⛽ Big Oil’s $100B+ bet

…and Apple's "Scary Fast" event before earnings

Gassed-up investment (David McNew/Getty Images)

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Last Week's Market Moves   Dow Jones 32,418 (-2.14%) S&P 500 4,117 (-2.53%) Nasdaq 12,643 (-2.62%) Bitcoin $33,854 (+14.06%) Dow Jones 32,418 (-2.14%) S&P 500 4,117 (-2.53%) Nasdaq 12,643 (-2.62%) Bitcoin $33,854 (+14.06%)

Hey Snackers, Living in Halloween town isn't as fun as it sounds: residents of Salem, Massachusetts, where the 17th-century witch trials took place, are experiencing trials of their own as 1M costumed spooky-szn tourists jam the streets and sidewalks — not to mention that scary Dunkin' line. The market had a rough week, dragged down by falling tech stocks after big-name earnings. The Nasdaq lost 2.6%, and the S&P 500 entered correction territory on Friday (aka down 10% from its July peak). The Fed's favored inflation gauge spiked to a four-month high, but traders don't expect the US central bank will hike rates at its meeting on Wednesday. Btw... Do you want to start getting Snacks daily? Or prefer to unsubscribe? Manage your subscription preferences here.

Consoil-idation

Oil titans go on a buying spree, betting that a green future is a distant future Barreling forward… Big Oil's had a slick month, sealing two massive deals. First, ExxonMobil said it's buying Pioneer Natural Resources for $60B — Exxon's largest oil-and-gas acquisition since it merged with Mobil in 1999. The deal would double Exxon's control of the US's highest-producing oil field, the Permian Basin. Then Chevron bought rival Hess for $53B in a deal that would expand its footprint in the States and abroad. Black gold rush: The acquisitions are a big bet on future demand for American oil, and could be the beginning of a land grab, as major cos acquire smaller competitors for primo access to coveted fields. Profit flush: Oil giants have plenty of $$ to spend after having a better 2022 than Corn Kid. The five biggest Western oil cos raked in $200B in profits last year, with Exxon's $56B annual windfall setting an industry record. Green isn't the new black?… For years, oil giants touted their renewable-energy commitments with idyllic, nature-filled commercials. Now oil execs aren't being shy about betting big on a gassy future. The day after Chevron's acquisition, the International Energy Agency said that gas and oil demand would peak by 2030, and then drop off as renewable energy rises. Pioneer's CEO responded that all the oil bigwigs disagree, and that the IEA doesn't understand oil demand. ReNoable: BP (which reports tomorrow) significantly walked back its 2030 goal to slash gas production by 35% of 2019 levels. Deflated: On the other side of the pump, GM ditched its goal of building 400K EVs by mid-2024, as automakers start to second-guess the electric market. THE TAKEAWAY Being bigger could cushion the fall… When fossil-fuel demand eventually wanes, oil cos that ate up smaller rivals might be better positioned to keep their prices competitive. Execs also say consolidation frees up more funds to invest in clean technologies (like carbon capture and hydrogen fuel). FYI: it's estimated oil reserves will run out by as early as 2052. But if the world goes green earlier than they expect, Big Oil could be left with a glut.

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Events

Coming up this week Spooky sales… Apple reports Thursday, but first it's hosting a "Scary Fast" event today. It's expected to introduce fresh iMacs that run on its next-gen M3 chip. (Last month, at its "Wanderlust" showcase, it rolled out iPhone 15s, feat. a buffed-up camera.) With these flashy reveals, Apple hopes to boost hardware sales, which've been sagging. In Q3, Apple's revenue fell 1% from last year as iPhone, iMac, and iPad sales shrank. Services were a bright spot, which may be why Apple just raised prices for subs like Apple TV and News.  Budget-lipstick effect… Estée Lauder could drop not-so-stunning results when it reports Wednesday. The premium beauty behemoth swung to a quarterly loss in August, and sales grew just 1% to $3.5B. The La Mer parent has struggled in China (which makes up a third of its revenue) after an underwhelming rebound and soft duty-free spend. But budget beauty brand E.l.f.'s quarterly sales surged 76% and it hiked its annual guidance as thrifty shoppers grabbed its $7 concealers and lipsticks. E.l.f. is expected to keep the glow-up going when it reports.

