The Best One Yet - The trade war hits Defcon iPhone, Kellogg surges (because, snacks), and Canada Goose falls on un-wokeness

Episode Date: August 2, 2019

Kellogg enjoyed its best day in two decades even though cereal sales are struggling big. Canada Goose removed a single word from its website, causing the stock to drop Thursday. And stocks fell because of the trade war — you’re going to finally notice the tariffs that hit consumer products. Learn more about your ad choices. Visit podcastchoices.com/adchoices Hosted on Acast. See acast.com/privacy for more information.

This is Nick. This is Jack. This is snacks daily. It is Friday, August 2nd, and this is the best one yet. Wow. I've never done it that one before. We didn't have practices at all. Now, stocks dropped badly.

Really again. Second day in a row. What are you doing? It's like a trend here. Big reason? One of our three stories. Exactly. We're going to jump into all three.

How about we hit them right now? We'll kick it off with Canada Goose. Its jackets are incredibly expensive. Very true. But they always said that the animals in the jackets were humanely done. Big air quotes there. Shares fell 5% yesterday because the website got changed in a big way that reflects all of us. This is about ethics and wokeness.

And animals. Second story, Kellogg's just had its best day in nearly two decades. We got one big word for you. That's the reason why. Snacks. Our favorite word. A lot of S is on it. Third and final story.

The Trade War is the worst it's ever been. What DefCon did it just hit? DefCon Apple. Defcon iPhone. Defcon iPhone. This is the biggest update we've done on the trade war, and it all has. happened in Shanghai yesterday. Now, Snackers, before we jump into all that, happy 31 to Shark Week. Yes, this is the 31st Shark Week ever. You know what else is 31? 31.

Boom, you're listening. You and me, baby. Here we go. Going on 28. 31, feeling 21. On the elder side of the millennial scale. Now, Shark Week itself has gotten wild this year. They're only three days left. Vans is launching like a Shark Week shoe. Cape Cod has literal sharks every week. And then actual Shark Week shows, it's gotten like a little theatrical for us. One of the shows is called Isle of Jaws. Blood Brothers. The other one is called I Was Prey and they're both happening tomorrow now. Now any shark story is close to home for me because my little brother Teddy got attacked by a sea urchin. True. It can happen in a landlock state. And my grandfather, Hal Stamer, he punched a shark in the face. Alleged. This story may have evolved

over time. Now we know what you're thinking. We're talking Shark Week. What are the five tips that we have here at snacks to survive one? Don't panic. Number two, maintain eye contact. Number three, If it fights, you fight back. Number four, whatever you do, don't ever look at the wound. And number five, this is a big one. This one is critical. Listen to these important words before our three stars. It's daily.

We spoke to the lawyers and we got to get something legal out the way. It's snacks about to hear rain food. It's air candy. They don't reflect the views of the robberhood family. It's all informational just so. You know, we're not recommending any securities. It's not a research report or investment advice. Not an offer or sale of a security.

Snacks is digestible Business news for you Robberhood Financial LLC Member Fenra Slash SIPC For our first story Kellogg's just had its best day

In like almost 20 years Because of one thing Snacks Snacks I looked through the investor deck of Kellogg's It was delightful Snacks

This is so meta Good clean Midwestern values Now we jumped in They also do egos They do a lot of things But let's just cut to the chase here Because there was There was just one big problem

Cereal Cereal has been a problem them for Kellogg's for a while. Let's get it over with sales for cereal fell 5%. Yeah, we're talking about frosted flakes, corn flakes, other flakes. It's like inspired things. And the company's also having some tough times. It's based in Battle Creek, Michigan. Great town. It's laying off 150 workers right now, and it recently had to sell its Kebler elf for cookie division. You know, the charming elves, not the scary ones. Now, on a lighter note, true, have you heard about this baby shark video? Nothing to do with the Shark Week thing we mentioned. Baby Shark Week. Da-da-da-da-da. If you're a

A new parent? Apparently, this is big. You know what we're talking. Apparently, kids can't stop hearing it. It's a YouTube video. Well, Kellogg's a sensation. Decided to team up with the South Korean team behind it, and they're doing like a joint cereal.

So maybe that can help. Baby Shark cereal could go viral in kids bowls. So we know what you're wondering. The stock surge 9%, which is huge. 9%. That's the highest surge since 19 years. We're talking about an over 100 year old like cereal company. How did that happen?

Not cereal. Snacks. Exactly. Convenient on the go. Snacks. That's the point here. A wild stat in 1970, 60% of Americans ate one snack or more per day. Now, I got a second wild staff for you that rounds this out.

In 2016, 93% of Americans were having at least one snack a day. Okay, let's pause for a second. Please. Snacks are in. And can we talk about why? Please. I think we're just like busier and on the go more. I want to unwrap something and eat it while I'm talking to someone and pretending that I'm listening.

