The ball's in the Supremes' court (Robert Alexander/Getty Images) |
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| Hey Snackers, Starbucks intro'd a pork-flavored latte in China for the Lunar New Year. Dragon fruit may've been the obvious choice (it's the Year of the Dragon), but considering Starbs is pushing olive oil in the US, it seems to really want to make savory coffee a thing. After peaking Friday, stocks slumped on Monday (same). Investors are waiting for key consumer-inflation data this Thursday. And it's prime time for the Dow: Amazon was added to the prestigious index yesterday, booting Walgreens. ✈️ P.S. We'd love to learn about your travel and car preferences. Please take our 10-minute survey. |
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Supreme importance… Yesterday, the US Supreme Court started hearing two free-speech cases that could transform social media. The cases made their way up to SCOTUS after Florida and Texas passed laws aimed at blocking social-media giants from removing users or moderating posts based on political views — even if those users violate a platform's policies. Allegations of Big Tech censoring conservative views reached a boiling point after Meta, Twitter, and other platforms suspended former President Donald Trump's accounts following the January 2021 attack on the Capitol. The Texas and Florida laws were introduced shortly after. |
- Both sides: The states argue that social platforms are censoring users and violating the First Amendment. Tech companies argue that on their private platforms they have the right to moderate based on their policies.
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What's next… SCOTUS is expected to issue its decision on both cases by June, in the lead-up to a contentious presidential election. Social media has become a focus during election cycles, with big platforms serving as digital town squares. If the state laws are deemed constitutional, social-media companies say it would be a lot harder to remove users, moderate posts, and include additional context. They say that could lead to a slew of spam, extremism, and hate speech. There's a moderation divide brewing: |
- Blue states including California and New York have pushed for more oversight and accountability for users' posts, passing measures encouraging platforms to remove harmful content.
- Red states including Florida and Texas argue that social-media cos should be treated as "common carriers," like internet and cell providers, which would limit their power to moderate.
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 THE TAKEAWAY |
The "splinternet" is here… Divisions are emerging in social-media regulations as some states push for less moderation while others push for more. Meanwhile, new platforms that brand themselves as free-speech alternatives to Big Tech have cropped up, including Trump's Truth Social. The outcome of the SCOTUS cases could provide some clarity in the absence of federal rules. |
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Why buy a single stock when you can own the entire sector? |
Sector SPDR ETFs divide the S&P 500 into eleven sector index funds. Investors can now invest in just the slices of the S&P 500 they like best. The full list of Sector SPDR ETF funds are Communication Services (XLC), Consumer Discretionary (XLY), Consumer Staples (XLP), Energy (XLE), Financials (XLF), Health Care (XLV), Industrials (XLI), Materials (XLB), Real Estate (XLRE), Technology (XLK), and Utilities (XLU). Learn more about Sector SPDR ETFs. All ETFs are subject to risk, including possible loss of principal. Sector ETF products are also subject to sector risk and non-diversification risk, which will result in greater price fluctuations than the overall market. An investor should consider investment objectives, risks, charges and expenses carefully before investing. To obtain a prospectus, which contains this and other information, call 1-866-SECTOR-ETF (866-732-8673) or visit www.sectorspdrs.com. Read the prospectus carefully before investing. ALPS Portfolio Solutions Distributor, Inc., a registered broker-dealer, is distributor for the Select Sector SPDR Trust. |
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Why buy a single stock when you can own the entire sector? |
Sector SPDR ETFs divide the S&P 500 into eleven sector index funds. Investors can now invest in just the slices of the S&P 500 they like best. The full list of Sector SPDR ETF funds are Communication Services (XLC), Consumer Discretionary (XLY), Consumer Staples (XLP), Energy (XLE), Financials (XLF), Health Care (XLV), Industrials (XLI), Materials (XLB), Real Estate (XLRE), Technology (XLK), and Utilities (XLU). Learn more about Sector SPDR ETFs. All ETFs are subject to risk, including possible loss of principal. Sector ETF products are also subject to sector risk and non-diversification risk, which will result in greater price fluctuations than the overall market. An investor should consider investment objectives, risks, charges and expenses carefully before investing. To obtain a prospectus, which contains this and other information, call 1-866-SECTOR-ETF (866-732-8673) or visit www.sectorspdrs.com. Read the prospectus carefully before investing. ALPS Portfolio Solutions Distributor, Inc., a registered broker-dealer, is distributor for the Select Sector SPDR Trust. |
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Problems at checkout… The FTC and nine US states sued to block Kroger and Albertsons from joining in what would be the largest supermarket merger in American history, saying it would hurt competition. The $25B deal between the country's two largest supermarket chains would create a $200B grocery colossus with 720K employees. |
- Double-bagged: Regulators say the deal could reduce consumers' choices and lower workers' wages. Many of Kroger and Albertsons' 5K combined stores are relatively close to one another, which could create local monopolies.
