Axios Closer

April 28, 2022
😎 Welcome back! The economy is actually OK, Snapchat made a selfie drone, and the Biden administration released a regulatory proposal that would ban the sale of menthol cigarettes. All that and more below.
Today's newsletter, edited by Pete Gannon, is 612 words, a 2½-minute read.
🚨 Situational awareness: Amazon shares are down over 8% in extended trading after the company reported its slowest growth in about 20 years.
🔔 The dashboard: The S&P 500 closed up 2.5%, driven by a rebound in tech stocks.
- Biggest gainer? Meta Platforms (+17.6%), after reporting better than expected results for the second quarter.
- Biggest decliner? Align Technology (-15.5%), on disappointing results.
1 big thing: Consumers come through
Illustration: Sarah Grillo/Axios
Consumer demand continues to defy pressures on the economy, Hope writes.
Catch up quick: Overall U.S. GDP shrank at a 1.4% annual rate in the first quarter, the Commerce Department reported today.
- But within that figure, consumer spending remained strong, growing at a 2.7% rate.
Why it matters: The contraction — the first since the start of the pandemic — “shouldn’t be taken as a signal of heightened near-term recession risks,” JPMorgan chief U.S. economist Michael Feroli wrote in a note today.
- It should instead “reinforce concerns about the economy's longer-run growth potential.”
State of play: The factors that dragged down the economy were not directly related to consumer activity — suggesting that underlying growth remains strong for now, Axios’ Neil Irwin notes.
- Trade continued to drag on growth for the seventh straight quarter as exports fell unexpectedly.
- In response to last year’s overcorrection of inventory buildup to avoid 2020’s supply chain snafus, businesses continued to slow down their inventory stockpiles — and GDP counts that as a negative.
- When stripped of those two factors, the U.S. economy grew at a 2.6% rate last quarter, a slight uptick from the end of last year.
The big picture: Consumer spending continues to grow in part because demand has continued to move from goods to services.
- “The overall U.S. consumer from our vantage point is in good shape,” McDonald's CEO Chris Kempczinski said on this morning’s earnings call.
What to watch: JPMorgan doesn’t expect the Federal Reserve will “read much into today’s report” and cause it to come off its path of tightening.
- The negative headline number may, however, become a political liability for President Biden and the Democrats, Neil notes.
- Also, revisions. The advanced GDP report generally gets revised substantially.
2. Bonus chart: U.S. GDP

3. What's happening
📈 Fidelity plans to hire another 12,000 people to handle growth from a surge in individual investing. (WSJ)
📉 Robinhood monthly active users dropped by 8% last quarter. (CNBC)
🤷♂️ Twitter admitted to overstating users. (Axios)
🍏 Apple beat expectations with quarterly earnings. Its $97.28 billion in revenue set a record for the March quarter. (Axios)
4. Biden targets menthols ban
Photo Illustration: Drew Angerer/Getty Images
The Biden administration released a regulatory proposal that would ban the sale of menthol cigarettes in the U.S, Axios' Pete Gannon writes.
Why it matters: Menthols have accounted for a growing share of the cigarette market in recent years, now making up more than a third of all cigarettes sold.
- They are more difficult to quit than ordinary tobacco and are more popular with children and younger adults.
Details: If approved, the rules would ban the sale of both menthol cigarettes and flavored cigars.
What's happening: The FDA would issue the new product rules no earlier than July.
- It will accept public comments on the proposal starting next week, and it will hold public listening sessions in June to hear from affected communities.
Of note: Menthols are especially popular with Black and Hispanic smokers, with 81% and 51%, respectively, using menthols in 2020, WSJ noted today.
5. Flying selfies
Snapchat's latest attempt at hardware, the Pixy. Photo: Snap
Taking selfies has never been so easy.
- Snapchat today debuted a new flying camera called Pixy, a pocket-sized drone perfect for snapping that perfect shot (from your good side, obviously).
Details: The drone operates on its own without controllers, and everything shot on the camera is downloaded into a user's Snapchat library of content called "Memories," Axios' Sara Fischer writes.
- The drone is available for $229.99 in the U.S. and France.
Zoom out: The company unveiled the new drone alongside a slew of other announcements at its annual Snap Partner Summit.
6. What they're saying
"There are definitely indicators that would suggest the consumer is becoming more cautious right now."— Matthew Farrell, CEO of Trojan and Arm & Hammer parent Church & Dwight, on its earnings call.
Thanks to Sheryl Miller for copy editing today's (and every day's) newsletter.
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