…and Costco's Netflix moment
| Not lovin' it (Selcuk Acar/Getty Images) | |
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Yesterday's Market Moves | | Dow Jones
33,853 (-0.22%) | S&P 500
4,377 (-0.04%) | Nasdaq
13,592 (+0.27%) | Bitcoin
$30,126 (-1.85%) |
| Dow Jones
33,853 (-0.22%) | S&P 500
4,377 (-0.04%) | Nasdaq
13,592 (+0.27%) | Bitcoin
$30,126 (-1.85%) |
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Hey Snackers, Watch out, ketchup. There's a new dip in town: Pepsi said it's releasing a limited-edition condiment dubbed "Colachup" made with its flagship soft drink. Sounds like it'll go great with Sierra Mistard. Stocks were mixed yesterday, with chipmakers sliding on concerns of a possible US export ban. Meanwhile, Fed Chair Jay Powell said more rate hikes are likely as inflation remains sticky. | |
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Severe weather jolts the airline industry as expected record-breaking summer travel takes off | 2 hours on the tarmac… $20 food voucher. As severe thunderstorms rip across the US, airlines are feeling the heat. Since Friday, 15K+ US flights have been delayed and nearly 5K canceled. The disruptions affected flights headed to New York and New Jersey airports — with delays averaging 3+ hours. Additional snags popped up in hubs like DC, Chicago, and Atlanta. Rough skies: United said the FAA "failed" it after storm-related restrictions forced the airline to cancel nearly a fifth of its Monday flights. Déjà blues: JetBlue also saw a high # of delays, after which the airline told employees it had room to improve its response.
A perfect storm… Summer is crucial for airlines' balance sheets as folks pack planes and splurge on tix. Delta boosted its earnings guidance this week, pointing to "off the chain" travel demand. Still, stormy skies could rain on the profit parade. As of February, weather cancellations were up nearly 20 percentage points compared to 2018. What's more, airlines are still grappling with staff shortages after a pandemic exodus. And setbacks add up: Southwest said it expected to lose up to $425M on its holiday meltdown last year. |  | THE TAKEAWAY |
| It's more than a passing storm… As travel szn takes off and extreme weather picks up, airlines plan on getting put to the test. Summer travel is already topping prepandemic levels, and the FAA said more delays are likely. This July Fourth weekend, nearly 4.2M travelers are estimated to fly — an 11% increase over last year. | |
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Costco comes for membership sharers as the subscription squeeze intensifies | No free hot-dog lunch… Costco said it'll start checking membership cards and photo IDs at its self-checkout kiosks. The goal: keep nonmembers out. Similar to the Walmart-owned Sam's Club, Costco charges its 66M paying members a yearly subscription fee. In return, customers get access to the store's bulk-pricing deals via membership cards they show at checkout. At least in theory. The big-box behemoth said it noticed an uptick in people sneaking in with someone else's card. Pay to shop: Members pay $60/year, with an "executive membership" costing $120. Members only: Ensuring its shoppers are actual members matters because the chain makes most of its income from subs. Last year, membership fees raked in $4.2B.
When sharing isn't caring… Costco isn't the only biz sick of subscribers sharing the bounty. After several delays, last month Netflix said it'd start telling customers "your Netflix account is for you and the people you live with — your household." Despite years of tolerating (and sometimes encouraging) password sharing, the streamer put the kibosh on the free rides. The 'Flix now charges sharers an extra $8/month for non-household accounts. | | THE TAKEAWAY |
| More users doesn't always equal more profit… The sharing economy's getting squeezed, and even companies that explicitly built sharing into membership perks have walked things back. This year American Express said many cardholders could no longer bring guests into its airport Centurion Lounges for free (new charge: $50). While corporates' anti-sharing moves may come off as Grinch-like, they stand to benefit bottom lines. BTW: despite grumblings about its crackdown, Netflix reportedly saw a lift in paying subs. | |
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What else we're Snackin' | Click: Google's facing advertisers' ire after a report said 80% of its video-ad placements (on third-party sites) were on unsavory webpages (picture: clickbait). Google disputed the findings, but some clients want a refund. Crunch: General Mills shares sank 5% after the cereal icon missed Wall Street's revenue expectations. The Cheerios parent struggled as inflation and declining consumer spending ate into sales and margins. Rosy: US consumer confidence jumped to a 17-month high, with fewer people predicting a recession. The labor market remains historically strong, despite expected ongoing Fed rate hikes. Chipped: President Biden may impose added export restrictions on AI chips, further limiting the tech's sale to China. It could hinder chipmakers like Nvidia, which have seen business boom with the genAI buzz. Sweat: Texans are being asked to conserve electricity as 100+ temps tax its grid. 40M+ people in the US have been under a heat advisory this week, as record temps hit communities from Arizona to Florida.
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Snack Fact Of the Day | Pickleball injuries may result in up to $500M in added healthcare costs this year | | |
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Thursday | Authors of this Snacks own shares of Walmart | |
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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 | |
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