🍔 Fast-food’s Middle East slowdown

…and Apple’s Vision Pro has its first week on shelves   A McDonald’s location in Riyadh, Saudi Arabia (Lynsey Addario/Getty Images)   Last Week’s Market Moves   Dow Jones 38,672 (+0.04%) S&P 500 5,027 (+1.37%) Nasdaq 15,991 (+2.31%) Bitcoin $47,269 (+9.47%) Dow Jones 38,672 (+0.04%) S&P 500 5,027 (+1.37%) Nasdaq 15,991 (+2.31%) Bitcoin $47,269 (+9.47%) Hey Snackers, Breaking up via text is cold. This Valentine’s Day, Pizza Hut has a warmer option: break up via pizza. “[Goodbye Pies]( let customers personalize ’za boxes with a cheesy breakup note. Add sardines and pineapple to really drive the message home. The S&P 500 set a record on Friday, closing above 5K for the first time, after revisions to December’s consumer price index confirmed that inflation’s on the downswing. Stocks gained for the week after some strong earnings, though Fed officials suggested that the US central bank is in no hurry to lower rates. Btw... Do you want to start getting Snacks daily? Or prefer to unsubscribe? Manage your subscription preferences [here](. Stale Fast-food earnings grow stale as Middle East turmoil curbs appetite for Western brands Drive-thru doldrums… [McDonald’s]( stock had its worst one-day drop in over a year last week after conflict in the Middle East took a toll on sales abroad, contributing to the chain’s first quarterly sales miss in nearly four years. US traffic also slipped as consumers with lower incomes cut back after price hikes (see: $3 hash browns). A common factor cited by fast foodies for weaker sales was division stoked by the Israel-Hamas war. American brands like McD’s are associated with the US. - Crunch: [Yum Brands]( (parent of Taco Bell, KFC, and Pizza Hut) also missed estimates as the war hurt sales in countries like Malaysia and Indonesia, which don’t recognize Israel. [Starbucks]( also disappointed and cut its annual sales forecast, citing the conflict. - Bowlin’: Rival [Chipotle]( crushed estimates after foot traffic grew 7%. So far, the US-centric burrito icon hasn't been impacted by the global turmoil. Tough order… Western fast-food giants have unintentionally become embroiled in tensions overseas. Last month, McDonald’s said the Israel-Hamas war caused a “meaningful business impact” as franchisees in the Middle East weighed in on opposing sides. FYI: 90% of McD’s restaurants are owned by franchisees. In October, McDonald’s Israel donated thousands of meals to the Israeli army, resulting in backlash from franchisees in countries including Saudi Arabia, Oman, Jordan, Kuwait, and Pakistan. Starbucks stores were boycotted and vandalized after misinfo suggested the chain was taking sides. Starbucks sued the union organizing its workers after the group used the company’s logo to express solidarity with Palestine. THE TAKEAWAY The “Golden Arches Theory” isn’t so golden anymore… Since the ’90s, some economists have backed a globalization theory that states that countries that have McDonald’s don’t go to war against each other. But the theory showed cracks when Russia invaded Ukraine (resulting in McD’s leaving Russia). While fast-food chains want to be seen as neutral parties, reliance on local owners to run franchises abroad can complicate perceptions and hurt sales. Zoom out Stories we’re watching 20/24 vision… [Apple]( Vision Pro headset had its first week on shelves. People lined up at US Apple stores to try out the $3.5K “spatial computing” gadget, which overlays digital content on your physical space (or goes full VR). Still, curiosity ≠mainstream sales, and the mixed-reality headset costs 7X more than [Meta]( Quest 3. People have been applauding the tech but complaining about the device’s weight (1.4 lbs) and two-hour-ish battery life. Also: if you forget your password, you may have to head to the Genius Bar. Meanwhile, the US Transportation Secretary wants people to stop driving while wearing the headset (see: viral [Cybertruck videos](. Huddling together for sports… [Disney]( [Fox]( and [Warner