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Almost Time to Give Stuff Away!

Business

Airlines Busier Then Ever

Also somehow down 19% in the Arca Airline Index

The math doesn’t seem to be mathing for airlines, as air travel is increasing at record pace, but profits are not following behind.

On Sunday (July 7th) alone, TSA screened more than 3 million people - a one day record. Despite some safety issues in recent months, airline executives are predicting a record-setting summer for travelers. Number of passengers is projected to increase 6% (based on sales) in July, compared to July of 2023. However, the NYSE Arca Airline Index (which tracks 16 mostly U.S. airlines) is down almost 19% this year. The two figures are not correlating. 

Delta is down 4%, while United is down 15% over the past year. Higher payrolls and other expenses are being blamed. Some companies, because of this, have slowed hiring, if not halting it completely. 

With that said, Delta remains the most profitable airline - despite their finances going in the wrong direction.Meanwhile, JetBlue and Frontier have become money-losing operations. Because of this, JetBlue has cut a lot of its less popular flights, while Frontier (and Spirit) have done away with change fees. Spirit also warned 200 of their pilots that they could be furloughed this year. There have even been rumors of Spirit filing for Chapter 11 bankruptcy, as they have a $1 million debt payment due in 14 months.

Despite the four busiest travel days of the last five years all occurring in the past six weeks (2.7 million people on May 24th, 2.7 million on July 4th, 2.8 million on June 29th, 3 million on July 10th), the airlines are not reaping the benefits. 

Good news for travelers is that, despite all the extra traveling, airfare seems to be decreasing. According to U.S. inflation data, airfare was down 6% in May, compared to a year prior. Furthermore, the average flight between the U.S. and Europe is costing $892 this summer, which is cheaper than a year ago ($1,065). 

Meta Taking a Stand

Cracking down on hate speech

Meta announced Tuesday that it will begin removing posts that label jews as “zionists.” This latest update is part of the company's attempt to curb attacks on those of jewish faith, while still scaling that tightrope of allowing free speech. 

“We will now remove content that targets ‘zionists’ with dehumanizing comparisons, calls for harm, or denials of existence on the basis that ‘Zionist’ in those instances often appears to be a proxy for Jewish or Israeli people,” Meta said in a blog post following the announcement.

The term “zionism” is often associated with the political movement of the 19th century to create a nation-state for the Jewish people, prior to the founding of Israel. This ruling, of course, comes on the heels of the current Israel-Palenstine conflict. 

Earlier this month, Meta said it was modifying their hate speech policy to take a more nuanced approach. They have also used an independent oversight board to rule whether a term is hate speech and/or should be banned and, in this particular case, said they consulted with 145 organizations and people before reaching a decision. 

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Non-Alcoholic Beer for 800 Million Alex

But if you drink enough of them, they’ll get you messed up right?

The top dog in non-alcoholic beer might be getting even mightier. Athletic Brewing Company, who already leads the way in that space, has raised an additional $50 million in equity financing. They hope to use some of this money to expand their operations in an attempt to meet the demand for their product. 

According to NielsenIQ data, Athletic holds over 19% market share within nonalcoholic beer and is driving 32% of the category's growth. Their revenue has more than doubled over the last 18 months, as non-alcoholic beverages are on the rise.

Athletic Brewing launched its nonalcoholic brewing facilities in 2018 and have already grown to become the 10th largest craft brewery in the country, and the 20th largest brewing company overall, despite ONLY offering nonalcoholic options. That’s according to the Brewers Association rankings. 

The current generation is drinking 20% less alcohol than the previous generation, according to studies. Contributing factors are taste (over effect) and impact on mental health (in the fallout of the Covid-19 pandemic). 40% of Americans said they are trying to drink less alcohol in 2024. And Athletic Brewing is certainly capitalizing. 

This latest fundraising has doubled the company’s valuation to $800 million.

Economy

Powell See Rate Cuts Coming

But when, and will he even be here?

