April 23, 2021
🔔 The dashboard: The S&P 500 closed up 1%.
- Biggest gainer? Silicon Valley Bank parent SVB Financial (+9%). It predicted stronger loan growth for the full year.
- Biggest decliner? Kleenex maker Kimberly-Clark (-6%). The pandemic-spurred stocking up boom is fading, per its earnings report.
Today's newsletter is 669 words, or a 2½-minute read.
1 big thing: The transit rider rebound
A return-to-normal gauge to watch is mass transit ridership, which continues to creep higher in parts of the country as people get vaccinated and emerge from lockdown.
- But check out the chart above: It's still well below pre-pandemic levels, Axios' Andrew Witherspoon and I report.
Why it matters: Ridership return is key for the big city systems — think San Francisco or New York — that are more reliant on fares for revenue.
- Other transit systems rely primarily on a variety of funding sources, like sales tax (which also took a pandemic hit).
Flashback: City and state financials aren't as dire as expected initially when the pandemic first hit, thanks to government stimulus and the nature of the recovery, says Cooper Howard, a municipal strategist at Charles Schwab.
- "The better the fiscal situation for the state or city, the more flexibility they have to provide support to that transit agency," Howard says.
Worth noting: Car trips in New York City are much closer to pre-pandemic levels, according to MTA bridge and tunnel figures.
- Bus ridership in NYC has also recovered faster than the subway.
What to watch: If riders don't return — or do so with less frequency — thanks to holdover pandemic habits. (Though some essential workers have relied on public transit all along.)
- More work from home or permanent relocation to suburban areas could cause a small but permanent drop in transit ridership, per a recent Moody's report on systems in New York, France, London and British Columbia.
- But forever drop-offs in those areas could be mitigated by "new transit users from population and business growth as well as new infrastructure capacity."
Bonus return-to-normal indicator: pet sitting
New bookings on pet sitting and dog walking app Rover hit the highest level since 2019 in the final week of March.
- There are requests for longer spells of care: roughly 4 nights last quarter, the same as Q1 2019.
What's going on: People are starting to travel again and thus need pet sitting. Another factor: the pandemic puppy adoption boom.
- "We're not only seeing a spike in puppies with new customers we're acquiring. We're also seeing existing customers adding a second or third profile [for pets] on our system too," says Rover CEO Aaron Easterly.
The intrigue: Rover is going public via a SPAC deal that values the company at $1.35 billion.
- The company was crushed by the pandemic. Revenues were cut in half last year, its filing shows.
2. Charted: No shortage of shortage talk
Media mentions of global shortages are at a record high, according to a Bank of America analysis.
The backstory: Companies said the global shipping container crunch (which has since eased) and the ongoing chip shortage wreaked havoc on supply chains.
But, but, but ... "'[H]ot topics' might get over-reported in the news. This could prolong coverage of inventory shortages even after they have been resolved," BofA notes.
3. What's moving
💲 An index measuring the health of the U.S. service sector hit a record high. (WSJ)
4. 📺 Oscars watch: Viewership (maybe) down, ad revenue up
Axios' Sara Fischer reports: Viewership for Sunday's 93rd Academy Awards is expected to nosedive following a turbulent year for movie studios and theaters.
- Viewership for live TV events, especially award shows, has dropped during COVID-19.
Yes, but: That doesn't mean ad revenues will plummet.
- The Oscars are typically the most-watched entertainment event on live TV.
- Even a shrinking audience is better than most other marketing opportunities for brands, which gives ABC — the network it airs on —leverage to keep ad rates high.
- ABC is reportedly seeking around $2 million for a 30-second spot this year, per Variety. It sold out ad inventory.
The big picture: With limited theatrical releases and production on pause, movie studios cut back dramatically on marketing this year. That means viewers are less likely to be familiar with the films up for nominations.
5. What they're saying ⚽️
“It is clear we misjudged the magnitude of feeling that this deal would create, and we will learn from this experience as a company. ... In the end, football fans were heard loud and clear, and that’s what matters most.”— JPMorgan co-president Daniel Pinto. The company apologized for its planned financing of the breakaway, controversial, and now-dead Super League.
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