💄 The new “lipstick effect”

…and “the future of Twitter” is the longest thread ever [Disclosures](   Passing on the $30 lip glow (Budrul Chukrut/Getty Images)   Last Week’s Market Moves   Dow Jones 32,403 (-1.40%) S&P 500 3,771 (-3.35%) Nasdaq 10,475 (-5.65%) Bitcoin $21,093 (+2.35%) Dow Jones 32,403 (-1.40%) S&P 500 3,771 (-3.35%) Nasdaq 10,475 (-5.65%) Bitcoin $21,093 (+2.35%) Hey Snackers, Worst. Perm. Ever. Dictionary publisher HarperCollins named "[permacrisis]( the word of the year. A representative said it "sums up quite succinctly just how truly awful 2022 has been." Sigh. US stocks rose on Friday, but the S&P 500 lost nearly 3.4% for the week after the Fed announced its fourth straight rate hike of 75 basis points. J. Powell’s comments suggested that a pause isn’t in the cards anytime soon. At least we got an [extra hour]( of sleep last night? Btw... Do you want to start getting Snacks daily? Or prefer to unsubscribe? Manage your subscription preferences [here](. Ungloss The “lipstick effect” is fading for cosmetics giants as consumers find comfort in experiential splurges Buying a cherry-red smile… but the outlook is more matte than glossy. Beauty titans are often shielded during economic downturns thanks to the so-called lipstick effect. In gloomy times, cash-stressed consumers can’t afford big-ticket items, so they console themselves by indulging in small luxuries (think: $38 Dior Lip Glow). - $20 gloss > $200 hydrafacial: As the US economy shrank in the first quarter, lipstick sales jumped 48% from last year (2X as fast as other beauty products). - Lipstuck: But now even cosmetics giants are [struggling]( to cover up ugly economic effects. Losing luster… Last week [Estée Lauder]( said its quarterly makeup sales fell 10%, and it lowered its outlook on weakening demand. Rival L’Oréal reported slowing growth as its profit-puppy luxe division (think: [Prada]( Lancôme) underperformed. FYI: Cover Girl owner [Coty]( reports next week. But while consumers are cutting back on makeup, spending rose more than expected in September as Americans splurged on “experiential” indulgences. - Travel go-tos are booming. [Airbnb]( reported its best quarter ever last week while [Marriott]( joined [Hilton]( in lifting its annual forecast. [Booking’s]( profit more than doubled. - Chains including Burger King, [Starbucks]( and KFC and Taco Bell owner [Yum Brands]( had robust sales growth as Americans opened their wallets for premium items like PSLs. - Big food staples like [Kellogg]( [Pepsi]( and [Kraft]( have reported strong sales this season as consumers kept stocking Frosted Flakes and Cheetos despite price hikes. Booze big shots like Smirnoff maker [Diageo]( have also proved resilient. THE TAKEAWAY Consumers are in “bite or flight” mode… While the economy's in stressful fight-or-flight mode, some Americans are finding solace by indulging in brand-name treats (bites) or getaways (flights). Despite broad price hikes, a lot of consumers are still shelling out for Whoppers and Airbnb glamping weekends. We might need to kiss the lipstick effect goodbye, because the seemingly “protected” categories during this downturn appear to be experience-based. Events Coming up this week... A whole new world… While streaming entertainment powered [Disney]( through the pandemic, real-life entertainment is propelling growth now. Revenue for the first nine months of the year was up 28% as US parks and resorts recovered and is expected to be up 25% for the year (Disney reports tomorrow). With Disney+, Hulu, and ESPN+, Disney surpassed [Netflix’s]( total subs in August but lowered its 2024 forecast for Disney+ as growth slows. If the streamer hadn’t added 9M subs last quarter, as expected, investors might be bummed despite Disney's strong overall growth. Insert (more) coins to continue... Gaming behemoths are struggling to beat their own high scores as the pandemic video-game boom slows. In the second quarter, NBA 2K maker [Take-Two Interactive]( and tween fave [Roblox]( fell short of quarterly earnings expectations after reporting fewer new gamers. Meanwhile, [Microsoft’s]( $70B purchase of [Activision]( — which makes Call of Duty — remains stalled in a lengthy regulatory review. Analysts expect earnings to keep falling when Take-Two and