1 big thing: No real holiday from gas tax pause

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2. Bonus chart: How much you'd save

3. What's happening

4. Twitter pushes deal as Elon hedges

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5. Top trending types of Reels

6. What they're saying

☀️ Welcome to summer! Don't forget the sunscreen. It's hot out there.

🔔 The dashboard: The S&P 500 rocketed 2.5% as investors try to put the bear market behind them.

Biggest gainer? Tesla (+9.5%), which tracked a rally in tech stocks.

Biggest decliner? DaVita (-15%), which tumbled on the heels of a Supreme Court ruling that went against the company.

Today's newsletter, edited by Javier E. David, is 618 words ... a 2-minute read.

Thank you to Sheryl Miller for copy editing our newsletter!

National

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Catch up on the day's biggest business stories and look ahead to important trends. Led by Hope King and Nathan Bomey.

Axios Closer

1 big thing: Juul e-cigarettes go up in smoke

Illustration of a juul device forming a "no" symbol with a cloud of vapor around it

2. Charted: Revlon's bankruptcy bump

4. EVs still out of reach despite gas spike

Illustration of an electric vehicle plugged in, the charging wire has dollar bill signs running inside of it towards the car. 

5. Good bye "aroni"

Kraft's new look for its macaroni and cheese.

Hello! There was lots of news about gas prices today, and Axios Macro has you covered.

Today's newsletter, edited by Pete Gannon, is 694 words, a 2½-minute read.

🔔 The dashboard: The S&P 500 closed down 0.1%.

Biggest gainer? DaVita (+6.0%), rebounding after yesterday's losses, but still down almost 12% following an adverse Supreme Court ruling over dialysis coverage.

Biggest decliner? Biggest decliner? Altria Group (-9.2%), following the FDA's decision on Juul, of which Altria owns a 35% stake (see below).

Thanks to Sheryl Miller for copy editing today's (and every day's) newsletter.

1 big thing: Baby formula profit boom

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2. Charted: Slim recession stock gains

4. FBI's crypto warning for LinkedIn users

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5. Dads' gift to us

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Welcome to the weekend. 😎 Programming note: Axios AM and PM will send as usual on Juneteenth, although our other newsletters (including this one!) will be off as we observe the new federal holiday.

🔔 The dashboard: The S&P 500 ended its worst week since 2020 on a marginally high note, up 0.2%.

Biggest gainer? Norwegian Cruise Lines jumped by over 10%, partly reversing a bear market for cruise operators.

Biggest decliner? Diamondback Energy fell 8.2%, as bearish bets engulfed the stock.

Today's newsletter, edited by Javier E. David, is 664 words ... 2½ minutes.

Thanks to Amy Stern for copy editing today's newsletter.

1 big thing: Roe decision reverberates

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2. Bonus chart: State of play

4. Juul gets temporary stay

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5. What they're saying

Today's newsletter, edited by Pete Gannon, is 670 words, a 2½-minute read.

🔔 The dashboard: The S&P 500 closed up 3.1% Friday, capping a 6.5% gain for the shortened holiday week.

Biggest gainer? Royal Caribbean (+15.8%), cruising on the wake of a positive business update from rival Carnival.

Biggest decliner? Verizon Communications (-2.2%). ¯\_(ツ)_/¯

1 big thing: Airlines cry uncle

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2. Bonus chart: Your flight has been canceled

4. Netflix still confident

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5. Event season upside

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🥵 Happy Thursday! If you're turning down the air conditioning to save money this summer, you're not alone. Bed Bath & Beyond is apparently doing the same thing.

Today's newsletter, edited by Pete Gannon, is 690 words, a 2½-minute read.

🔔 The dashboard: The S&P 500 closed up 1.0%.

Biggest gainer? Autodesk (+8.4%). ¯\_(ツ)_/¯

Biggest decliner? Mosaic (-9.6%), leading a tough day for fertilizer stocks.

A suspension of the federal gas tax would deliver a degree of relief at the pump, but don't expect a windfall of savings.

Why it matters: Drivers have been reeling from $5-a-gallon gas — more in some states — at a time when other prices have also been soaring.

President Biden is weighing a suspension of the 18.4-cent-per-gallon tax, which has been steady for 29 years, and contributes to the Highway Trust Fund.

