Stifel Bits

August 9, 2023

The Appetizer

“Everybody paid for a space. Don’t lean on other people. Don’t fall asleep on other people. Don’t drool on them, unless you’ve talked about it and they have a weather-resistant jacket.”

  • An American Airlines pilot who gave a pre-flight speech to his passengers on proper manners.

Now, on to the numbers. Drum roll, please …

  • 46,000 years: How long an individual roundworm survived frozen in the Siberian permafrost before being recently revived.
  • 99.7%: The efficiency of chitin-zinc batteries after 400+ hours of use, based on a recent study. It may become a potential lithium battery replacement.
  • 2.3: The magnitude of seismic activity caused by a recent Taylor Swift concert in Seattle, dubbed the “Swift Quake.”
  • 29.3 inches: The amount of rainfall over a four-day span in late July in Beijing, the city’s heaviest rainfall since 1891.
  • $17,777.76: The pay for Mattel’s new “Chief Uno Player.” The role will require four hours of attendance per day, four days a week for four consecutive weeks.

Dig In
U.S. Debt Downgrade

Know that feeling when your FICO score unexpectedly dips a little? (“What?”) The U.S. government shared that sentiment when credit rating agency Fitch downgraded U.S. debt to the agency’s second highest rating, “AA+,” from “AAA.” Fortunately for investors, it may not mean a whole lot in the long run.

If you remember way back to June, Washington officials narrowly avoided a government shutdown after months of negotiations. Unfortunately, that game of chicken was one of the reasons Fitch opted to lower the credit rating. By the way, there’s the potential for a government shutdown this fall.

The move has precedent: Standard & Poor’s lowered its rating of U.S. debt back in 2011 after a similar budget standoff. In the short term, the S&P 500 sold off 6.5%, and the lower rating cost the government an extra $1.3 billion in interest. Longer term, the downgrade had no effect on U.S. Treasuries’ perception as the world’s safe haven investment, and supply and demand pushed interest rates back down.

After Fitch’s recent downgrade, the S&P 500 only fell 1.4% before stabilizing. That’s good news for investors. Remember past performance doesn’t indicate future results, but the Treasury market should be fine in the longer term.

Weekly Specials

Wonder how long it would take (and how much it would cost) to travel to every country in the world without flying? A Danish man did it in 10 years on approximately $20 per day. He initially projected the trip would take about four years to reach 203 countries, but occasional visa issues and a little something called COVID-19 extended his trip.

China wants to crack down on the amount of time children and teens spend on their phones by creating a “minor mode.” A proposed rule would require all devices and apps to build in the new mode, which limits screen time to fewer than two hours for people 18 and under, and blocks their access between 10 p.m. and 6 a.m.

Ever regret hitting the “send” button? Someone at NASA sure does after accidently sending the wrong command to the 46-year-old Voyager 2 spacecraft traveling billions of miles away. The command shifted the craft’s antenna, cutting communications with earth. Fortunately, the craft has a periodic reset function that will fix its orientation sometime in October.

The July jobs report provided some good news as the Federal Reserve continues its pursuit of a soft landing. The U.S. economy added a healthy 187,000 new jobs, while the unemployment rate fell to 3.5%. The need for another rate hike in September remains TBD, so we’ll have to wait and see how the upcoming inflation readings and August jobs report shakes out.

If there’s one thing that’s clear about the Women’s World Cup, it’s that the rest of the world has arrived. After winning the previous two World Cups, the U.S. team saw stiff competition from the Netherlands and Portugal in group play before losing to Sweden in the knockout stage. With the U.S. and several powerhouse teams already out, this year’s favorite appears to be anyone’s guess.

Corporate Lunch

The American brand Jeep has posted lower sales for eight straight quarters, falling from sixth to ninth in sales among top U.S. brands.

Apple’s iPhone 15 and 15 Pro will reportedly be compatible with the USB-C charging port and feature titanium edges, which has been a long goal for Apple.

Amazon is bringing reimagined convenience to life as it says it’s delivering more packages in one day or less.

Adidas signed a $1.1 billion kit deal with Manchester United, renewing their partnership for the next 10 years.

A U.S. judge shot down Johnson and Johnson’s second attempt to put its talc liabilities into bankruptcy, citing the court “smells smoke, but does not see the fire.”

Exxon Mobil is in talks with Tesla, Ford, and Volkswagen to supply lithium, despite Exxon having no way yet of producing the battery metal. I guess Exxon is calling “dibs?”

After Overstock came to the rescue, Bed Bath and Beyond is back … just in time for college move-in season, but only via online shopping for now.

Starbucks reported record sales as consumers splurge on complex coffee drinks. I wonder how many plain black coffee orders they get a day.

Uber is finally profitable, reporting a profit of $394 million compared with a loss $2.6 billion a year earlier.

Lamborghini could hit 10,000 car sales this year for the first time, with the U.S. being its largest single market with 1,625 deliveries.

drawing of a table setting

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