Bros. Discovery]( are creating a streaming super team, bundling 14 sports channels into a new service. The collab will cover ~55% of US sports broadcasting rights. Pricing hasn’t been announced, but leagues’ ballooning TV deals could play a role: rights for the five major US sports leagues cost $15.4B last year — twice as much as a decade ago. As streamers including Apple and [Netflix]( score more sports content, cable could get KO’d. Live sports is what’s kept many folks from cutting the cord. Events Coming up this week Two dozen roses… and a bottle of Veuve. The romance industry is gearing up for Valentine’s Day on Wednesday. More than half of consumers plan to celebrate the love-themed holiday, and the National Retail Federation expects nearly $26B in spending on everything from prix-fixe dinners to Hallmark cards. Splurges on jewelry and flowers are expected to hit records. Love-aligned corporations including [1-800-Flowers]( and [Hershey]( which both recently reported, could see a passion-powered pop. Meanwhile, dating app giants like [Match]( and [Bumble]( could enjoy a swipey boost while love is in the air. Red envelopes and moon cakes… Dragon signs, rise up: it’s the Lunar New Year. Most Chinese consumers expect to spend $350+ each shopping for themselves and loved ones, and analysts estimate total spend could tally up to $1.1B. Luxury brands are firing up special products for the occasion (picture: Fendi bags ft. Dragonite). The holiday’s also huge for OOO messages, with 9B (yes, billion) domestic trips expected across 40 days — nearly 2X last year’s travel szn. Lunar spending could help China’s struggling economy. But as average salaries drop in major cities, folks may choose to put their dragon-themed splurges on ice. What else we're Snackin' - [BattleBots]( [Google]( renamed its Bard chatbot “Gemini” and rolled out a more powerful, $20/month version to compete with ChatGPT. With the massive costs of running AI, OpenAI and its rivals are monetizing their bots. - [CoOp]( Disney’s pouring $1.5B into “Fortnite”-maker Epic Games (that’s dollars, not V-bucks). Adding Disney IP like Star Wars and Marvel to “Fortnite” could help the media giant stay relevant with younger gens. - [Busy]( The FCC banned genAI robocalls after ~25K New Hampshire voters received rings from an AI President Biden urging them not to vote. Also: over a dozen states have passed laws curbing AI in political ads. Want your Snacks daily? The Daily Newsletter Get fresh takes on financial news every week day. Try a sample: 🏈 [The sports edition]( • Feb 9, 2024 💸 [Uber’s profit delivery]( • Feb 8, 2024 🏦 [Chase branches out]( • Feb 7, 2024 [Subscribe to the Daily]( Snack Fact Of the Day For the first time in two decades, the US imported more goods from Mexico than China last year [Read more]( This Week - Monday: Earnings expected from Avis Budget Group, Goodyear, and Monday.com - Tuesday: Earnings expected from Airbnb, Coca-Cola, Denny’s, Hasbro, Instacart, Krispy Kreme, Lyft, Marriott International, MGM Resorts, Molson Coors Beverage, Robinhood, Shopify, and WK Kellogg - Wednesday: Valentine’s Day. Earnings expected from Kraft Heinz, Sony, Sunoco, TripAdvisor, Udemy, and Wyndham - Thursday: Singles Awareness Day. Earnings expected from Airbus, Coinbase, Crocs, Deere, DoorDash, DraftKings, Hyatt, Oatly Group, Roku, Shake Shack, Toast, Wendy’s, and Yelp - Friday: Earnings expected from Bridgestone, Cinemark, and PPL Authors of this Snacks own shares of: Alphabet, Apple, Disney, Kraft, Match, Robinhood, Roku, Shopify, Starbucks, and Yum Brands Sherwood Media, LLC produces fresh and unique perspectives on topical financial news and is a fully owned subsidiary of Robinhood Markets, Inc., and any views expressed here do not necessarily reflect the views of any other Robinhood affiliate... [See more]( [Sherwood Terms and Conditions]( • [Our Editorial Principles]( • [Contact Us](mailto:hellosnacks@sherwoodmedia.com) • [Privacy Policy]( • [Advertise with us](mailto:advertising@sherwoodmedia.com) [Unsubscribe](