Federal Reserve Chair Jerome Powell is attempting to get your hopes up for the future, as he said on Tuesday that “more good data” could open the door to interest rate cuts, citing recent reports that show the labor market and inflation are beginning to cool. Music to most people’s ears.

Powell has stated all along that they would like to see the inflation rate drop to 2%, before cutting rates. However, it currently sits at 3.3%. Powell stated his concern with waiting too long, explaining that “elevated inflation is not the only risk we face.”

Powell also explained that “conditions have returned to about where they stood on the eve of the pandemic: strong, but not overheated.” He said a September interest rate cut “remains very much in play.”

Only one rate cut has been penciled in for 2024, as opposed to the previously forecasted number of three. This change was due to inflation remaining too high. The Fed’s federal fund rate has remained in a range of 5.25% to 5.5% over the last 12 months - the highest in 23 years.

The big thing to look for now, is the release of the consumer price index for June (which comes out later today). The expectation is that it will show inflation is currently at 3.1% (was as high as 9% two years ago).

In regards to Powell, he was denounced by President Trump many times during his presidency. Trump did nominate Powell for the Fed chair, but did not like his raising of interest rates. Trump has already said that if he is reelected, he will not renominate Powell. 

Business

I’ll Cancel My Trip Now

It’s pronounced “Barthelona”

Talk about a welcome committee: Barcelona protesters have started to spray visitors with water guns as part of their demonstration against tourism. What a welcoming bunch.

Many of these protestors carried signs, as they chanted “tourists go home.” The locals claim that the influx of tourists has increased their cost of living and quality of life. 

According to the data, almost 26 million people made an overnight visit to Barcelona in 2023, spending $13.8 billion. 

Seems like the residents are cutting off their nose to spite their face. However, they claim that these visits increase costs in Barcelona, put additional pressure on public services, and increase social inequality - as the profits from tourism are not distributed evenly. 

The city’s mayor announced a few ideas to help curb tourism, such as a $4.30 nightly tourist tax, and limiting the number of cruise ship passengers. He also plans to end short-term rentals for tourists by 2028, by scrapping short-term rental licenses for more than 10,000 apartments. This would help keep housing affordable for residents, as rent has increased by 68% over the past decade.

If you were planning a trip to Barcelona, you might want to change destinations.

Sports

Money Not a Concern for Serena

Good problems am I right?

Serena Williams, one of the greatest tennis players of all-time, recently admitted that she was so focused on winning, she often left her money behind.

Williams recently went on the YouTube interview show “Hot Ones”, and revealed a few anecdotes of learning financial literacy as a young professional. She confirmed the truth in the story that she did not collect her winnings her first year on the tour. 

Williams explained that her “tax guy” would have to remind her to get her money while touring. “[He] would be like , ‘You didn’t get your money?’ And I'm like, ‘Oh, I didn’t get that one in Zurich. I forgot that one in Moscow… I never played for money. I played because I loved the sport… I wanted to win,” Williams recounted.

Williams earned $94.8 million in prize money, before retiring in 2022. She made her professional debut in 1995, at the age of 14, and won her first match, which resulted in a $240 check.

Williams also shared the story of trying to cash her first $1 million check at the ATM. “I just went through the drive-thru and the guy was like, “Uh, I think you need to come inside for this,” Williams explained. 

Williams had previously explained that her father wanted her in charge of her finances as soon as she started earning money, despite still being just a teenager. 

This is the latest tale in athletes lacking financial wherewithal. There’s the famed story of Rickey Henderson being so proud of his million dollar signing bonus in 1990, that he framed the check… before ever actually cashing it…    

Or Manny Ramirez, who once got pulled over with dozens of uncashed checks in his glove compartment (he was known to keep $10,000 in cash in his glove compartment too). And in 1996, found three paychecks at the bottom of his locker, after the Cleveland Indians realized he wasn’t cashing his checks. Or, the time he left $25,000 in the clubhouse, only for it to be discovered by an attendant during the offseason. 

Ahh, certainly all good problems to have - forgetting some of your money or figuring out how to cash a $1 million check.

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