss crypto criticisms (substantive or not) by saying they're intended to spread "fear, uncertainty, and doubt." Over the weekend, Binance twice paused bitcoin withdrawals, blaming high network fees. When observers saw that other exchanges hadn't paused withdrawals, which to some suggested there could've been a problem at the world's largest exchange, Binance CEO Changpeng "CZ" Zhao called the concerns "FUD." | |
|
|
What else we're Snackin' | Warren: Berkshire Hathaway shares popped on news that earnings at Buffett's baby were up 12%. The mega conglomerate said its insurance biz, juiced by a Geico U-turn, drove the bump. Coined: The SEC said that 76 cryptos — 16 of which have been listed on US exchanges — are securities (aka: should be regulated by the SEC). Meanwhile, key players like Coinbase and Gemini have expanded overseas. Searched: House Judiciary Chair Jim Jordan threatened to hold Google in contempt of Congress, saying it hasn't coughed up subpoenaed docs related to its communications with the exec branch. Fleabag: Amazon launched a new unit to distribute its content beyond Prime Video. Amazon's 21K movies and episodes, including those it scooped up by buying MGM, will be fair game for airlines and foreign TV networks. Liftoff: Virgin Galactic hopes to start commercial space tourism in June. It's had turbulence since founder Richard Branson took a joy flight in 2021, and its earnings today are expected to be less than stellar.
| 🍪 Thanks for Snacking with us! Want to share the Snacks? Invite your friends to sign up here. | |
|
|
Snack Fact Of the Day | King Charles' coronation is estimated to have cost as much as $125M | | |
|
|
Tuesday | - Earnings expected from Airbnb, Affirm, Novavax, Fisker, Nikola, Under Armour, Duke Energy, ZipRecruiter, Warby Parker, Expensify, Nintendo, Wynn Resorts, Duolingo, H&R Block, Rivian, and Squarespace
Authors of this Snacks own bitcoin and shares of: Alphabet and Amazon Correction: In yesterday's Snacks we misstated that AMC was reporting Q1 earnings on May 9. It actually reported on May 5. We regret the error. | |
|
|
Sherwood Media, LLC produces fresh and unique perspectives on topical financial news and is a fully owned subsidiary of Robinhood Markets, Inc., and any views expressed here do not necessarily reflect the views of any other Robinhood affiliate... See more | |
|
|