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Zoom out

Stories we're watching Hands on the wheel… California's DMV axed Cruise's permit to operate autonomous cars in the Golden State, saying the GM-owned biz's tech isn't safe for public roads. On Friday, Cruise said it was pausing all driverless operations in the US. One San Francisco gov't agency stat: over six months last year, Cruise cars had an injury-crash rate 6X higher than the 2021 national average for human drivers. It's a costly detour for GM, which hoped Cruise could hit $50B in revenue by 2030, but rival Waymo says its driverless whips are still running in SF, LA, and PHX. All gas… no brakes. VC Marc Andreessen's 5K-word manifesto on "techno-optimism" (a view that tech can fix any problem) is the talk of techie town. In it he argues that slowing down AI growth "is a form of murder," includes the quote "love doesn't scale," and largely denounces regulation. This year, 190+ AI-related bills were intro'd in the US, and several AI companies were hit with copyright lawsuits. Andreessen (who's backed ~28 AI startups since last year) is bullish, but only 10% of Americans think AI helps more than it hurts.

What else we're Snackin' Cure: Lululemon's founder said he'd spend $100M to find a cure for his muscular dystrophy. The goal is to push through drug development's "Valley of Death," where research dies partly because of a lack of funding. Carware: After ditching Apple CarPlay and Android Auto, GM released open-source APIs to let developers build apps for its vehicles. Automakers are increasingly embracing software (and its subsequent fees). Green: The US and EU extended a deadline to negotiate a deal aimed at reducing carbon-heavy steel and aluminum production. Failure to reach an agreement could revive Trump-era tariffs on $3B+ worth of EU exports.

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Snack Fact Of the Day Americans are expected to drop $3.6B on Halloween candy this year, up 16% from last year Read more

This Week Monday: Earnings expected from Denny's, HSBC, McDonald's, Pinterest, and SoFi Tuesday: Halloween. Earnings expected from AB InBev, BP, Caesars, Caterpillar, JetBlue, Match, Pfizer, Shutterstock, and Sonoco Wednesday: First day of Native American Heritage Month. The Fed's rate decision. September job openings. Earnings expected from Airbnb, Allstate, Avis, Cheesecake Factory, Coca-Cola, CVS, DoorDash, EA, E.l.f., Estée Lauder, Eventbrite, Garmin, Kraft, MetLife, Mondelez, PayPal, Qualcomm, Roku, Toyota, Wayfair, Wingstop, Yum Brands, and Zillow Thursday: Earnings expected from Apple, Block, Cigna, Cloudflare, Coinbase, ConocoPhillips, Crocs, DraftKings, Dropbox, Expedia, Ferrari, Gannett, Hyatt, Live Nation, Marriott International, Moderna, Molson Coors, Palantir, Papa John's, Redfin, Shake Shack, Shell, Shopify, Starbucks, Subaru, Sweetgreen, Wendy's, and Yelp Friday: October unemployment rate. Earnings expected from BMW and Cinemark Authors of this Snacks own shares of: Apple, Block, CVS, Exxon, GM, Kraft, Match, Moderna, Roku, Starbucks, Shopify, and Yum *Advertiser's disclosure: Clients will receive a lender credit of $1,000 when they lock a loan on or after October 20th, 2023, utilizing the Snacks Newsletter application link. Offer cannot be retroactively applied to previously closed/locked loans. Offer does not apply to new loans submitted through non-retail loan originators, including brokers. Additional restrictions apply. Rocket Mortgage reserves the right to cancel/modify this offer/terms/conditions at any time. Acceptance of this offer constitutes acceptance of these terms and conditions. Offer is nontransferable. This is not a commitment to lend. Offer not valid with any additional discounts or promotions. ©2000-2023 Rocket Mortgage, LLC. All rights reserved. Lending services provided by Rocket Mortgage, LLC. NMLS #3030; www.NMLSConsumerAccess.org. Equal Housing Lender. Licensed in 50 states. For additional information please visit rocketmortgage.com/ legal/disclosures-licenses.

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