🔈The IPO of Things

…and Jerome’s interest-rate hikes are coming [Disclosures](   Spotted by IoT: Why’s Bill stopping at Popeyes? [shotbydave/E+ via Getty Images]   Yesterday’s Market Moves   Dow Jones 35,927 (+1.08%) S&P 500 4,710 (+1.63%) Nasdaq 15,566 (+2.15%) Bitcoin $48,762 (+0.76%) Dow Jones 35,927 (+1.08%) S&P 500 4,710 (+1.63%) Nasdaq 15,566 (+2.15%) Bitcoin $48,762 (+0.76%) Hey Snackers, The most underwhelming holiday present is now the hottest present: [Gift card]( purchases are up 43% this year. They’re not fun to unwrap, but at least you can use them (unlike those wool winter PJs — ETA: summer 2022). Stocks turned green yesterday, jumping on the Fed’s 2022 plans (more on that in a sec). Meanwhile, Dr. Fauci [said]( that available Covid boosters work against Omicron, so there’s no need for a new variant-specific shot at this point. The WHO [warned]( that people infected with Omicron could experience “the full spectrum of disease,” from asymptomatic infection to death. Pivot Powell’s inflation plan: The Fed’s “easy money” party is ending earlier than expected Christmas card from Jerome… minus the XOXO. During the Fed’s final meeting of 2021, chief Jerome Powell [said]( the US’s central bank plans to slash its economy-boosting bond purchases twice as fast as [previously planned](. That puts the Fed on track to end bond splurges in March, not June — meaning interest rates could rise as early as spring. In March, the Fed wasn’t expected to hike rates until 2024. Now it expects to hike them three times next year. - The reason: Powell called inflation transitory until this month, when he officially “retired” the term. Prices are soaring faster than expected, with inflation at a 39-year high. - The solution: Higher interest rates make borrowing more expensive. Extra IOU payments discourage spending and encourage saving, which can help lower prices. - The reaction: Stocks jumped yesterday after Powell announced his #FlationControl plan, which reduced uncertainty for investors and relaxed price fears. Take a (interest rate) hike… or three. This year was all about boosting spending to support the economy. But because Powell says high prices may persist “well into next year,” 2022 could be all about cooling the overheated economy. Unemployment has fallen to 4.2%, and the average American’s bank account is about 50% higher than pre-pandemic. THE TAKEAWAY The easy-money party is over… and rate hikes may be the cure for an overspending hangover. The Fed’s easy-money policies helped the economy rebound by encouraging bank loans and consumer spending. But as prices soar, those policies could make it harder for people to pay for essentials like food, housing, and heat — and that might end up seriously hurting the economy. US retail sales majorly [slowed]( in November from October, signaling that rising prices are starting to mess with spending. IoT Samsara goes public at $11B to expand the “Internet of Things” Tracking your avo delivery… and your semi. The Internet of Things (IoT) is a connected system that distributes real-time data across devices. Think: [Apple Watch]( sending your heart rate to an iPhone app, or Alexa ordering you groceries. Less consumer-y, but very IoT: [Samsara]( sells dash cams and GPS trackers that companies stick on trucks, containers, and manufacturing equipment to give them an all-in-one view of their supply chain. Yesterday: - Samsara went public on the NYSE under ticker “IOT.” Shares jumped 7% from its IPO price, giving Samsara a $11B+ market cap — more than double its valuation last year. - By targeting less tech-savvy industries (think: farming), Samsara tripled its revenue from 2020 to $114M last quarter. Buuut: It lost $100M+ in the first nine months of 2021. 54-day LA port backup… Supply delays and shortages have disrupted the global economy. Manufacturing, transportation, and farming are the backbone of global supply chains, but many companies in those industries have yet to “tech-ify” operations. Now IoT companies like Samsara are helping them streamline to take advantage of a growing opportunity: - 40% = The amount of global GDP generated last year by key industries like transportation, construction, and manufacturing. - By [2024]( the number of connected IoT assets (like: machinery, vehicles, warehouses, and factories) is expected to reach 39B. THE TAKEAWAY If cloud is oil, IoT is the refinery… Cloud computing is the oil that greases the digital economy, and IoT could be the refinery that turns it into premium fuel — by translating physical objects into digital data. Big retailers like [Walmart]( already [use]( IoT to monitor freezer aisles and troubleshoot mechanical issues before they start. Samsara's tracking tech has helped companies avoid driving accidents, and even reduce carbon emissions. What else we're Snackin' - [Cancel]( US airline execs testified before the Senate to explain why they had mass flight disruptions despite receiving $54B in federal taxpayer aid during the pandemic. - [Cron]( The UK reported its highest number of daily Covid cases since the pandemic began, and a British health chief said there could be more “staggering” numbers soon. - [Robux]( [Roblox]( shares fell 9% yesterday after the tween-favorite gaming platform reported that daily active users fell in November to 49.4M. - [Search]( [Google]( reportedly told employees that they’d lose pay and eventually be fired if they didn’t comply with the company’s Covid vax policy. - [Untile]( [Lowe’s]( expects the DIY home-improvement boom to (finally) slow next year. You’ve retiled the kitchen five times. - [Prius]( [Toyota]( said it planned to produce a monthly record of 800K vehicles in January. The Corolla manufacturer is making up for time lost to part shortages. 🍪 Thanks for Snacking with us! Want to share the Snacks? Invite your friends to sign up [here](. The Snacks Daily Podcast Brutal name, brutal-er business: Rentokil is a pure-play pest-exterminator stock (and sounds exactly like it). Now it’s buying Terminix for $6.7B to crush more termites, rats, and cockroaches in the US. [Tune in]( to hear what urbanization, climate change, and WFH have to do with (more) bugs. Snack Fact Of the Day [The most popular term on Investopedia this year was “capital gains tax”]( Thursday - Weekly jobless claims - Earnings expected from: Adobe, Accenture, FedEx, General Mills, BlackBerry, and Rite Aid Authors of this Snacks own shares of: Google, Amazon, Apple, and Walmart ID: 1961021 Robinhood Snacks newsletters and podcasts reflect the opinions of only the authors who are associated persons of Robinhood Financial LLC (Member [SIPC]( and do not reflect the views of Robinhood Markets, Inc. or any of its subsidiaries or affiliates. They are for informational purposes only, and are not a recommendation of an investment strategy or to buy or sell any security, digital asset (cryptocurrency, etc) in any account. They are also not research reports and are not intended to serve as the basis for any investment decision. 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