🚩 WeWork’s red flag

…and China’s deflation spells trouble for the global economy   WeWork’s not working so well (Claudio Cruz/Getty Images)   [Sponsored by]( Last Week’s Market Moves   Dow Jones 35,281 (+0.62%) S&P 500 4,464 (-0.31%) Nasdaq 13,645 (-1.90%) Bitcoin $29,379 (+1.04%) Dow Jones 35,281 (+0.62%) S&P 500 4,464 (-0.31%) Nasdaq 13,645 (-1.90%) Bitcoin $29,379 (+1.04%) Hey Snackers, The new big flex: being a UPS driver. Indeed said it’s seen a 50% [spike]( in searches for UPS jobs after the shipping giant and the Teamsters reached a deal that would raise full-time drivers’ salaries to $170K. That brown uniform’s looking pretty golden. The S&P and Nasdaq closed out their second straight losing week as tech stocks (like Apple and Nvidia) cooled off after a red-hot July. The US consumer-price report showed inflation continued to slow last month, raising hopes of an end to rate hikes. Btw... Do you want to start getting Snacks daily? Or prefer to unsubscribe? Manage your subscription preferences [here](. WeWorried WeWork teeters on the brink of bankruptcy as commercial real estate gets crunched Dry kombucha taps… Office-leasing leviathan [WeWork]( told investors last week that it had “substantial doubt” it could remain in business as customers continued to bail. The once buzzy biz said it lost nearly $400M last quarter, and the stock’s plunged 99% since its SPAC-tastic debut in 2021. It’s a far cry from 2019, when WeWork was valued at $47B and occupied more office space in Manhattan and London than any other company. - Rowdy: In its private-company era, WeWork’s culture of free-flowing booze and wild employee parties helped lead to it losing $219K/hour for an entire year. After layoffs and the ousting of cofounder/CEO Adam Neumann, it needed a $9.5B [SoftBank]( bailout. - Empty: WeWork has reined in its spending since those Coachella-esque days, but now it’s losing customers as hybrid work takes over. Office-space availability hit an all-time high in April (picture: 1B square feet of empty cubicles). Not just a We problem… A US commercial real estate crisis is brewing. 70%+ of US employers are hybrid, and surveys suggest flexible work is here to stay. Now analysts predict a 35% drop in office values by 2025. Already, forced sales of commercial properties spiked in Q1 (owners couldn’t make mortgage payments), and office-loan delinquencies hit 5%. The one-two punch of lower occupancy + higher interest payments could bring about even more trouble. Morgan Stanley estimated that $1.5T in commercial real estate debt will come due in the next two years. THE TAKEAWAY One trainwreck can dislodge the entire track… WeWork rents nearly 20M square feet of office space — more than any other US biz — and one industry analyst said its collapse could serve as a “systematic shock” to major cities’ commercial real estate markets. If WeWork stops paying its landlords, they might struggle to pay their debts. Still, WeWork has argued that hybrid work will benefit its flex-working model — if it can keep chugging along. Sponsored by Robinhood Financial LLC So golden, so delicious. Add some cheddar to your dough… With the 4.9% interest rate on cash sweep with [Robinhood Gold]( your money earns money. Earn 4.9% APY on your uninvested cash (that’s over 9x the national average yield, according to Bankrate’s most recent survey as of July 24). And there’s no cap on what you can earn. Plus, your money is FDIC-insured up to $2M at member banks, and you can request to withdraw your cash at any time. Put your money to work with [Robinhood Gold]( Zoom Out Stories we’re watching Made-in-China is staying in China… China’s global exports sank at their steepest pace since early 2020. That’s bad news for the world’s second-largest economy, which has been struggling to recover after unwinding its zero-Covid policy. Western consumers have been spending less on electronics and clothes (often made in China) and more on travel and restaurants (not in China). Last week, UPS said its revenue took a hit from weaker China demand. Meanwhile, China tipped