🛒 Ecommerce wipeout

…and Shell’s record windfall [Disclosures](   Online retailers have a “pull forward” problem (Noam Galai/Getty Images)   Yesterday’s Market Moves   Dow Jones 32,998 (-3.12%) S&P 500 4,147 (-3.56%) Nasdaq 12,318 (-4.99%) Bitcoin $36,417 (-8.20%) Dow Jones 32,998 (-3.12%) S&P 500 4,147 (-3.56%) Nasdaq 12,318 (-4.99%) Bitcoin $36,417 (-8.20%) Hey Snackers, Welp. A day after staging a classic “relief rally” on the Fed’s rate hike, stocks wiped it all out and then some in their worst day since 2020. The Dow and S&P dropped more than 3% and the Nasdaq fell 5%, as the economic realities of high inflation and slowing growth set back in. Just about nothing was spared: tech led the selloff ([Netflix]( -8%), with an assist from ecommerce ([Wayfair]( -26%... more on that in a sec). But even banks like [JPMorgan]( and non-cyclicals like [Coke]( and [P&G]( got hit. Click Ecommerce stocks are getting hammered as shoppers get back to spending like it’s 2019 The return of (IRL) retail therapy… While you ditch front-porch packages for fitting rooms and food courts, online retailers are being left in the dust. In yesterday’s big selloff, shares of [Shopify]( sank [15%]( after the popular ecomm platform saw sales slow for the fourth straight quarter. - Ripped receipt: Shopify’s sales rose 22%, to $1.2B, but that was a fraction of its 110% gain from the same quarter last year. - Troublesome trifecta: Execs blamed inflation, labor shortages, and a return to IRL shopping for the slowdown — and said the rest of the year doesn’t look much better. Caribbean cruise > cyber sales... In the past two years, nearly a fifth of every dollar [spent]( in the US came from online orders. Yet with consumers returning to their 2019 spending habits — on concerts, vacays, and Sunday brunch — the boom in e-buying is losing momentum. US ecommerce sales have dropped 3X compared to 2020 levels. That’s showing up in the bottom line of some of the biggest pandemic winners: - Shares of Wayfair tumbled after the online furniture seller lost nearly 2M customers and $320M in sales last quarter. - Both [Etsy]( and [eBay]( lowered their sales forecasts for the year, and didn't say when (or if) they’d return to pandemic-era profits. - A week ago, [Amazon’s]( stock had its [worst]( day in over a decade after cooling sales led to its first quarterly loss since 2015. THE TAKEAWAY The Great Normalization is here... Ecommerce sites benefited from a huge pull-forward boost in demand during the pandemic, fueled by stimmy checks and boredom. As [Visa’s]( and [Mastercard’s]( earnings [showed]( consumers are still opening their wallets — they just have new priorities. For platforms like Shopify, it means adjusting expectations for the new new normal of more balanced spending. Slick Shell — Europe’s biggest oil biz — posted a record $9B profit, yet whispers of a “windfall tax” are growing louder Come Shell or high water… Soaring energy prices: bad for consumers, great for oil companies. How great? Yesterday, London-based [Shell]( [reported]( a record $9.1B quarterly profit — 3X last year’s — despite $4B+ in losses related to its leaving Russia. It’s something of a trend. - Pumpin’ profits: In the most recent quarter, BP posted its highest profit in a decade, despite $26B in Russia losses. [Exxon]( [said]( it doubled profits from last year, and [Chevron]( quadrupled its haul. - Buy, buy, buybacks: Buoyed by bumper profits, all four oil giants plan to boost share buybacks and raise dividends, two ways to return $$ to investors. Big buybacks, big blowback… US and UK lawmakers have started calling for a “windfall tax” on energy giants, a one-time tax on their excess profits. The idea is to use the cash to help consumers with rising prices at the pump. Critics say the money would be better spent investing in renewable energy. - Winds of change: Spain and Italy already [slapped]( windfall taxes on some energy companies, but experts don’t expect the US or UK to follow suit. THE TAKEAWAY Windfalls come in many forms… Russia’s invasion of Ukraine gave oil giants a financial windfall in booming profits. It also gave them a strategic windfall: it illustrated how dependent the global economy still is on fossil fuels, whether we like it or not. Earlier this week, [VW]( [said]( it planned to keep using coal because of a proposed EU ban on Russian oil. Then Shell’s CEO told investors the war proves the need for big oil producers, despite the pressure to act on the climate crisis. What else we're Snackin' - [Shock]( Covid killed 15M people in 2020 and 2021 — or one of every 500 people in the world — the WHO said. That would be nearly three times the previously reported toll. - [Fresh]( Elon Musk has raised over $7B to help fund his $44B takeover of [Twitter]( reducing his personal risk in the buyout. The investors include a Saudi prince, [Oracle]( cofounder Larry Ellison, and crypto exchange Binance. - [Plug]( EV upstart [Lucid]( said it delivered 360 cars last quarter and now has 30K reservations for its Air sedan. The company is sticking with its reduced production target of 12-14K cars for the year. - [Bud]( More evidence consumers are flush with cash: Budweiser parent [AB InBev]( saw quarterly profits grow nearly double what was expected, buoyed by beer drinkers trading up for pricier brews like Corona and Stella. - [Tree]( Stanford’s getting $1.1B to fund a new school focused on the climate crisis. The donation comes courtesy of John Doerr, a Silicon Valley OG, and is the second-largest gift ever to an academic institution. 🍪 Thanks for Snacking with us! Want to share the Snacks? Invite your friends to sign up [here](. Snack Fact Of the Day The jersey Diego Maradona wore when he scored the famous “Hand of God” goal sold for $9.28M — the highest price ever paid for sports memorabilia [Read more]( Friday - Monthly employment numbers - Earnings expected from Zillow, Berkshire Hathaway, Cigna, DraftKings, and Madison Square Garden Entertainment Authors of this Snacks own: shares of Exxon, Twitter, Amazon, Shopify, and Netflix ID: 2189242 Robinhood Snacks newsletters 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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