Axios Closer

Picture of a golden bell on a white background.
January 28, 2022

☃️ We made it. Stay safe from the storms this weekend, and let's cut our weather forecasters a break.

Today's newsletter, edited by Pete Gannon, is 686 words, a 2½-minute read.

🔔 The dashboard: The S&P 500 closed up 2.4%, largely behind positive earnings led by Apple.

  • Biggest gainer? Visa (+10.6%) on strong first-quarter earnings.
  • Biggest decliner? Western Digital (-7.3%) on a disappointing outlook.

1 big thing: What goes around comes around

Illustration of a penny as a button.  
Illustration: Aïda Amer/Axios

Workers held more power over their employers last year than ever before, but that still hurt them in the end, Hope writes.

Why it matters: Higher wages and benefits that workers received are quickly getting passed back down to them in the form of price hikes that companies say they have to enact to keep profits growing.

Driving the news: Employers paid 4% more in wages and benefits in 2021 than 2020, according to the Employment Cost Index out today.

  • Yes, but: Growth in the last part of the year was below what analysts expected, as noted by Axios chief economic correspondent Neil Irwin.
  • Meanwhile, prices grew 4.9% last year, per the core PCE index (the Fed’s preferred measure of inflation), also released today.

The rub: Some business leaders who have complained about labor shortages have seen their pay grow exponentially greater than their workers' pay, according to a new study from Accountable.US shared first with Axios.

  • Overall, in 2020, the ratio of CEO-to-worker compensation was 351-to-1 under the realized measure of CEO pay, up from 307-to-1 in 2019, according to the Economic Policy Institute.

What they’re saying: Workers were hurt in the first phase of the pandemic, when more than 20 million people lost their jobs, and they're now facing this second phase where inflation growth will remain higher than pay growth this year, Nicholas Economides, professor of economics at the Stern School of Business, tells Axios.

What to watch: The Fed has made fighting inflation one of its main goals this year.

2. Charted: Thx 4 the meme-ories

Data: Yahoo! Finance; Chart: Sara Wise/Axios

Like a baby growing into an adult, meme stocks are confronting the reality of life after they’re no longer the center of attention, writes Nathan.

Driving the news: This week is the one-year anniversary of the meme stock revolution's beginning.

  • Retail traders organized in communities like Reddit’s WallStreetBets message board to drive up shares of struggling companies in an effort to force Wall Street to suffer losses on short bets.

The bottom line: Meme stocks aren’t dead. But they’ve settled down.

3. What's happening

✈️ More than 4,100 flights were canceled in the Northeast tonight and Saturday ahead of a major winter storm. (CNBC)

👨‍💻 Decentralized finance company Qubit Finance openly pleaded with a hacker who stole $80 million of digital assets by exploiting a blockchain extension. (Bloomberg)

🕹 Pokémon Legends: Arceus, the latest in the hit Pokémon game series, was released today on Nintendo Switch. (Axios Gaming)

4. Apple's supply chain wizard

Apple CEO Tim Cook attends the grand opening event of the new Apple store at The Grove on November 19, 2021 in Los Angeles, California.
Apple CEO Tim Cook on Nov. 19, 2021, in Los Angeles. Photo: Mario Tama/Getty Images

Apple CEO Tim Cook marked 10 years on the job last year — a leadership choice that paid off during one of the most challenging business environments in modern history, Hope writes.

Why it matters: Apple outmaneuvered supply chain problems, thanks to its focus on speed and supplier control, to come away with record results last quarter. Cook noted that issues were easing, while comparable large manufacturers like Tesla and Caterpillar this week warned of negative impacts ahead.

Catch up quick: The company reported record revenue and earnings during its all-important holiday quarter yesterday. 

  • Sales growth for each of Apple’s products was positive with the exception of the iPad, despite the company's warning in the fall that supply issues could harm results, per CNBC.
  • In China, Apple regained its top smartphone market share position for the first time in six years.

Flashback: Cook was Apple’s COO, in charge of the company’s global supply chain and sales, prior to being named CEO in August 2011.

5. New emoji mood pack 😻

melting face emoji, tearful joy emoji, lip biting emoji,
New emojis out now in the iOS 15.4 beta. Credit: Emojipedia

If a picture is worth a thousand words, I’d argue an emoji can prevent a thousand fights, Hope writes. 

  • Nearly 40 new emoji with dozens of skin tone additions are coming as part of the next iOS update … just in time to mark the start of year three of [gestures at everything] whatever this is.
  • There are seven new smileys, including a melting face and a face holding back tears, for example. 
  • Perhaps equally appropriate for this in-between phase of the world we’re in are emoji for a drained battery and an empty glass jar. 

6. What they're saying

"DONDA2 COMING 2 22 22"
— Ye, the rapper formerly known as Kanye West, announced the release date for the sequel album to his 2021 "Donda," on Instagram.