Morning Brew - ☕️ Deflated

The stock market is in a major slump...
April 30, 2022 View Online | Sign Up | Shop

Morning Brew

Cariuma

Good morning. It’s the last day of April, which reminds us—you know when Justin Timberlake sings “It’s Gonna Be Me” in that NSYNC song? If you listen again, it sounds a lot like “it’s gonna be May.” Someone on the internet should do something with that.

Neal Freyman, Matty Merritt, Jamie Wilde

MARKETS

Nasdaq

12,334.64

S&P

4,131.93

Dow

32,977.21

10-Year

2.929%

Bitcoin

$38,526.59

Amazon

$2,485.63

*Stock data as of market close, cryptocurrency data as of 7:00pm ET. Here's what these numbers mean.

  • Markets: The miserable final trading day of April was emblematic of the month as a whole. Stocks tumbled and Amazon, which posted a surprise quarterly loss on Thursday, had its worst day since 2006.

STOCKS

Waiting for the market bottom like

Cartoon character falling Looney Tunes/Warner Bros. via Giphy

The US stock market just had its worst month since March 2020, when the world shut down due the pandemic. In April, the S&P dropped 8.8%, the Dow 4.9%, and the Nasdaq, 13.3%—which marks that index’s worst month since 2008.

But…the world isn’t shut down now, nor is there a financial meltdown. So why are stocks acting as if we’re in crisis? Because the market has bleaker growth prospects than an air mattress after you fall asleep.

The primary headwind for growth, of course, is the Fed’s plan to hike interest rates in order to cool inflation. This hawkish turn has been especially painful for high-flying tech companies, which become less attractive as interest rates move higher.

  • Cathie Wood’s ARK Innovation fund, which is perhaps the best-known fund for futuristic tech stocks, just had its worst month ever, falling 26%.
  • That fund includes Zoom (down 82% from an all-time high), Roku (–80%), and Coinbase (–67%).

A secondary concern: Supply chain bottlenecks are still stinging corporate giants. With China locking down cities at the first trace of Covid, American companies whose products are made in Chinese factories aren’t able to fulfill orders. Apple said Thursday that it would face up to $8 billion in losses due to restrictions in Shanghai.

As if all that didn’t provide a bearish enough environment for investors, the war in Ukraine has introduced challenges for companies across virtually every sector. For evidence, just note how Snapchat said its sales were hit when advertisers paused campaigns following the outbreak of the war.

Big picture: The stock market plunge of March 2020 was followed by skyrocketing growth. Don’t expect a rapid recovery this time around, many analysts predict. The Fed, which is playing catch-up on inflation, will have to “hike until it hurts,” Bank of America economist Alexander Lin said.—NF

        

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WORLD

Tour de headlines

Elon Musk celebrating after buying Twitter Illustration: Dianna “Mick” McDougall, Photos: Getty Images

Elon pads his checking account. The mogul sold ~$8.4 billion worth of Tesla stock this week as he prepares to put up $21 billion of his own money to buy Twitter. That’s a lot of dough, but the guy is obsessed: He’s tweeted nearly every day for the past four years, according to the WSJ.

Bauer pulled for two seasons. MLB suspended LA Dodgers pitcher Trevor Bauer for two seasons after an “extensive investigation” found he violated the league’s domestic violence and sexual assault policy. A San Diego woman accused Bauer of sexually abusing and beating her last year, which he’s denied. Bauer plans to appeal the suspension—if it’s upheld, he’ll lose $60 million in salary.

Buffett groupies flock to Nebraska for “Woodstock for capitalists.” After realizing just how small the Omaha airport is, tens of thousands of Berkshire Hathaway shareholders will attend the company’s annual meeting today, which is being held in-person for the first time since 2019. One point you might hear Buffett bring up: Berkshire’s shares are absolutely trouncing the S&P 500 this year.

CRYPTO

What if we kissed in the Bored Ape metaverse?

Bored Ape Yacht Club swamp Yuga Labs

The Bored Ape Yacht Club is moving from the swamp to the metaverse. Land deeds for its virtual world, called the Otherside, will go on sale tonight in what’s expected to be the biggest NFT industry drop ever—generating as much as $300 million in crypto.

