…and Mexico's investor-spooking supermajority
| Fewer visits paid = find new ways to get paid (Sherwood) | |
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Yesterday's Market Moves | | Dow Jones
38,711 (+0.36%) | S&P 500
5,291 (+0.15%) | Nasdaq
16,857 (+0.17%) | Bitcoin
$70,626 (+2.67%) |
| Dow Jones
38,711 (+0.36%) | S&P 500
5,291 (+0.15%) | Nasdaq
16,857 (+0.17%) | Bitcoin
$70,626 (+2.67%) |
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Hey Snackers, Introducing tech's "Donnie Brasco": in 2018, the FBI began covertly running a fake company that sold "encrypted" phones. Cue: possibly the largest sting operation ever. Criminals didn't know they were actually using FBiPhones. Stocks ticked up yesterday after fresh data showed US job openings fell to 8M in April, the lowest in three years. Investors are hoping for a goldilocks May jobs report this Friday: bad enough that it could spur rate cuts, but not enough to stoke recession fears. | |
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Instagram tries out unskippable ads as Big Tech hits an unskippable growth wall | Skip reflex… You already see ads sandwiched between your friends' Insta posts. Now you might not be able to scroll past them. Meta has confirmed it's testing unskippable ads on Instagram, after a user posted a screenshot of the experience. A countdown timer appears to block users from scrolling their feeds until they've viewed an ad. Insta's calling it "ad break" (funny, since you won't get a break from the ad). The test shows how far Meta is willing to go to boost its bottom line. When all else fails, rely on ads… Despite all its talk of the metaverse and the AI revolution, Meta's lifeline is still good ol' ads. Its revenue popped last quarter and profit more than doubled from last year as its average price per ad grew (along with ad impressions). Meanwhile, its metaverse-focused Reality Labs division kept bleeding cash (nearly $4B last quarter and $45B since late 2020). The unskippable-ads move may be a symptom of a bigger problem: Meta hasn't been able to drive growth with its push for virtual worlds and AI integrations (see: the "Ask Meta AI Anything" chatbot it forced into its apps). Big Tech has gotten so big that it's hit a growth wall, and even AI might not be able to save it. As one writer put it, there may be no more worlds left to conquer. Down bad: Since April 2023, top sites like FB, YouTube, Google, and X have been losing traffic. FB's site alone has seen a 28% decline since 2021. Tepid: Meta's users are still rising, but growth has majorly cooled since the boom days. After all, over a third of the world's population uses Meta's apps daily.
|  | THE TAKEAWAY |
| Users have a wall too… There are only so many ad-boosting moves platforms can make before users get sick of the experience. Some studies suggest that forcing people to watch ads hurts engagement and brand perception. Insta and FB usage has already declined among teens, and now Meta's making a push to lure back younger users. | |
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Mexican stocks and currency slide after a populist candidate's sweeping presidential win | Checks and balances… Claudia Sheinbaum won Mexico's presidential race Sunday with ~60% of the vote, the highest in the country's democratic history. She's set to become Mexico's first female president and its first Jewish prez too. Her party, Morena, had a sweeping victory in state and congressional elections, setting it up for a potential supermajority. But some investors weren't cheering: Mexican stocks dropped and the country's peso fell 5% amid concerns that her party will push through policies without opposition. It could mean the US's southern neighbor may usher in a less business-friendly era. BTFs (best trade friends): Last year, Mexico surpassed China to become the US's top trading partner, making up 15% of total US trade. FYI: Outgoing President Andrés Manuel López Obrador (#AMLO) is also in the Morena party, but he didn't previously have a supermajority.
AMLO's parting gift… Obrador will have over a month in office with a pro-Morena congress during which he could push through proposals that had been stalled or blocked. One political analyst said it would be "the most revolutionary month that Mexico has experienced in this century." A couple of constitutional changes that could affect businesses include the elimination of autonomous biz regulators (the gov't would take on that role) and legislation that could promote state utility services (like electricity) over privately run ones. | | THE TAKEAWAY |
| Investors love (trying) to predict global policy… A congressional supermajority could throw the scales in Mexico, potentially introducing an era of economic policy that strains economic ties with the US. But investors don't always see political dominance as a bad thing: Indian stocks dropped this week after Prime Minister Narendra Modi, seen as pro-business, won reelection by a narrower-than-expected margin. | |
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What else we're Snackin' | Library: Shutterstock's image-licensing deals with genAI makers including OpenAI, Meta, and Alphabet scored it $104M in sales last year. Its CEO expects $250M by 2027 from licensing pictures to train AI. Plant: Cannabis co Green Thumb reportedly sent a letter to Sam Adams maker Boston Beer pitching a merger. Pot's been hot as fewer Americans are drinking booze, but a deal could be tricky since weed is illegal under US federal law. Swerve: Elon Musk is said to have diverted $500M+ in Nvidia AI chips reserved for Tesla to X and xAI (his AI company). Yesterday, Musk said Tesla plans to spend at least $3B on Nvidia hardware this year. Headline: The CFO of conservative news org Epoch Times was charged with laundering $67M+ in illicit funds, which spiked the company's revenue by 5x. Meta had banned the biz from buying ads in 2019. PC: Best Buy shares have spiked as it clears its shelves for AI. Last week, the OG electronics retailer said it had stocked 40 AI-equipped laptop models from Microsoft, Dell, HP, Lenovo, and Samsung.
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Snack Fact Of the Day | With 271M+ subscribers, MrBeast is now the most followed YouTube channel | | |
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Wednesday | ADP private payrolls data World Environment Day Global Running Day Earnings expected from Dollar Tree, United Natural Foods, Campbell's, Lands' End, Lululemon, and Victoria's Secret
Authors of this Snacks own shares of: Alphabet, Apple, Microsoft, Nvidia, and Tesla | |
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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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