The big picture: The average driver of a large SUV — one of the most popular vehicle types in the country — would save about $4.60 a week, according to calculations by GasBuddy.

That's about $239 a year, though it's hard to envision the gas tax suspension lasting that long.

Altogether, it would equal savings of about $70 million per day for American drivers, GasBuddy analyst Patrick De Haan tells Axios.

The impact: Based on $5 gas, a gas tax holiday would equal savings of less than 4% per gallon.

Yes, but: Cheaper gas could have a countervailing effect by increasing demand and then driving retail prices back up, De Haan warns.

The nation's gasoline refinery capacity is already straining to keep up with demand. U.S. domestic gasoline stocks fell by 700,000 barrels to 217.5 million last week. 

A tax suspension "could exacerbate the imbalance between supply and demand that has led us to record high prices," De Haan says.

Keep in mind: Suspending the gas tax would also deprive the nation's infrastructure of critical dollars for improvements.

The bottom line: A federal gas tax holiday might gather bipartisan support in Washington, but it won't make a big dent at the pump.

Gas tax pause no real holiday for cash-strapped drivers

The federal gas tax of 18.4 cents per gallon could be suspended, but don't expect to save much.

Gasoline

A suspension of the federal gas tax would deliver a degree of relief at the pump, but don&#x27;t expect a windfall of savings.Why it matters: Drivers have been reeling from <a class="gtmContentClick" data-vars-link-text="$5-a-gallon gas" data-vars-click-url="https://www.axios.com/2022/06/20/us-average-gas-prices-july-4" data-vars-content-id="16f029eb-986a-4067-bc49-067a75da729a" data-vars-headline="Gas tax pause no real holiday for cash-strapped drivers" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2022/06/20/us-average-gas-prices-july-4" target="_self">$5-a-gallon gas</a> — more in some states — at a time when other prices have also been soaring.<ul><li><a class="gtmContentClick" data-vars-link-text="President Biden" data-vars-click-url="https://www.axios.com/politics-policy/joe-biden" data-vars-content-id="16f029eb-986a-4067-bc49-067a75da729a" data-vars-headline="Gas tax pause no real holiday for cash-strapped drivers" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/politics-policy/joe-biden" target="_self">President Biden</a> is weighing a suspension of the 18.4-cent-per-gallon tax, which has been steady for 29 years, and contributes to the Highway Trust Fund.</li></ul>The big picture: The average driver of a large SUV — one of the most popular vehicle types in the country — would save about $4.60 a week, according to calculations by GasBuddy.<ul><li>That&#x27;s about $239 a year, though it&#x27;s hard to envision the gas tax suspension lasting that long.</li><li>Altogether, it would equal savings of about $70 million per day for American drivers, GasBuddy analyst Patrick De Haan tells Axios.</li></ul>The impact: Based on $5 gas, a gas tax holiday would equal savings of less than 4% per gallon.Yes, but: Cheaper gas could have a countervailing effect by increasing demand and then driving retail prices back up, De Haan warns.<ul><li>The nation&#x27;s gasoline refinery capacity is already straining to keep up with demand. U.S. domestic gasoline stocks fell by 700,000 barrels to 217.5 million last week. </li><li>A tax suspension &quot;could exacerbate the imbalance between supply and demand that has led us to record high prices,&quot; De Haan says.</li></ul>Keep in mind: Suspending the gas tax would also deprive the nation&#x27;s infrastructure of critical dollars for improvements.The bottom line: A federal gas tax holiday might gather bipartisan support in Washington, but it won&#x27;t make a big dent at the pump.

After a record economic expansion, the coronavirus pandemic sent the U.S. economy into a recession as unemployment soared to staggering heights. The country now faces urgent questions about how much stimulus is needed for reeling consumers and businesses, and what a recovery might look like.

Economy & Business

Airlines are crying uncle. Reeling from staffing shortages, they are responding to a sudden upswing in demand by cutting flights and reducing their commitments to regional airports.

Why it matters: Americans are eager to travel again, and regional airports make it easier to reach some of the nation's far-flung hotspots.

Driving the news: American Airlines said Wednesday it plans to end service to Islip, New York; Ithaca, New York; Toledo, Ohio; and Dubuque, Iowa. 