- Grocery megazord: Since the deal was announced in 2022, execs of both companies have argued that merging is necessary to compete with larger retailers like Walmart, Amazon, and Costco.
- Take your receipt: The share of US income spent on food (11.3%) is at a three-decade high. Supermarket prices are up 25% from prepandemic, compared to inflation's 19% climb in that period. Critics of the merger worry it could further raise prices.
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Antitrust's supermarket sweep… Given the Biden admin's tough antitrust stance, the FTC's suit against Kroger and Albertsons has been expected for months. In 2022, the FTC and DOJ brought the highest # of antitrust challenges since pre-merger reviews became required in 1976. The FTC's' "you miss 100% of the shots you don't take" mentality has led to major wins (like: JetBlue's blocked purchase of Spirit, Illumina reversing its Grail acquisition); it's also led to big L's (think: Microsoft's Activision Blizzard deal going through). |
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THE TAKEAWAY |
M&A isn't throwing in the towel… Despite the bumpy antitrust road, M&A activity started this year in a full sprint. With Capital One's $35B acquisition of Discover and Walmart's $2.3B takeover of TV maker Vizio, global M&A transactions are at $425B so far this year, up 55% from a year ago. But with lawmakers already urging regulators to block the Capital One deal, it's unclear how many of those acquisitions will happen. |
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- Cheesy : Domino's stock popped after the world's largest pizza chain said sales grew last quarter for both takeout and delivery, fueled by its revamped loyalty program and a fresh partnership with Uber Eats.
- Bars : AT&T is trying to make amends for its dire 12-hour network outage last week by giving eligible customers a $5 credit. Some subscribers, who couldn't make calls (even to 911), say five bucks is not enough.
- Tipsy: Intuitive Machines' stock plunged after its lunar landing went sideways. After becoming the first commercial spacecraft to land on the moon, the tipped-over lander is expected to soon go offline.
- Shut: Half of top news sites have blocked OpenAI's crawlers to stop ChatGPT from ingesting their content. The New York Times is suing OpenAI over copyright infringement, but news titan Axel Springer is letting it license its work.
- Warrening: Berkshire Hathaway shares fell yesterday, despite the holding co posting a record annual profit. Founder Warren Buffett said that future gains could be narrower as US regulations on biz tighten.
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US currency paper bills are made of 75% cotton and 25% linen |
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- December US house-price index
- February consumer-confidence index
- NFL Combine begins
- Earnings expected from Norwegian Cruise Line, J.M. Smucker, AutoZone, Lowe's, Cava, Cracker Barrel, Macy's, Beyond Meat, Virgin Galactic, eBay, Redfin, Vizio, Urban Outfitters, Bumble, Eventbrite, Boston Beer Co., and Imax
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Authors of this Snacks own shares of: Amazon, Microsoft, Norwegian Cruise Line, Starbucks, Uber, and Walmart |
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