💼 A fork in the job market

…and Apple might give us a glimpse of new hardware [Disclosures](   The job market diverges (Joe Raedle/Getty Images)   Last Week’s Market Moves   Dow Jones 32,900 (-0.94%) S&P 500 4,109 (-1.20%) Nasdaq 12,013 (-0.98%) Bitcoin $29,822 (+4.36%) Dow Jones 32,900 (-0.94%) S&P 500 4,109 (-1.20%) Nasdaq 12,013 (-0.98%) Bitcoin $29,822 (+4.36%) Hey Snackers, It’s been over 100 days since Russia invaded Ukraine. The [war]( has killed thousands and displaced another 12M people. Experts say the outcome is unlikely to be clear even in the next 100 days. In the markets, the bumpy ride continued. Stocks fell over June’s first trading week, but there’s been some green in between all the red: the major market indexes closed the week up 5% from their 52-week lows last month. Btw... Do you want to start getting Snacks daily? Or prefer to unsubscribe? Manage your subscription preferences [here](. Wanted The May jobs report reveals a super-tight labor market for boomerang companies and a slowing one for others — and that might not be bad More hyped than “Stranger Things”... at least by economists. Friday's monthly jobs report, aka: America's “Labor 101” report card, came at a critical time for the economy. The results: the booming job market cooled slightly in May. Key word: slightly. - Job growth was stronger than expected, but eased. The US [added]( 390K payrolls, the lowest since April 2021. Usually this number is enough to indicate the labor market's health. This time, not so much, since the problem [isn’t]( demand for workers — it’s supply. - Labor-force participation, perhaps more telling, nudged up to 62.3% — a sign Americans are slowly returning to work. Even though job openings dropped by 455K in April, there’s still 5M+ more open roles than available workers. - Wage growth ticked down, rising 5.2% from a year earlier but still twice the rate that earnings were rising pre-pandemic, as companies bump pay to compete. A tale of two markets... Unemployment stayed at a pandemic low of 3.6%, and rebounding sectors like hospitality can't hire fast enough. The paradox: sectors that thrived mid-pandemic are slowing hiring and cutting jobs to shave costs. - We're hiring: Airlines, restaurants, hotels, and retailers are scrambling to boost headcount to meet demand — and have [cut]( growth plans because they can’t. [American Airlines]( has hired 16K employees this year and is still struggling to fill positions. Small businesses have been forced to [slash]( hours and services. - We're un-hiring: As inflation and slowing demand hit tech profits, [Peloton]( [Netflix]( [Carvana]( and others have laid off workers ([Tesla]( [reportedly]( plans to as well). Meanwhile: [Microsoft]( [Meta]( [Salesforce]( [Twitter]( [Uber]( [Wayfair]( and [Snap]( say they’ll rein in hiring. THE TAKEAWAY A slowdown could be good… if done right. While rising wage growth is usually positive, at the current pace it’s [nearly impossible]( to tame inflation (aka: econ enemy #1). Wages and purchasing power are actually falling when adjusted for inflation — read: not keeping up with rising prices. The Fed’s big challenge: cool the labor market without undoing the progress made during the rebound. But it could be hard to distinguish between a healthy cooling and a [recession]( — which experts [see]( as increasingly likely. Zoom Out Stories we’re watching Open for biz… China’s biggest city is opening back up after strict Covid lockdowns rattled residents and global supply chains. Last week Shanghai officials lifted restrictions for most people after two months of isolation. Now Shanghai's main port (aka the world's [largest]( is working through thousands of backlogged containers chock-full of everything from diapers to dishwashers. With 26M residents returning to daily routines, oil demand could spike, translating to even higher pump prices worldwide. Tightening time… The Fed’s busting out a new-ish tool in the inflation fight. Early in the pandemic, the US’s central bank used quantitative easing (QE) — aka “printing money” — to stimulate the economy. Now it’s [switching to]( quantitative tightening (QT), basically destroying the $$ it printed by letting bonds and other securities it purchased mature, which reduces its cash balance and the money supply. There’s a risk the Fed could tighten too quickly (it’s [selling]( 10X faster than its last QT in 2017), which might mean more volatility for stocks. Events Coming up this week Tim Cook’s cookin’ up… [Apple’s]( version of VR. Apple’s annual developer conference kicks off today. Analysts expect a new iPhone OS and a MacBook Air refresh. We may also see a long-awaited mixed-reality headset. Apple reportedly [showed]( its board a prototype last month, a sign it could soon launch its first new hardware since its 2015 Watch. But the Fruit’s entering a market with heavy hitters: Meta’s Quest 2 has 78% market share, and [Sony]( and Microsoft are also players. One analyst [thinks]( Apple could ship [3M]( headsets next year. Weddings, prom, and a grad party… not enough closet space. A packed season of IRL events is fueling demand for formal fits. Last quarter, [Rent the Runway’s]( [revenue]( doubled from the start of the pandemic in 2020, thanks partly to its return-from-home option. It’s a different story for rival clothing service [Stitch Fix]( which is struggling to lure new customers as lax office dress codes (think: elastic waistbands) cut [demand]( for everyday outfits. We'll find out whether the uptick in summer soirees has affected orders when both report Thursday. ICYMI Last week's highlights - [Lightning]( [Ford’s]( throwing billions more at three US EV plants, even as the industry struggles with production delays. Meanwhile, EV makers are building home charging stations and batteries. - [Washed]( Authorities raided [Deutsche Bank]( to investigate allegations it was “greenwashing” some sustainable-investment funds. The move comes at a time when ESG standards are facing greater scrutiny. - [Embargo]( The EU is banning Russian oil that comes by sea, or about 90% of all EU oil imports. China and India are still buying Russia’s crude, but Europe could block Moscow from insuring Russian tankers. What else we're Snackin' - [Lean]( When Sheryl Sandberg announced she was leaving [Meta]( the COO was reportedly not only burned out but under internal investigation, partly for using corporate resources to plan her upcoming wedding. - [Winklevii]( The Winklevoss twins laid off 10% of staff at their crypto-exchange biz, Gemini, citing a “crypto winter.” [Coinbase]( and crypto exchange Rain also cut [headcount]( fearing a prolonged coin downturn. - [Birding]( Birdwatchers are finding themselves on the front lines of the climate crisis. Many are using apps like eBird, which crowdsources data that helps scientists track climate-change patterns. Want your Snacks daily? The Daily Newsletter Get fresh takes on financial news every week day. Try a sample: 🔌 [The EV outlook]( • Jun 3, 2022 🌎 [The ESG reset]( • Jun 2, 2022 🛢️ [Russia gets embargoed]( • Jun 1, 2022 [Subscribe to the Daily]( Snack Fact Of the Day A lifeguard shortage could prevent a third of the US’s public pools from opening this summer [Read more]( This Week - Monday: Apple WWDC keynote. Earnings expected from GitLab - Tuesday: California primary election. Earnings expected from JM Smucker, Smartsheet, Dave and Buster’s Entertainment, and Cracker Barrel - Wednesday: Earnings expected from Campbell Soup, Five Below, and Brown Forman Corp. - Thursday: Jobless claims. Earnings expected from Nio, DocuSign, Vail Resorts, Signet Jewelers, Stitch Fix, and Rent the Runway - This weekend: The Belmont Stakes is Saturday Authors of this Snacks own shares of Apple, Tesla, Ford, Netflix, Twitter, Microsoft, Uber, and Snap ID: 2230964 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. Any third-party information provided therein does not reflect the views of Robinhood Markets, Inc., Robinhood Financial LLC, or any of their subsidiaries or affiliates. 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