I want to like multitask and travel and have a snack in my bag for whatever I need. I've got them in my pockets right now. So Kellogg's has Pringles, Cheez-It's, those both rose by 4% in North America. They've also got Rice Krispies, Pop Tarts, and R.X bars, which are all part of its like snack game biz. Now, outside of Kellogg's, other packaged goods companies, Mondalez, has been driven by nutbutters. Hershey's has been seeing its bag candy, like the smaller bags, take off. ConAgra, another publicly traded packaged goods company. This one is personal for Jack.

They got these little popcorn bags that, like, guarantee you there's only... 100 calories in that? You guys should see Jack smiling right now. I love popcorn. I have to stop mid-pod sometimes and wipe the like white cheddar off of this guy's face. Yeah, but it's all natural white cheddar. It's adorable. He can't stop himself. So we're talking convenient midday snacks on the go. Because people aren't like sitting down and having oyster lunches with six martinis anymore. Yeah. And what about those heavy happy hours that offices used to do? Not a thing. It's not madman. Instead you have a kind bar and a banana. So Jack, what's the takeaway for our buddies over at Kellogg? Kellogg's needs to repeat exactly what it did with RX Bar.

RX Bar. Before we get into that, the game plan, this is how Kellogg's does it. It acquires an innovative company. It scales the business through its distribution capabilities, and then it launches spin-offs of that brand. So, RX Bar. You've probably seen it in a grocery store anywhere. Two egg whites, one date.

Right. They're colorful. Or walnuts. I like the maple flavor with sea salt. It tells you exactly what is in the bar. Right. It's the health food bar. It's become the fastest growing health food bar like ever, and it kind of sticks on your

teeth, but it's cool. Now, there's a reason it's the fastest. growing health food bar. It got acquired by Kellogg in 2017. Boom, that's part one in the game plan. And then Kellogg applied its distribution machine to RX Bar, got it on every store, on every shelf in the country. Boom, step number two. That led to nearly 20% growth. And then what's the third step here, check? Spin off RX Bar into other things that aren't necessarily bars. We also learned that RX Bar is launching an oatmeal version of its exact same flavors. I like the sound of this, because when you're traveling and you want a healthy breakfast, a little oatmeal pack that you have to pour

hot water into? Sounds good to me. The popcorn guy thinks it, Kellogg's repeat it. For our second story, this one goes out to all the lawyers out there. Canada Goose just fell out of the sky by like 7% at one point on a single word. Hit shareholders on the head and that single word was ethics. Now, we're talking about the company that makes $900 park. The kind of thing your buddy Tim splurges on and then runs around the Upper East Side just showing off. We get it. It's huge. Put it on the plastic, babe. Put nine people in that coat. So the New York Post reported something that reporting on here in snacks. Are we re-reporting? We're re-reporting the New York Post, something I'm not sure we've ever done. But it says that Canada Goose might not be as ethical as it claims. So Canada

Goose sources geese down for its coats for like the inside, and then it sources coyote fur for like the outside. Anything fluffy about a Canada Goose jacket? Yeah. Comes from animals. If it's potentially adorable, it could be in there. And Canada Goose is bragging about the ethical way that it sources down and sources fur. Right. On its website, it talks about how we source geese humanely. And we source coyotes from overpopulated areas, where the coyotes can kill pets and sometimes attack people. Again, direct quote. So like if you're anti-fur because you're killing animals, Canada Goose claims it's a good thing that they're killing these animals.

So turns out PETA got a video of some geese who were being used in Canada Goose jackets at some point in the supply chain and they weren't being treated well. They were being like manhandled and grabbed by their necks. Now, Canada Goose. Don't watch this video. It's not pleasant. Now, Canada Goose denies that this was part of their supply chain, but PETA decided to take this to the FTC. PETA, of course, being people for the ethical treatment of animals. And the FTC being the agency that oversees commerce. Well, the Federal Trade Commission.

Exactly. And they were looking into this because if this turned out to, in fact, be true, it would mean that Canada Goose was misleading in their advertising. Yeah, I mean, they basically means that they could be lying, which is illegal for a company like this. So what happened yesterday is that basically all the ethical stuff that was up on Canada Goose website, boom, knock down like a peg or three. Yeah, the New York Post noticed this. So there used to be this traceability video, which showed where all the geese came from that are, that end up in Canada Goose jacket. Canada Goose not only removed the video, but they changed critical wording. It used to say, we ensure ethical sourcing. And now it just says we're committed to ethical sources. Huge difference in those words.

I'm committed to getting in shape. I'm not ensuring that I'll get in shape. It's incredible. Jack's having a wedding in two weeks. We're having pizza tonight. Now, the lawyers probably told them to change. We will ensure to we're committed to. That's a big difference. New York Post noticed it and Wall Street did too. If you're trying to hang out with some lawyers at your office, share this story with them. They will appreciate it. So, Jack, what's the takeaway for our buddies over Canada Goose? This story highlights the market value of wokeness and the market cost of unwokenness. The definition of wokenness being the awareness of social justices and then acting accordingly. Yes. Nike has shown some wokenness.

with support of Colin Kaepernan. Patagonia has shown wokeness when they decide to donate profits on certain days directly to climate change. Gillette has efforts to show wokeness by like attacking toxic masculinity that used to be in some of their commercials. And we've seen stocks respond accordingly. Additionally, Victoria's Secret has had an unwokeness problem. Has a long track record of objectifying its models and recently has reports that its CEO was in tight with Jeffrey Epstein.