And United Airlines is cutting 50 flights a day from Newark Liberty International Airport in New Jersey — a major hub for New York City area travelers.

30 airports have lost "at least half the departures they had in 2019," the Wall Street Journal reported earlier this month.

JetBlue and Spirit Airlines previously announced cuts to their summer schedules.

What they're saying: "The big loser, if you will, in the whole shakeout are folks who either live in small communities or are traveling to small destinations," Scott Keyes, founder of Scott's Cheap Flights, tells Axios. 

By the numbers: Airlines canceled 793,018 flights in North America in the first 23 weeks of the year, up 21% from the same period in pre-pandemic 2019, according to flight data tracker OAG.

There were 5,883 delays on Wednesday alone on flights within, into or out of the U.S., according to FlightAware.

Transportation Secretary Pete Buttigieg last week warned that his department could pursue enforcement action against airlines that don't adhere to consumer protection standards.

State of play: Airlines say they're straining to keep up in part because they don't have enough staff to deal with a surge in leisure travelers.

"I really want to underscore how drastic of a step it is to cut flights from a summer schedule," Keyes says. "It would be akin to Walmart saying we’re not going to open on Black Friday. To see them trimming the schedule in these summer months really underscores what a difficult position they’re in."

Yes, but: The airline industry had 751,165 employees as of April, according to the Department of Transportation, up from a pandemic low of 673,663 in November 2020.

That's the second-highest monthly total in the last 21 years, trailing only February 2020’s 753,382.

Keep in mind: TSA is also straining to keep up with the increase in travelers as it deals with the sort of labor shortages that other employers are grappling with.

"It’s just an ongoing train wreck," Keyes says.

The bottom line: Brace yourself for travel disruption this summer.

Summer travel mess: Flight cancellations pile up as airlines struggle to keep pace

Airlines are increasingly reducing flights to regional airports and canceling other flights as they deal with staffing shortages and increased bookings.

Airlines

Airlines are crying uncle. Reeling from staffing shortages, they are responding to a sudden upswing in demand by <a class="gtmContentClick" data-vars-link-text="cutting flights" data-vars-click-url="https://www.axios.com/newsletters/axios-whats-next-84baebb5-ea55-4c28-9583-aee5371d0a20.html" data-vars-content-id="4705b2d6-671b-4831-bbd1-39dba0e18216" data-vars-headline="Summer travel mess: Flight cancellations pile up as airlines struggle to keep pace" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/newsletters/axios-whats-next-84baebb5-ea55-4c28-9583-aee5371d0a20.html" target="_self">cutting flights</a> and reducing their commitments to regional airports.Why it matters: Americans are eager to travel again, and regional airports make it easier to reach some of the nation&#x27;s far-flung hotspots.

Widespread baby formula shortages have bolstered the profit margins of the product's manufacturers.

Why it matters: Families have been scrambling to find formula for their babies since a massive recall in February — and now they’re paying more for it, too.

Driving the news: The industry’s profit margin has jumped from 11.6% in 2021 to an estimated 14.2% in 2022, the highest point since 2015, according to new IBISWorld data provided to Axios.

“While the COVID-19 pandemic disrupted supply chains and caused input costs to increase, high demand for formula and high market share concentration have allowed manufacturers to increase prices and maintain profit,” IBISWorld said in the June report.

State of play: Between March 2021 to May 2022, baby formula prices jumped by an average of 11%, according to an analysis of a dozen major retailers — including Kroger, Amazon and Costco — conducted by DataWeave.

Four companies like Abbott Laboratories, Mead Johnson, Perrigo and Nestle accounted for more than 87% of the market, according to IBISWorld.

Of note: Officials with all four companies did not respond to requests seeking comment. But industry leaders have acknowledged that the mad rush to buy formula has boosted the bottom line.

“We also are benefiting this year from, frankly, a terrible situation … and I need you to know that Perrigo is part of the solution, not part of the problem,” Perrigo CEO Murray Kessler said Wednesday at a conference, noting the company had increased production to help meet demand.

Yes, but: Baby formula price increases had started before the Abbott Nutrition recall, according to DataWeave.

