February 23, 2022

The Appetizer

“The biggest challenge of my training program was to be able to keep wanting to do it. Motivation was key. If something kept me motivated, I considered it to be good. Sometimes all I needed was a beer, or eight beers.”

Nils van der Poel, Swedish speedskater who just broke two world records. Sometimes, a cold, relaxing brew is all that is needed.

Now on to the numbers. Drum roll, please …

• -9.5%: the S &P 500 return so far this year, through 2/22/2022.
• 3%: Russia’s GDP as a percentage of the global economy.
• 404 million: the number of Instagram followers for Cristiano Ronaldo, the platform’s most-followed person.
• $450k: the amount a Virgin Galactic space flight will set you back. Trips will last about 90 minutes.
• 2.5 million: the estimated number of U.S. weddings in 2022.

Dig In
Semiconductors: The New Oil

Oil fueled the rise of modern economies; semiconductors will power the digital economy.

These days, the pandemic-fueled semiconductor shortage has become the topic of kitchen table conversations. But what exactly are semiconductors, and why can’t we just make more? Simple answer: they’re very complex and not cheap. Think billions of dollars.

Semiconductor chips make electronic devices work. The smaller the chip (measured in nanometers), the more powerful it is. Most computer chips today use seven-nanometer technology. For reference, an average human hair is 100,000 nanometers wide!

The shortage is estimated to have impacted 169 industries in some way, even those you might not associate with semiconductors, like soap manufacturing. So countries are aiming to reduce their reliance on foreign chip manufacturers by turbocharging their own semiconductor industries.

If you read last week’s Bits, we talked about U.S.-China competition, and this is another prime example. China has set a goal to make more of its own chips, but so have the European Union and the United States.

Semiconductors serve as the backbone for modern society, powering data centers, wireless networks, and artificial intelligence. The industry’s future growth outlook is positive.

Weekly Specials

The moral of this avocado story? Don’t mess with U.S. safety inspectors.

What’s next? It seems that each day we’re learning of another company raising prices. Over the last week, LVMH, Burger King, and Heineken announced price increases. A better question is what hasn’t gone up in price? Smartphones, cosmetics, and recreational books. Believe it.

Surprise, surprise – the Federal Reserve (Fed) minutes revealed no surprises. The Fed believes it will “soon be appropriate” to raise rates and that a faster pace of rate hikes “would likely be warranted.” Markets view a 25-basis-point hike in March as a done deal and are betting on five more before the year is over.

We’re all nervous about the Russia-Ukraine tensions, but a survey of 12,000 people globally listed global warming, habitat destruction, and extreme weather as the top three risks. Federal scientists warned that sea levels on the U.S. coasts could rise by an average of one foot by 2050.

Corporate Lunch

Eighty-four percent of the companies in the S&P 500 have reported earnings. Of those, 77% beat analyst estimates, and expectations are that earnings grew 30.9% in the fourth quarter.

AirBnb said it has 25% more nights booked for summer travel versus this time in 2019, a signal that we can expect more unopened e-mails come summer Fridays. DoorDash reported that a record number of people placed orders in the fourth quarter.

Justin Bieber added one more fan in the 45-54 age demographic. The CEO of Restaurant Brands International said he’s a Belieber after a partnership with Justin boosted sales this past quarter.

ViacomCBS is renaming itself Paramount to emphasize its streaming service.

Apple’s next software update will allow you to unlock your phone without taking off your mask.

JPMorgan opened a lounge in the metaverse, featuring a roaming tiger and a portrait of Jamie Dimon. Paying homage to the naval motto, “ship, shipmates, self,” Meta Platforms (fka Facebook) wants its employees to adopt the motto, “Meta, Metamates, Me.”