And the stock actually fell after that. Consumers are rewarding stocks for wokeness. and Canada Goose is a victim of unwokeness. Now we'll see if that unwokeness hurts its sales. For our third and final story, we've got an alert. Trade War, the Trade War, just hit Def Con Apple. All Apple products will now have a tariff starting September 1st. The trade war has been dripping for a while, but...

It's been a psychological abuse situation to markets. It is highly cyclical. How does it go again? You got a truce. You got a compromise. You got a photo. You got a summit. Meeting in China, meeting in Shanghai, meeting in threat.

You got a... You see, you've got a conciliation. It has just been 19, 20, 30 months of pain for markets. Straight up, Regina George, are you sitting at the lunch table? Are you not sitting at the lunch table? Now, here's what matters. Half of things that are made in China and shipped to the U.S. have been untouched so far from the trade war. Until yesterday, when it was announced that starting in September, the other half of things that were not tariffed that were made in China are going to get tariffed. We're talking about $300 billion worth of goods that the United States imports from China. It gets a 10% tax. a.k.a. Tariff starting September 1st. Now, you're probably wondering what caused the government and President Trump to do this? Broken promises. Sounds like a frank ocean out. It does. China has offered

a bunch of concessions to President Trump to try to get him to chill out with the trade war. We're talking things like China promises. You know what? We're going to buy more U.S. agriculture products like soybeans. They also promised to stop selling the United States fentanyl, which is a dangerous and addictive drug that is killing people. But neither of those promises ended up happening. And some are wondering if they're like waiting for a new. president to come along in like a couple years. Yeah, maybe China's thinking November 2020, there could be a new president. So let's just wait this thing out and hope that President Trump doesn't hold us to our promises. So governments like China can wait it out. Markets can't wait

out. No, oil. The price dropped by 8% yesterday on concern that global trade will slow down. The S&P 500, a great reflection of the overall stock market fell by 2% yesterday. General Electric, Caterpillar, both of their stocks dropped 4% the moment after President Trump, Trump escalated the trade. Both are highly tied to economies. So Jack, what's the takeaway for our buddies who are everyone who's listening? We're going to quote our buddy George Zimmer, founder of men's warehouse. You're going to notice these tariffs. We guarantee it. Yeah, you got to get that raspy voice in there. So far, tariffs have been on like low-cost political things, things you don't even care about or see every day. Like steel. Steel. Machine. Who's doing the machines? These things

are bought by businesses. They're not bought by consumers, aka voters. But this next 10% tariff, the one hits next month, it's all like consumer stuff. You're going to notice this stuff. iPhone XS. It's going to cost $40 more because of this 10% tariff. Macbooks, clothing, shoes, AirPods, toys, like 85% of toys are made in China. Yes. And now all of these things are getting a 10% tariff. So they're either going to cost 10% more or the company that sells them is going to take a 10% hit. Apple stock dropped 2%. In the meantime negotiations are going to continue. Jack, can you whip up the takeaways for us? Kellogg's is finally finding growth in snacks to offset shrinking cereal. So let's talk about snacks, baby.

This is good. Second story, Canada goose might not be as ethical with animals as we thought. Big difference in insurer versus commitment. Lawyers get it. They love this kind of stuff. Third and final story, new tariffs on China are hitting the stuff you'll actually notice. Consumer goods from China. Whatever you're listening to this thing on, it's probably going to be effective.

Probably. Probably. Probably. Probably. Now, time for our snack factor the day. I'm not going to lie. This one concerned us. It's from Drew Christopher from Atlanta, Georgia, who hit us up on Twitter.

Drew, this was freakishly good. Almost 30% of delivery drivers admit to taking food from an order before delivering it to that person. At some point, we're talking about a survey of Uber Eats, Grubhub, DoorDash. Postmates. It's wild. Now, you thought that seafood carbon harvest should have had seven shrimp instead of four? You're not the only one. That's almost the end of the pod.

The end of the pod is this. If you talk to a buddy this weekend, we hope you do. Tell them the reason that you listen to snacks daily. Now, you're going to be at a wedding. You're going to be at a brisk. You're going to be doing something with people involved that involve small talk. Find somebody and tell them. You'll listen to Snack Daily.

And tell them why. It'll make it a T-Ball. It'll help us grow. We can't wait to see you guys on Monday. I'll be in Michigan at a wedding. I'm going to try mountain biking again. Talk to you Monday. The Robin Hood Snacks podcast you just heard reflects the opinions of only the host

who are associated persons of Robin Hood Financial LLC and does not reflect the views of Robin Hood Markets, Inc. or any of its subsidiaries or affiliates. The podcast is for informational purposes only and is not intended to serve as a recommendation to buy or sell any security and is not an offer or sale of a security. The podcast is also not a research report

and is not intended to serve as the basis of any investment decision. Robin Hood Financial LLC, member FINRA, SIPC.