Manufacturers have been dealing with extra costs associated with raw materials, labor and distribution, all contributing to the industry’s broader inflation crisis.

Baby formula shortages boost profit margins

While shortages have tormented parents, baby formula makers are recording higher profit margins.

Profits

Top Stories

Widespread <a class="gtmContentClick" data-vars-link-text="baby formula shortages " data-vars-click-url="https://www.axios.com/2022/05/11/fda-baby-formula-shortage-abbott-nutrition-recall" data-vars-content-id="a2ccf87b-71c9-4575-9c6b-1953b5b93bfb" data-vars-headline="Baby formula shortages boost profit margins" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2022/05/11/fda-baby-formula-shortage-abbott-nutrition-recall" target="_self">baby formula shortages </a>have bolstered the profit margins of the product&#x27;s manufacturers.Why it matters: Families have been <a class="gtmContentClick" data-vars-link-text="scrambling to find formula" data-vars-click-url="https://www.axios.com/2022/04/29/families-struggle-baby-formula-shortage" data-vars-content-id="a2ccf87b-71c9-4575-9c6b-1953b5b93bfb" data-vars-headline="Baby formula shortages boost profit margins" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2022/04/29/families-struggle-baby-formula-shortage" target="_self">scrambling to find formula</a> for their babies since a massive recall in February — and now they’re paying more for it, too.Driving the news: The industry’s profit margin has jumped from 11.6% in 2021 to an estimated 14.2% in 2022, the highest point since 2015, according to new IBISWorld data provided to Axios.<ul><li>“While the COVID-19 pandemic disrupted supply chains and caused input costs to increase, high demand for formula and high market share concentration have allowed manufacturers to increase prices and maintain profit,” IBISWorld said in the June report.</li></ul>State of play: Between March 2021 to May 2022, baby formula prices jumped by an average of 11%, according to an analysis of a dozen major retailers — including Kroger, Amazon and Costco — conducted by DataWeave.<ul><li>Four companies like Abbott Laboratories, Mead Johnson, Perrigo and Nestle accounted for more than 87% of the market, according to IBISWorld.</li></ul>Of note: Officials with all four companies did not respond to requests seeking comment. But industry leaders have acknowledged that the mad rush to buy formula has boosted the bottom line.<ul><li>“We also are benefiting this year from, frankly, a terrible situation … and I need you to know that Perrigo is part of the solution, not part of the problem,” Perrigo CEO Murray Kessler said Wednesday at a conference, noting the company had increased production to help meet demand.</li></ul>Yes, but: Baby formula price increases had started before the Abbott Nutrition recall, according to DataWeave.<ul><li>Manufacturers have been dealing with extra costs associated with raw materials, labor and distribution, all contributing to the industry’s broader inflation crisis.</li></ul>

The Supreme Court's official decision overturning Roe v. Wade has thrown businesses firmly into the spotlight.

The big picture: Since Texas enacted a law restricting abortions last September and the leaked court draft opinion early last month, companies have been forced to consider whether to speak out, bolster worker benefits or support organizations and politicians on either side of the issue.

Why it matters: Employees increasingly expect their employers to publicly embrace values that align with their own. 

Six in 10 U.S. adults (61%) believe the practice should be legal in "all or most cases," according to a survey from the Pew Research Center.

Driving the news: A handful of business leaders quickly spoke out against the ruling on Friday, decrying it as abusive to women and pledging to aid workers who need help accessing abortion care.

What they're saying: Among those who spoke out Friday:

Outgoing Facebook COO Sheryl Sandberg said, "I cannot believe that I’m going to send my three daughters to college with fewer rights than I had," adding that  the ruling "jeopardizes the health and the lives of millions of girls and women across the country."

Yelp CEO Jeremy Stoppelman said the ruling "threatens to dismantle the progress we’ve made toward gender equality in the workplace since Roe."

Mary Kay Henry, president of the Service Employees International Union, said she's "angered and disgusted," calling the opinion "reckless" and saying it caters to "corporate interests while rolling back the rights of working people."

Levi Strauss said: "Protection of reproductive rights is a critical business issue impacting our workforce, our economy, and progress toward gender and racial equity. Given what is at stake, business leaders need to make their voices heard and act to protect the health and well-being of our employees."

