Back in a flash (Umit Turhan Coskun/Getty Images) |
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| Hey Snackers, Facebook "pokes" (yes, they still exist) spiked 13X after a design tweak. Despite the feature's ancientness, Meta said 50% of new pokes were made by 18- to 29-year-olds. So vintage. The S&P 500 broke 5.2K for the first time after the Fed held interest rates steady, as expected. Fed officials are projecting three rate cuts this year. Hot rate-cut summer, anyone? |
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Whoops… Bitcoin's up more than 40% this year, but for a brief moment this week things weren't lookin' so hot. On Monday, the price of BTC on the Seychelles-based BitMEX exchange plummeted to $8.9K (against the dollar-pegged stablecoin tether) before recovering 10 minutes later to about $67K. Meaning someone who bought the dip within that time could have sold for a nearly $60K profit minutes later. BitMEX said someone selling huge amounts of bitcoin was behind the "flash crash," which can occur when an order book's sell orders significantly outnumber its buy orders. A flash crash flashback: |
- Blip: On Binance's US exchange in 2021, bitcoin momentarily slipped to $8.2K from $65K within a minute.
- Eek: In 2017, ethereum briefly nose-dived to ten cents from $319 on a Coinbase exchange in the span of a second. The fault: a multimillion-dollar market sell order.
- First flash crash: In 2010, a $4.1B sell order led to the New York Stock Exchange's biggest plunge in decades, all within 20 minutes.
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Not lit… A key factor in the BitMEX crash was liquidity (or rather, the lack of it). If investors can trade an asset without affecting its price all that much, then a market's considered liquid. Lower liquidity can mean higher volatility (more price swings), because an asset isn't trading hands very often. If a market has low liquidity, then a significant sell order could cause a flash crash. An internet sleuth called out the sale of 977 bitcoin on BitMEX as a possible cause of Monday's short-lived plunge. |
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 THE TAKEAWAY
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Oceans have competing currents… Crypto is a stateless, global technology that doesn't always act like it. That's partially because it's traded on exchanges that are tied to different countries and markets, which is one of the reasons why crypto can vary in price across exchanges. (FYI: US folks can't use BitMEX.) Crypto liquidity has shifted following the SEC's January approval of spot bitcoin ETFs. Bitcoin's become easier to trade in the US compared to overseas exchanges. |
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Interest rates can impact all financial companies. Why continue to take single stock risk? |
The Financial Sector ETF (XLF) provides investors access to the leading financial stocks in the S&P 500, all encapsulated within a single security. Why continue to take on the risk of single stock exposure, when you can own the entire financial sector of the S&P 500? Learn more about the Select Sector SPDR Fund XLF.
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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Interest rates can impact all financial companies. Why continue to take single stock risk? |
The Financial Sector ETF (XLF) provides investors access to the leading financial stocks in the S&P 500, all encapsulated within a single security. Why continue to take on the risk of single stock exposure, when you can own the entire financial sector of the S&P 500? Learn more about the Select Sector SPDR Fund XLF.
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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Clearing out the freezer… Temps are up, but Unilever's not screaming for ice cream. The consumer goods giant said it plans to spin off its 100-year-old ice cream division, which includes half of the top 10 global ice cream brands and scooped $8.6B in revenue last year. Without a buyer, Unilever's 35 ice cream labels (including Ben & Jerry's, Klondike, Breyers, Popsicle, and Magnum) will likely become a standalone biz by the end of next year. The move is part of Unilever's restructuring plan, which includes laying off 7.5K employees. |
- Rocky road: Ice cream's need for its own cold-temp supply chain proved too costly for Unilever. The biz hiked ice cream prices by 9% last year to offset costs, leading shoppers to switch to cheaper brands.
- Coned out: Looking ahead, Unilever will be left with a few hundred other multinational consumer brands. Its portfolio includes Hellmann's mayo, Axe body spray, Dove soap, and Vaseline.
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Sundae scaries… Ice cream was Unilever's slowest-growing unit last year (sales rose just 2%). On average, Americans eat about a third less ice cream annually than they did in 1986, and purchases fell 8% from 2018 to 2022. Ozempic's effect on snacking could take an even bigger bite out of sales. Other creamy cos have faced struggles: Nestlé sold its US ice cream biz (including its rights to Häagen-Dazs) in 2019 for $4B, Ample Hills Creamery went bankrupt in 2020, and McDonald's is in a legal showdown over its seemingly forever-broken soft-serve machines. |
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THE TAKEAWAY |
Splitting the flavors can add value… Unilever, which also sold its tea biz for $5B in 2022, isn't the only conglomerate that's cut ties with an ill-fitting division to get more focused. Kellogg split into two companies last year as cereal sales went stale but snacking spiked. Johnson & Johnson recently spun off its consumer-health products biz (think: Band-Aid, Tylenol) to focus on pharma and tech. |
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- Bling: Shares of Signet Jewelers, the parent of Kay and Jared, sank after the world's largest diamond-jewelry retailer said Americans are not putting a ring on it. Signet warned of falling sales as US engagements drop.
- ASMR: Bentley is putting off its plan to go full EV, saying it'll continue selling plug-in hybrids past 2030. The luxe company is just the latest automaker to delay electric investments as sales growth slows.
- Blue: JetBlue is slashing 16 routes, including LA departures to Miami, Vegas, and Cancun. The JFK-based airline is trying to return to profitability after its bid to buy Spirit Airlines was blocked.
- Zoomies: Online pet-goods retailer Chewy's shares jumped after it reported that net sales rose 10% on the year. Chewy's clawing market share as paw-rents' spending on their pets remains "recession resilient."
- Homey: A household-spending survey that informs the Consumer Price Index is expected to soon include childcare and other at-home labor, which is overwhelmingly done by women.
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The average annual cash bonus for Wall Street workers slipped last year to $177K (womp) |
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| - World Poetry Day
- Earnings expected from Accenture, Darden Restaurants, FedEx, Lululemon, and Nike
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Authors of this Snacks own bitcoin and ethereum |
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