May 25, 2022

Today's Topics

Hi! We have 3 charts for you today exploring:

  • SNAP: back to reality. Snap Inc. is not feeling great about 2022.
  • Babies. The birth rate in the US went up last year.
  • Bitcoin. Is there a case for it being "digital gold"?
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This week Snapchat spooked the digital advertising world as it warned that the economy had deteriorated further and faster than it had anticipated. Investors, who have already fallen out of love with tech this year, didn't need to hear much more and sold SNAP shares aggressively, sending them down 43% yesterday.

SNAP: back to reality

Sometimes it's hard not to use the roller coaster analogy when talking about a stock — this is one of those times.

Beloved by Gen-Z (Snapchat had more Gen-Z users than even TikTok had last year), Snapchat has been slowly maturing since its IPO in 2017. Despite its best features being borrowed and copied, SNAP's 12-month revenue is up 9x and its daily active users have exactly doubled (to 332 million) and yet the company's share price is now half where it was after its first day of trading back in 2017, having hit the highs of $83 as recently as September 2021.

SNAP's warning has everyone worried that the advertising market is about to take a serious turn for the worse. Despite Snapchat's relatively modest size, the news rocked Meta, which saw its share price fall 8%, Twitter (-6% yesterday) and Pinterest (-24%).

The birth rate in the US rose last year, for the first time since 2014, with more than 3.65 million babies born in America in 2021 according to preliminary data from the CDC. That's up around 1% on the previous year, and reverses a seven-year trend of falling births.

The rise in births means that, despite a marked increase in total deaths from COVID in the last two years, the US population naturally grew by around 198,000 people in 2021. That's the lowest margin between the two that we could find data for (thanks WSJ for the inspiration for this chart).

Baby boom?

Although a 1% rise is significant, it's not exactly the "baby boom" that some had joked about during the early days of the pandemic. The total fertility rate - which estimates the average number of babies a woman would have over a typical lifetime - was 1.66, below the widely-accepted figure of 2.1 that would keep a population in a steady state over multiple generations (not growing or declining).

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Bitcoin = digital gold?

Bitcoin has often been likened to a digital version of gold — which for years has been a safe haven asset, known as a trusty "store of value" when times have been more uncertain. But the evidence for bitcoin fulfilling a similar role is hard to find, in this year at least.

Indeed, the data for 2022 suggests the price of bitcoin often moves in the same direction as stocks, rather than the opposite. Of the 98 trading days we've had so far, Bitcoin and the S&P 500 Index have moved in the same direction on 73 of them, while moving in the opposite direction just 25 times. The biggest moves in stocks, like when US stocks fell 3.2% on May 9th, also came with large moves in BTC. For the stats nerds the correlation between the two has been +0.53 for this year.

Bitcoin (and crypto more broadly) has transitioned from a fringe asset into one with huge institutional backing — Coinbase just became the first crypto company to join the Fortune 500 — but its role as "digital gold" is hard to rubber stamp until it's weathered at least one sustained major economic downturn.

More Data

1) A survey of more than 33,000 Americans sought to find the definitive ranking of America's most reputable brands.

2) The tragic shooting in Texas that claimed the lives of 19 children and 2 adults yesterday was the 27th school shooting in the US this year.

3) Controversial WeWork founder Adam Neumann is back — this time he's raised $70m as a co-founder of Flowcarbon, a start-up looking to facilitate the sale of carbon credits on a blockchain.

4) "A photo of a raccoon wearing an astronaut helmet, looking out of the window at night" — just one example of what Google's latest AI text-to-image generator can produce.

5) Real estate. Hedge funds. Private equity. Infrastructure. Precious metals. The Entrust Group lets you invest your retirement fund in any asset the IRS allows — including those that are typically reserved for folks on Wall Street, not main street.**

6) New York officials have removed the very last public payphone in New York City. At one point there were more than 6,000 in the city.

7) If we had to pick just one chart to explain what's happened to stocks / the economy in the last few years this would be a pretty strong contender.*

*This is sponsored content.

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