March 18, 2021
🔔 The dashboard: The S&P 500 fell 1.5%. Tech stocks got hit. Read on for more.
- Biggest decliner? Solar power company Enphase Energy (-9%), extending a streak of declines.
- Biggest gainer? Hartford Financial (+19), after reports of a possible takeover by insurance giant Chubb.
🏈 Situational awareness: The NFL says Amazon will get exclusive rights to air Thursday Night Football starting in 2023 through 2033. Go deeper.
Today's newsletter is 624 words, or a 2-minute read.
1 big thing: Shortages everywhere
From chips to jobs, the list of things we don't have enough of is getting longer.
Why it matters: It could put a drag on any economic comeback.
- In the case of the shortage of vaccines in Europe, it stalls a return to normal.
What's happening: There's a shortage of containers that carry products from abroad. Some are getting stuck at overloaded ports.
- It's slamming a range of industries that are jockeying for space to get products from overseas.
Then there's the chip shortage — the impact of which is spreading beyond the auto sector (which uses chips for things like navigation systems) to tech.
- Samsung warned of the "serious imbalance" this week.
Not helping: Texas-based chipmakers are coming back online after plants were shut down for weeks following the deep freeze that brought the state's economy to a halt.
- NXP Semiconductors said this week: "We understand the supply disruptions may impact our customers," while noting the company will take a $100 million hit because of the shutdown.
- Chemical plants were also pushed offline, causing a shortage in plastics, the Wall Street Journal reports.
What to watch: Companies are getting squeezed from all sides.
- Honda and Toyota said this week it's limiting production at factories across North America because of port backups, plus the lack of materials (chips, plastics) it needs to manufacture cars.
The big picture: "There's mass disruption after mass disruption," says Ethan Karp, who runs a manufacturing consultancy firm. It's a shift beyond pockets of shortages industries faced in the past.
How it ends: "Everybody is scrambling. We'll get through it, but there will be delays in some product availability and costs are going to be higher," Michael Crum, a supply chain management professor at Iowa State University, tells Axios.
The shortages extend beyond stuff.
- For example: There are roughly 9.5 million Americans still out of work compared to pre-pandemic levels. But there are only 6.9 million open jobs as pandemic-hit industries start to come back to life.
2. Charted: 💉 Back-to-work vaccine
The bottom line: Overall, just 18% of CFOs surveyed by Deloitte expect to require a COVID-19 vaccination in order to return to physical premises.
- 41% do not expect any vaccine requirements.
3. What's moving
📈 Familiar pattern: Tech stocks got knocked (again) as bond yields spiked. The U.S. 10-year Treasury note touched the highest level in 14 months. The Nasdaq closed down 3%. (Reuters)
🛢️WTI crude oil prices fell as much as 7% for its worst day since September. (CNBC)
👟 Nike's sales fell short of Wall Street estimates. The company blamed the 10% slump in North American sales on the port congestion. Shares slipped nearly 2% in late trading, after closing lower. (Press release)
👀 The SEC charged founders of the once-buzzy Silicon Valley startup uBiome for defrauding investors out of $60 million ... UBS values Kanye's "Yeezy" apparel business with Adidas and Gap as high as $4.7 billion, per Bloomberg obtained docs (paywall) ... Google will spend $7 billion in offices and data centers this year, less than in 2020 ... YouTube "Shorts" — its answer to TikTok — rolls out in the U.S. today.
4. Coinbase's "Reddit roadshow"
Axios' Kia Kokalitcheva reports: Coinbase is opting for a question-and-answer session on Reddit through Friday and a series of explainer videos — in lieu of a more traditional roadshow or livestreamed presentations for investors ahead of its public debut.
Why it matters: It's a nod to the cryptocurrency industry's roots in online forums and where many of its biggest enthusiasts still convene.
- Much about Coinbase's public listing is already unusual: It will be the first U.S. cryptocurrency company to become publicly traded. It'll also be the Nasdaq's first major direct listing.
- The company is said to be planning its listing for later this month.
5. Facebook's bet... on your wrist
Facebook researchers are rapidly learning how to replace mouse clicks and screen taps with finger twitches, Axios' Scott Rosenberg writes.
How it works: By picking up brain signals, Facebook's futuristic wristband can interpret small finger motions as, for instance, typing on an invisible keyboard or clicking on a button that isn't there.
6. What they're saying
"Compared to the previous stimulus rounds, which helped us, the economy is now opening up more. We are competing with other segments of the economy outside of retail for that share of wallet, so how much we get is uncertain."— John Garratt, CFO of Dollar General (a pandemic-era winner)
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