  • At 9pm ET, preapproved buyers with no Saturday night plans can buy “Otherdeeds” for a flat 305 ApeCoins (a digital currency created last month), which was equivalent to more than $8,300 at Thursday’s high.
  • Shortly after, the secondary market is expected to go off, if prelaunch hype is any indication. Yesterday, Bored Ape NFTs hit a record-high floor price of 152 ETH (about $430,000), per The Block Research.

Zoom out: Bored Apes swung onto the NFT scene almost one year ago exactly—when volume for searches like “non-fungible thingamabob” was at its peak. While other NFT projects have cooled off since that initial frenzy, Bored Ape Yacht Club has gained in value as it’s evolved into a lifestyle brand with celeb backers.

In other words, to many people a Bored Ape is more than just a JPEG.—JW

        

SOCIAL MEDIA

The TikTok trial

Three screenshots from Johnny Depp-Amber Heard defamation trial. 1) Video with the text "Johnny Depp being fed up with Ambers lawyers for a minute and 13 seconds" 2) LA Starbucks with full Johnny Depp tip jar and empty Amber Heard tip jar 3) Milani Cosmetics video Videos from TikTok accounts @_.editslmao_, @summervictoria_, and @milanicosmetics

It never takes too long for a celebrity trial to go completely off the rails, but in just two-and-a-half weeks, the Johnny Depp–Amber Heard libel trial has overrun TikTok. Depp supporters have flocked to social media and YouTube livestreams of the trial to share their extremely anti-Amber Heard views.

Here’s what the trial is actually about: Depp sued Heard, his ex-wife, for $50 million, claiming she defamed him in a Washington Post Op-Ed she wrote in 2018. The column doesn’t name Depp, but he claims it repeats abuse allegations she’s made about him in the past. In 2020, Depp lost a similar case against a UK tabloid after it referred to him as a “wife-beater.”

But the internet can’t get enough. TikToks tagged with the hashtag #justiceforjohnnydepp are nearing 6 billion views, and one viral video shows an LA Starbucks with a full tip jar that reads “Johnny Depp” and an empty one with “Amber Heard” on it. Even brands are chiming in: Milani Cosmetics made a TikTok contradicting Heard’s attorney’s claim that Heard used a specific makeup kit to cover up bruises from domestic violence, saying the kit referenced wasn’t available yet.—MM

        

GRAB BAG

Key performance indicators

Sign saying "chelsea football club" Clive Rose/Getty Images

Stat: British billionaire Jim Ratcliffe announced a bid of $5.3 billion for Chelsea FC, the famed soccer club that Russian oligarch Roman Abramovich has been forced to sell. If successful, it would be the highest price paid for a sports team in history. But that’s a big “if”—multiple reports out yesterday said that a group led by Todd Boehly, the part owner of the LA Dodgers, had advanced to exclusive negotiations with Chelsea.

Quote: “People hold very strong beliefs that dog breeds are different in their behavior, but I think we have to just accept that sometimes those differences aren’t so extreme.”

A dog’s breed is not a good predictor of behavior, according to a study run by Kathleen Morrill, a dog geneticist at the University of Massachusetts Chan Medical School, and her colleagues. They suggest that a dog’s behavior predates modern breeding techniques.

Read: The new Playboy Mansion could be in the metaverse. (Morning Brew)

CARTOON

Saturday sketch

Ideas for Twitter Max Knoblauch

        

BREW'S BETS

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WHAT ELSE IS BREWING

  • ExxonMobil and Chevron posted meaty profits last quarter thanks in large part to rising oil prices.
  • The FBI rummaged through the electronic communications of up to 3.4 million US residents for a year without a warrant, per a new report from the Office of the Director of National Intelligence.
  • Tennis great Boris Becker is going to jail for two-and-a-half years for hiding assets to avoid paying debts.
  • The French are drinking a lot less alcohol than they used to.

GAMES

Brew crossword

Brew Crossword promo image

So many good sample clues to choose from in today’s crossword, but our favorite is: “watermelon or pumpkin” (5 letters). Solve the crossword here.

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Written by Neal Freyman, Jamie Wilde, and Matty Merritt

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