👟 Sneaker showdown

…and Netflix and Amazon go on a content spree

Nike's step back (Jeremy Moeller/Getty Images)

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Yesterday's Market Moves   Dow Jones 39,170 (+0.13%) S&P 500 5,475 (+0.27%) Nasdaq 17,879 (+0.83%) Bitcoin $63,056 (+0.62%) Dow Jones 39,170 (+0.13%) S&P 500 5,475 (+0.27%) Nasdaq 17,879 (+0.83%) Bitcoin $63,056 (+0.62%)

Hey Snackers, Bug spray, check. Swimsuit, check. $70 Drunk Elephant face cream? Summer camp counselors are telling kids to leave their Sephora hauls at home as Gen Alpha spends its allowance on viral skin care. Don't #GRWM in the bunks. Stocks ticked up yesterday ahead of the short trading week. Investors sold off US government bonds as election szn nears, pushing up Treasury yields. Over in econ data, American manufacturing slumped for a third straight month. On Friday we'll get the June jobs report. 🇺🇸 P.S. US stock markets close early tomorrow ahead of the Independence Day holiday, so we'll be back in your inbox on Friday. Happy Fourth!

TRIPPING

Legacy sneaker brands like Nike lose their footing as fresher rivals step up Just do better… Nike may be losing its swoosh factor. The shoe star's stock had its worst day ever on Friday, wiping out $28B in market cap, after the company forecast that sales would drop 10% this quarter. Sales have cooled, and the AF1 maker announced in February that it would cut jobs as part of a $2B cost slashing. Nike's core sneaker brands have long been a cash cow, but the retailer's scaled back supply as the Jordan and AF1 hype fades. Sole searching: Nike's outlet stores (which sell swoosh-branded shoes and clothes at a discount) have also seen slower traffic as shoppers cut back on nonessentials. Now Nike plans to roll out $100-and-under kicks to win back some points. Footwear faceoff… Nike is still the world's most valuable shoe maker, but rivals are stepping up their game. "Chunky shoe" faves like Hoka (owned by Uggs parent Deckers), Asics, New Balance, and Roger Federer-backed On have gained traction. Nike competitors made up 35% of the global sports-footwear market last year, up from 20% in 2020. And Nike's market share (35%) has been sliding since 2021. Adidas has also seen a US sales slump. Gen Z and millennials have led the sneaker switch-up, favoring trendier rivals over legacy logos. While Nike remains the top footwear brand for US teens, it's losing points to the likes of Hoka and On. THE TAKEAWAY Innovation's outpacing icons… Industry-defining brands are scrambling to keep up with trends as social media transforms the fashion landscape. Nike's CEO said it was hard to make a "boldly disruptive shoe" during the pandemic. It's not just sneakers: Lululemon, once the athleisure go-to, is the second-worst performing S&P 500 stock this year as rivals like Alo and Vuori stretch into the space. Read this online

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STILLWATCHING

Netflix and Amazon ordered half of all streaming content in Q1 as Hollywood survives till '25 EXT. Hollywood — DAY… Streamers' budgets haven't faded to black. New research found that Netflix and Amazon accounted for 53% of all original streaming content orders in the first quarter. Netflix commissioned 200+ new shows and movies in Q1 (its most in three years), and Amazon nabbed 140 (a record for Prime Video). Rivals like Disney, Apple, and Warner Bros. Discovery ordered far fewer, continuing a trend of studios slashing content budgets. Location scouting: Most of the orders were international. Amazon commissioned nearly 40 productions from India — more than in its past six quarters combined. Money calls action: Netflix and Amazon have $$ to spend. Their stocks are both up about 50% over the past year, and Netflix last year raked in $5B in profit. The dim-screen era… In the "peak TV" days of 2022, ~600 shows premiered in the US (triple the # from 20 years earlier). But later that year, Wall Street turned on streaming's unprofitable strategy, and entertainment biggies started slashing costs. Last year's Hollywood strikes made matters worse, and Netflix cut 100+ shows. Nearly all major streamers have sharply pulled back on originals, shifting to more cost-effective licensing agreements (think: "Grey's Anatomy" on Netflix). Just keep filming: It's been rough for entertainment workers. Between August 2022 and the end of last year, film and TV employment fell 26%. Global production is down 7% this year, and "survive till '25" has become an oft-heard phrase in Hollywood. THE TAKEAWAY Every peak has a valley… but neither lasts forever. Netflix's and Amazon's content sprees suggest Hollywood could be emerging from its cost-slashing era. Also a good omen: Hollywood's 50K-member crew union reached a tentative agreement with studios last week, averting another strike. More studios could soon crack their content wallets open again. Read this online

What else we're Snackin' Block: EU regulators charged Meta with failing to comply with digital competition rules. At issue: Meta's ad-free Insta and FB subscription in Europe, which makes users pay to use the apps or consent to ads. Board: Boeing said it'll buy Spirit AeroSystems, a key parts supplier, for $8.3B to try to bring manufacturing in-house. Meantime, the DOJ is said to be poised to charge the planemaker with criminal fraud. Joy: Disney's "Inside Out 2" became the first film to top $1B at the global box office since "Barbie." The animated flick is the highest-grossing movie so far this year, a welcome boost for struggling Pixar. Slurp: Redbox parent Chicken Soup for the Soul Entertainment filed for bankruptcy. It's unclear whether that will affect its 27K DVD-rental kiosks across the US (the biz's book-publishing arm is unaffected). BitOff: Keith "Roaring Kitty" Gill last week disclosed ownership of 9M Chewy shares. The meme-stock investor bought a chunk of those before he posted a dog pic on X, after which Chewy's shares soared.

Snack Fact Of the Day Google searches for "smash burger" have 10x'd since 2020 Read more

Tuesday US job openings Earnings expected from MSC Industrial Direct Authors of this Snacks own shares of: Amazon, Apple, Disney, and Warner Bros. Discovery

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