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Busy week on Wall Street (Mario Tama/Getty Images)
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Dow Jones
33,886 (+1.20%)
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S&P 500
4,138 (+0.79%)
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Nasdaq
12,123 (+0.29%)
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Bitcoin
$30,474 (+8.67%)
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Hey Snackers,
AI is coming for your future — literally. The fortune-cookie industry is debating
whether
to
use ChatGPT, instead of humans, to draft those little snippets. One AI-generated bit of
wisdom said: “Your fate is written in the stars and encrypted in the clouds.” That’s deep…
learning.
Stocks ticked up for the week, led by the Dow, after some big banks kicked off earnings
season with stronger-than-expected #s. But major indexes dipped on Friday as Fed rate-hike
expectations jumped. Traders are no longer betting on a breather in May.
Btw... Do you want to start getting Snacks
daily? Or prefer to unsubscribe? Manage your
subscription preferences here
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SZN
Earnings-season forecasts are dim for America’s biggest companies as profits get pressured
’Tis the season… but it may not be so jolly. Earnings season is upon us, and
expectations aren’t high for the first-quarter stocking. Quarterly profits from S&P 500
companies are expected to have dropped 6.8% from last year — that would be the sharpest earnings
decline since lockdown-era 2020 and the second straight quarter of falling profit. Meanwhile,
analysts expect that sales inched up a measly 1.8%. But the kickoff to earnings season pleasantly
surprised:
-
Bank buster: on friday
JPMorgan Chaseand
Citi reported stronger-than-expected #s, with JPM posting record revenue and a
50% profit surge on higher interest rates.
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Stocking stuffer: Despite less-than-stellar earnings expectations, the S&P
500 is up 8% for the year, while the techy Nasdaq has gained 17%.
Growth at all costs < profit at less cost... Soaring interest rates
and
sticky inflation have eaten into profits and cooled demand. Cue: companies are shifting away from
growth-driven investments to focus on cost-cutting profit boosters. It’s “the year of efficiency,”
Meta CEO Zuck says. Corporate titans are tightening their belts to prep for a downturn. Last week
the Fed said it expected that the banking-crisis fallout would tip the US into a recession this
year.
surprised:
-
Cold-brew cuts: In addition to sweeping layoffs, companies like Meta
Goldman Sachs and
Salesforce have cut cushy employee perks like barista-brewed coffee.
Google is swapping pricey MacBooks for Chromebooks.
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Robo-savings: Companies like Disney and
Microsoft are backtracking on big bets like the metaverse. Instead,
corporations are investing in things that could reduce costs long term (think:
Walmart and Amazon leaning into warehouse automation).
 THE
TAKEAWAY
"How low will you go” is the question… on investors’ lips. They’ll be listening
for guidance about how much lower corporate profits could fall. If companies signal further
declines ahead, this year’s rally could reverse. But if cost-cutting measures start to show up on
earnings reports as improving profits, markets could be pleasantly surprised.
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Events
Coming up this week
Biscoff cookies en route to Cabo… United Airlines and Alaska Air
may have reason to join the spring-break party when they report this week. While US airline fares
are up 17% on the year, travel demand is still taking off. The TSA's expecting a record-breaking
year for flights, and analysts think this may be airlines' busiest spring ever. Last week Delta
unloaded a quarterly loss, but projected strong growth and profit ahead. It expects record advance
summer bookings as consumers prioritize delayed YOLO
experiences.
It’s finally here… Tuesday is the deadline to file tax returns for most Americans
(many residents of CA, GA, and AL have until October). And it may be the last go-around for what
you could call “IRS 1.0.” Over the next two years, the IRS will use billions in federal funding to
upgrade its ’60s-era tech and hire 20K new employees. For you: faster returns and shorter phone
wait times. Next tax year, the IRS will require anyone earning $600+ on payment apps (for goods
and services — not from splitting checks) like Venmo to report it.
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zoom
out
Stories we’re watching
An apple a day… keeps the bills away. More Americans could see a boost in their
credit scores after credit agencies scrapped 70% of all medical debt in collections. Last year,
keeps the bills away. More Americans could see a boost in their credit scores after credit
agencies scrapped 70% of all medical debt in collections. Last year, keeps the bills away. More
Americans could see a boost in their credit scores after credit agencies scrapped 70% of all
medical debt in collections. Last year, Experian, TransUnion,
and Equifax removed already paid
medical debt from millions of credit reports. Last week they took it a step further by removing
all unpaid debt up to $500. Nearly a tenth of US adults owe at least $250 in medical debt, but
many don’t notice until it dings their credit score. The move could provide relief at a time when
US households carry record debt.
It’s finally here… Votes will be counted today to see if the Writers Guild of
America will strike in the event that a new contract agreement isn’t reached with studios by May
1. If the WGA strikes, we could see a repeat of the last screenwriting stoppage in 2007, which
lasted 100 days. On the table: shortened TV seasons, cancellations, and a bump in unscripted
content (imagine: more “Love Is Blind”). A strike would be a headache for streamers who are hungry
for the next “Succession.” They’re expected to splurge $23.4B on scripted titles this year.
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ICYMI
Last week's highlights
-
Stuck: Amazon's $1.7B deal to buy Roomba maker
iRobot is
gathering
dust
as the FTC gets
tougher on mergers. As antitrust gets anti-er, companies might think twice before snagging
startups.
-
Oops: Samsung $1.7B deal to buy Roomba maker
iRobot is
workers reportedly leaked secret company info while asking ChatGPT for help. Nearly half of
companies (and the Biden admin) are exploring guidelines for AI-chatbot usage.
-
Volt: Tesla's $1.7B deal to buy Roomba maker
iRobot is
Tesla's building a Shanghai “Megapack” plant to build more energy-storage solutions for
businesses and homes. Rising energy demand could fuel Elon’s biz as EV growth slows.
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What else we're Snackin'
-
RTO: Niche consultants attempting to get WFH’ers back to
the office without a morale plunge are imploring execs to ditch return-to-office mandates in
favor of communal perks like yoga and lunch.
-
Emote: Lots of young Chinese men have grown emotionally attached
to AI companions
like Microsoft's spinoff Xiaoice, which had 650M users in 2018. Robo-romances could give China a
leg up in the AI race.
-
Exhausted: The EPA’s new pollution-standards proposal that seeks
to limit tailpipe
emissions could speed up the EV transition. It would require up to 67% of all new cars sold in
the US to be electric by 2032.
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Snack Fact Of the Day
In nearly half of US marriages, women earn about the same as their spouse — or more
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This Week
-
Monday: Earnings expected
from
Charles Schwab
-
Tuesday: Tax Day. Earnings expected from
United
Airlines,
Bank of America, BNY Mellon, Johnson & Johnson, Goldman Sachs, and
Lockedheed Martin
-
Wednesday: Earnings expected from
UMorgan Stanley, Ally Financial, Citizens Financial, and
Abbott
-
Thursday: Earnings expected from
AT&T, TSMC, American Express, Alaska Air, and Union Pacific
-
Friday: Tax Day. Earnings expected from
Earnings expected from, Procter & Gamble
Authors of this Snacks own shares: of Amazon, Alaska Air, Google, Delta,
Disney,
Tesla, Microsoft,
and Walmart
ID: 2848334
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Delta’s
delayed
YOLO
The great rate-hike divide
ChatGPT clocks in