Dating app OKCupid called on Instagram for people to "act now by calling your representatives and demanding freedom and choice. We have no choice but to fight!"

Worth noting: Major companies that will reportedly help workers get from states where abortion isn't legal to states where it is now include Amazon, Apple, Citigroup, Dick's Sporting Goods, Disney, JPMorgan, Levi Strauss, Lyft, Microsoft, Starbucks, Uber and Yelp.

Of note: Others companies have been notably silent, potentially fearing backlash from the 37% of Americans who believe the procedure should be illegal in most or all cases.

Reality check: Money talks too. Companies will also be scrutinized for their contributions to political organizations that have fought abortion rights, which could run counter their public statements.

What we're watching: Whether companies begin making decisions about where to locate their operations and where to spend money based on local abortion laws.

Half the respondents in a quarterly survey of the CNBC CFO Council said their location decisions would at least be partially impacted by a state's restrictions, while only 20% said it would not factor in.

Businesses under pressure to speak out on abortion rights after Supreme Court overturns Roe v. Wade

After the Supreme Court overturned Roe v. Wade, businesses are facing pressure to speak out and provide abortion care benefits.

Abortion

The Supreme Court&#x27;s official decision overturning Roe v. Wade has thrown businesses firmly into the spotlight.The big picture: Since Texas enacted a law restricting abortions last September and the leaked court draft opinion early last month, companies have been forced to consider whether to speak out, bolster worker benefits or support organizations and politicians on either side of the issue.

 Data: S&P Global Mobility (formerly IHS Markit); Chart: Baidi Wang/Axios 

The surge in gas prices — and the Biden administration's proposed fuel tax holiday — illustrates how much we're still vulnerable to higher fuel costs despite the emergence of an increasingly popular alternative.

Why it matters: Electric vehicles eliminate the need for gasoline — but most people still don’t own one and can’t afford one.

Driving the news: President Biden on Wednesday proposed a three-month break from the federal government’s 18.4-cent-per-gallon tax on gas.

That would equal a 3.7% discount on the current national average price of $4.96. 

It would save the average pickup owner $66.24 over the three-month period, while the average compact car owner would save $26.52, according to GasBuddy.

The big picture: EVs provide an off-ramp from the fuel pump, but they’re expected to make up only about 1 in 20 new-vehicle sales in 2022, according to S&P Global Mobility.

The cost of raw materials needed to make EVs spiked from $4,109 in May 2017 to $8,255 in May 2022, according to AlixPartners.

“The problem is that EVs are very expensive, the prices are going up, electricity prices are going up and we still have charging infrastructure issues,” Autotrader analyst Michelle Krebs tells Axios. “And so they’re just out of reach for most people.”

Yes, but: Automakers are plunging investments into EV development and production — and AlixPartners expects EVs to account for 1 in 3 global vehicle sales by 2028.

Our thought bubble: Increased gas prices wouldn’t sting quite as much if Americans hadn’t transitioned from passenger cars to large SUVs and pickups in recent years.

Automakers like General Motors and Ford have largely eliminated their more fuel-efficient sedans and compact cars as consumers gravitated toward larger rides.

What we’re watching: Whether EV prices continue increasing or eventually level out. 

Electric vehicles won't help the spike in gas prices

The surge in gas prices — and the Biden administration's proposed gas tax holiday — illustrates how much we're still exposed to price spikes despite the emergence of EVs.

Electric vehicles

The surge in gas prices — and the Biden administration&#x27;s proposed fuel tax holiday — illustrates how much we&#x27;re still vulnerable to higher fuel costs despite the emergence of an increasingly popular alternative.Why it matters: Electric vehicles eliminate the need for gasoline — but most people still don’t own one and can’t afford one.

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Stories

Businesses under pressure to speak out on abortion rights after Supreme Court overturns Roe v. Wade

Summer travel mess: Flight cancellations pile up as airlines struggle to keep pace

Electric vehicles won't help the spike in gas prices

Gas tax pause no real holiday for cash-strapped drivers

Baby formula shortages boost profit margins

Newsletter editions

🏛 Seismic shift

✈️ Flight delay

🚭 Juul vaporized

⛽️ No real holiday from gas prices

💵 Baby formula boon