into “deflation” (falling prices) — an ominous sign for the global economy. Show receipts… Food prices have risen faster than other goods over the past year (#AisleAnxiety). Groceries were up 3.6% in July from a year ago, led by cereal and bakery staples, as the likes of General Mills, Kellogg, Hershey’s, and Kraft Heinz bumped prices (Kraft alone hiked prices 11% last quarter). While food companies point to higher commodity and labor costs, some consumers blame corporate “greedflation.” Now that shoppers are trimming back on pricier brand names, Coke, Pepsi, and others said they’ll ease off the hike pedal. Events Coming up this week Rice > rice cooker… Walmart and Target are expected to ring up earnings growth this week. Both retailers topped Wall Street’s estimates in May, even as shoppers cooled on big-ticket buys like $300 grills. As more Americans ditch discretionary splurges and bargain-hunt for groceries, retailers are boosting their food offerings. Target recently added 100+ new items to its Good & Gather private label, but it’s tough to compete with Walmart’s grocery game: America’s largest retailer makes up over quarter of all US grocery spend. 2 years later… Tomorrow marks two years since the Taliban took control of Afghanistan, and the $7B in Afghan central-bank funds that the Biden admin froze are still in limbo. Half is being held in a Swiss trust fund until the central bank can show it’s free from Taliban influence. The other $3.5B is in New York, where a judge turned down an effort by families of 9/11 victims to seize it. While releasing the billions to Afghanistan could risk = recognizing the Taliban as a legitimate gov’t, over a third of Afghans face severe hunger as the country’s economy crumbles. ICYMI Last week's highlights - [Charging]( President Biden’s green tech and pro-labor policy goals are clashing as 150K autoworkers try to iron out a contract with GM, Ford, and Stellantis. The union is calling for a “just transition” to EVs. - [Luxtility]( The differences between Lucid and Rivian were laid out as the EV makers reported. Luxury-focused Lucid disappointed on deliveries, while utility-driven Rivian sped up its production guidance. - [Playbook]( Casino owner Penn Entertainment is replacing its Barstool sportsbook with ESPN Bet, set to launch this fall. ESPN parent Disney wants to revive the channel’s revenue while staying fam-friendly. What else we're Snackin' - [Page]( #BookTok is basically Gen Z’s Scholastic Book Fair, with over half of surveyed 16- to 25-year-olds saying that book influencers fanned their paperback passion. Booksellers say TikTok recs lead to IRL sales. - [Pounds]( Novo Nordisk, the maker of Ozempic and Wegovy, became Europe’s second-most-valuable company as people seeking to lose weight rushed to its drugs. Now it’s struggling to meet demand. - [Basics]( Amazon is said to be ditching all but 3 of its 30 clothing brands. It’s faced scrutiny from regulators and lawmakers who think private labels could conflict with its platform service for non-’Zon brands. Want your Snacks daily? The Daily Newsletter Get fresh takes on financial news every week day. Try a sample: 🚗 [Biden’s EV labor clash]( • Aug 11, 2023 🏈 [Barstool swapped for ESPN]( • Aug 10, 2023 📱 [Venmo’ing stablecoins?]( • Aug 9, 2023 [Subscribe to the Daily]( Snack Fact Of the Day Taylor Swift’s recent six shows in LA are expected to boost the local GDP by $320M [Read more]( This Week - Monday: Earnings expected from Monday.com and Getty Images - Tuesday: US retail sales. Earnings expected from Cava, Home Depot, and Tencent Music - Wednesday: Housing starts. Earnings expected from Cisco, TJ Maxx parent TJX, JD.com, and Target - Thursday: Initial jobless claims. Earnings expected from Walmart, Applied Materials, Ross, and Tapestry - Friday: Earnings expected from Estée Lauder and Deere Authors of this Snacks own shares of: Amazon, Apple, Disney, GM, Kraft Foods, Nvidia, and Walmart *Advertiser's disclosure: Cash Sweep enables interest on your uninvested cash. 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