🇺🇸 Labor’s right wrong turn

…everyone’s worried about jobs, and no one’s worried about the job market? [Disclosures](   About 125K US workers lost their jobs last year (Johannes Eisele/Getty Images)   Last Week’s Market Moves   Dow Jones 33,631 (+1.46%) S&P 500 3,895 (+1.45%) Nasdaq 10,569 (+0.98%) Bitcoin $16,952 (+2.56%) Dow Jones 33,631 (+1.46%) S&P 500 3,895 (+1.45%) Nasdaq 10,569 (+0.98%) Bitcoin $16,952 (+2.56%) Hey Snackers, It’s only nine days into the new year and California’s already abandoned Dry January: the Sunny State is having a [drenching month]( with heavy rains and flooding. In the first big rally of 2023, the S&P 500 gained 1.5% for the week after news that wage growth cooled last month. About that… Btw... Do you want to start getting Snacks daily? Or prefer to unsubscribe? Manage your subscription preferences [here](. Wrong Investors celebrated cooling wages, but the layoff-laden labor market’s still too hot for comfort Oh the weather outside is frightful… but the December jobs report is apparently delightful. Stocks rallied Friday after fresh labor data [showed]( a slowdown in wage growth. Normally, that wouldn’t be a great sign, but in this “good is bad” economy it serves as more evidence that inflation is cooling. Read: the Fed’s rate-hiking crusade is working. - But also: The job market’s still red hot. US employers added a stronger-than-expected 223K jobs last month and the unemployment rate fell to 3.5% (near historic lows). - But still: Investors celebrated cooling wages, which can translate to cooling prices, which could translate to the Fed being less aggro with rate hikes. Everyone’s worried about jobs… and no one’s worried about the job market? We’re seeing this paradox playing out: Americans are on edge over job security, but in November there were 1.7 openings for every available worker. Still, job growth is losing steam (employers are adding fewer roles each month) and mass layoffs are only heating up. - Tech layoffs are happening at the fastest rate since the pandemic: last week [Amazon]( announced plans to lay off 18K+ employees and [Salesforce]( said it’s cutting 8K. Online styling service [Stitch Fix]( said it would let go of 20% of staff, while struggling crypto lender Genesis slashed 30%. - Not just tech: While tech is a rate-sensitive industry, others like [Goldman Sachs]( Dodge maker [Stellantis]( and [Redfin]( have announced big cuts. THE TAKEAWAY The labor market needs to get more wrong to feel right… The strong job market is the last remnant of the pandemic-stimulus era (recall: near-zero interest rates, fat checks). Job data is a lagging indicator, and we’re finally starting to see hawkishness catch up to it. But Fed officials said they’d need to see sustained cooling before easing up on hikes — a scenario investors are hungry for. At least the trend is moving in the right (cough, wrong) direction. Events Coming up this week... Securing the vault… [Chase]( [Wells Fargo]( [Bank of America]( and [Citi]( kick off bank earnings this week, and all eyes are on lending. So far, higher rates have boosted banking profits, since banks are earning more on deposits and loans (think: mortgages). In October, Chase reported that quarterly revenue jumped 10% to $33B while profit surged 34%. Bank of America and Wells Fargo also topped revenue estimates. While economic woes could hurt loan demand, delinquencies are still low, and analysts expect more growth when banks report. Ready for takeoff… As [Southwest]( went into a tailspin, [Delta]( soared. Last month the Atlanta-based airline predicted its earnings would nearly double this year from last, jetting past expectations. CEO Ed Bastian said the post-Covid travel boom hasn't petered out, as people prioritize “experiential” spending over material goods. Delta seems to believe the good times will keep rolling: it agreed to multiyear raises for pilots and is adding customer perks like free Wi-Fi. We'll see if the highflying industry optimism lands in reality when Delta reports. Zoom Out Stories we’re watching... Cryptowned… Customers of bankrupt crypto lender Celsius got more bad news: a judge [ruled]( that the $4.2B in crypto they'd deposited into 600K interest-bearing accounts belongs to Celsius. Now those customers will be last in line to get repaid. The biz's terms of service, updated eight times, sealed the deal (lesson: read the TOS). The ruling could set the tone for customer compensation in other crypto-related bankruptcies (think: FTX, BlockFi). Meanwhile, the New York attorney general accused Celsius' founder of fraud. From phone screens to flat screens… stream-ification is coming for TV. Dongle icon [Roku]( said it’s [launching]( its own “streaming-first” TV sets. It’s good timing: in July streamers got more TV view time than cable networks for the first time as cord-cutting continued — and 87% of US households had a streaming sub last year. While televisions aren’t likely to go the way of cable, they could play a key role in a future where consumers toggle between services like [Netflix]( and [Disney+]( changing streamers instead of channels. ICYMI Last week's highlights... - [Fold]( [Bed Bath & Beyond]( shares plunged 47% last week after the embattled retailer said it might file for bankruptcy. OG category-killers are struggling to compete against online options (ahem, Amazon). - [Elon]( [Tesla]( delivered a record 1.3M cars last year, but the stock posted its worst drop in over two years after #s fell shy of targets. Now investors worry Musk is too focused on [Twitter]( — to Tesla’s detriment. - [Run]( [Silvergate]( the bank that helped fuel the crypto boom, plans to cut 40% of its staff after wary customers pulled out $8.1B. Since Silvergate is a key crypto player, the wider industry could feel the fallout. What else we're Snackin' - [Speed]( Ultrafast-delivery apps (think: lunch in under 10 mins) are booming across India. But drivers say the work's dangerous. The country's projected to have 23M+ gig workers by 2030, up from 7.7M in 2020. - [Peep]( TV sticker prices have plummeted over the past decade as "smart" features allow sellers to profit off customers after they've left the store. Picture: tracking your viewing habits, then selling that data. - [Red]( Stocks had their worst year since 2008, with tech standouts like [Coinbase]( and [Meta]( leading the plunge. Energy was the only sector that shined, with some stocks doubling. Want your Snacks daily? The Daily Newsletter Get fresh takes on financial news every week day. Try a sample: 🛀 [Bed Bath & Bankrupt?]( • Jan 6, 2023 📺 [Roku’s TV revolution]( • Jan 5, 2023 🚗 [Tesla’s mixed delivery]( • Jan 4, 2023 [Subscribe to the Daily]( Snack Fact Of the Day For the first time since 2014, Google and Meta no longer have the majority of US digital ad spend [Read more]( This Week - Monday: Earnings expected from Tilray and WD-40 Co. - Tuesday: NFIB small-business index. Earnings expected from Albertsons - Wednesday: Earnings expected from Wipro - Thursday: Consumer price index. Earnings expected from Infosys, TSMC, and Platinum Group Metals - Friday: Earnings expected from UnitedHealth, JPMorgan Chase, Bank of America, Wells Fargo, BlackRock, and Delta Authors of this Snacks own: shares of Amazon, Disney, Delta, Roku, and Tesla ID: 2668229 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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