Roblox report this week, but revenues are forecast to rise as in-game spending stays strong. Zoom Out Stories we’re watching... “The future of [Twitter]( Every Twitter thread last week. ICYMI: Elon Musk now runs Twitter (in his [words]( “the bird is freed”). Top execs have left the company and advertisers are [skittish](. After [GM]( paused Twitter campaigns, ad giant [IPG]( recommended its clients pause their spend too. Meanwhile, Elon seems focused on cutting costs and boosting non-ad revenue: On Friday, Twitter laid off half its employees, and over the weekend started rolling out an $8/month charge for blue check marks. There are many opinions about the Twitter-quisition, but only time will tell if it’ll help the embattled platform rise or [sink](. Giving mixed signals… US employers added 261K jobs in October, and there are roughly two open jobs for every unemployed worker (a sign the Fed’s hikes aren’t cooling the economy enough). But job growth slowed and unemployment ticked up to 3.7%. Microsoft, Netflix, [Snap]( and [Meta]( are laying off employees, and [Amazon]( and (reportedly) [Apple]( have frozen corporate hiring. Last week [Lyft]( and Stripe also announced cuts. Non-tech industries may also slow: last week [Ford]( offered buyouts to underperformers. ICYMI Last week's highlights... - [#Phygital]( [Ralph Lauren]( and Epic Games announced a Fortnite fashion collection. The collab is both physical and digital, living in closets and in Fortnite avatars. It could help the preppy retailer gain younger fans. - [BnBest]( Airbnb is on top of the world (and can maybe rent you a yurt there). By embracing WFH trends, the rental platform posted its best quarter as consumers seek IRL experiences in an always-online world. - [Scored]( [Dick’s Sporting Goods]( launched a $50M venture-capital fund to invest in sports-related startups. Corporate VC is booming, with companies from [Google]( to [GE]( to [J&J]( building major funds. What else we're Snackin' - [Gap]( An NYC pay-transparency law now requires employers who hire in the city to share salary ranges for job listings. But with broad ranges being posted, it may not help close the wage gap as intended. - [Subs]( Social platforms like [Facebook]( [Twitter]( and [Snap]( are at the mercy of advertisers' budgets, but a growing push toward subscriptions (picture: monthly fees for added features) could break Madison Avenue's grip. - [Funged]( Reddit saw $10M+ in collectible avatar sales even as the broader NFT market tanked 97% from its January peak. One possible reason: Reddit didn't mention that the [polygon]( NFTs, dubbed "Snoos," were NFTs. Want your Snacks daily? The Daily Newsletter Get fresh takes on financial news every week day. Try a sample: 💸 [Corporate America’s VC-fication]( • Nov 4, 2022 🏰 [Airbnb’s king-size quarter]( • Nov 3, 2022 👕 [Fortnite’s fashion Poloverse]( • Nov 2, 2022 [Subscribe to the Daily]( Snack Fact Of the Day The first country to give women the right to vote was New Zealand in 1893 [Read more]( This Week - Monday: Earnings expected from Activision Blizzard, BioNTech, Take-Two Interactive, Palantir, Ryanair, Lyft, and TripAdvisor - Tuesday: Earnings expected from Disney, Occidental Petroleum, Constellation Energy, GlobalFoundries, Norwegian Cruise Lines, Coty, AMC, Affirm, Planet Fitness, and Sweetgreen - Wednesday: Earnings expected from Rivian, Coupang, Roblox, Manulife Financial, Unity Software, Starwood Property, Wendy’s, Bumble, and SeaWorld - Thursday: Jobless claims. Earnings expected from AstraZeneca, Nio, Toast, Ralph Lauren, Duolingo, Weibo, WeWork, Six Flags, Warby Parker, Aurora Cannabis, and Brookfield Asset Management - Friday: Earnings expected from Innovid Authors of this Snacks own: matic and shares of Amazon, Take-Two Interactive, Disney, Snap, Netflix, Apple, Ford, Twitter, Microsoft, Apple, GM, Yum Brands, Aurora Cannabis, and Starbucks ID: 2577983 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. All investments involve risk including the loss of principal and past performance does not guarantee future results. [Robinhood Terms and Conditions]( • [Disclosure Library]( • [Our Editorial Principles]( • [Contact Us]( • [FAQ]( [Manage Your Subscription Preferences]( To unsubscribe from all commercial emails, click [here](