Good morning. Your word of the day: "bombogenesis." - Definition: Bombogenesis describes when a storm undergoes a sudden and significant drop in atmospheric pressure, transforming it into a…bomb cyclone.
- Use it in a sentence: Later this week, a storm is expected to undergo bombogenesis and slam the Northeast on Saturday with snow measuring in feet.
To all the entrepreneurial kids who run a snow-shoveling service for your neighborhood: Now's the time to set up your QuickBooks. —Neal Freyman, Jamie Wilde, Matty Merritt | | | |  | Nasdaq | 13,542.12 | | |  | S&P | 4,349.93 | | | | | Dow | 34,168.09 | | | | | 10-Year | 1.869% | | | | | Bitcoin | $36,519.61 | | | | | Microsoft | $296.71 | | | | *Stock data as of market close, cryptocurrency data as of 6:00pm ET. Here's what these numbers mean. | - Markets: Stocks were chilling solidly in the green until Fed Chair Jerome Powell tapped the mic and explained that the Fed was planning to start hiking interest rates in March to combat soaring inflation. Then, they tanked and Treasury yields rose sharply higher. Microsoft still had a solid day after its superb earnings report offered bullish signs for the entire software industry.
| | Pool/Getty Images Come springtime, when we won't have to worry about bombogenesis or cracked skin, the Federal Reserve is planning to raise interest rates, the central bank announced yesterday. - In the Fed's words: "With inflation well above 2 percent and a strong labor market, the Committee expects it will soon be appropriate to raise the target range for the federal funds rate."
- This time in English: "We're probably going to hike interest rates after our next meeting in March."
It'll go down in the history books. It would mark the first time the Fed has raised borrowing costs since 2018 and serve as a powerful symbol of the economy's recovery from the depths of the Covid recession, when the Fed lowered interest rates to near zero. Of course, the Fed wasn't always going to raise interest rates this March, but sky-high inflation changed the calculus. President Biden, Fed officials, and Chicago-based options traders have all become increasingly concerned over rising prices, which forced the Fed to course-correct in December and plan for a series of rate hikes this year. The view from Wall Street Worries over rising interest rates have pulverized the stock market this year—and tech stocks in particular, which become less attractive when bond yields go higher (as they have been). - The S&P is down 9.31% YTD, putting it on track for its worst start to a year ever.
- The tech-focused Nasdaq has slid into correction territory, down nearly 15% YTD.
But… rising interest rates don't always spell doom for the stock market. Quite the opposite, in fact. The S&P 500 has delivered positive returns in 11 of the 12 Fed rate hike cycles since the 1950s, according to Truist co-chief investment officer Keith Lerner. - Why? Because the Fed tends to raise interest rates when the economy is growing, and a growing economy tends to be good news for corporate earnings.
Looking ahead… the question now becomes, "How many times will the Fed hike rates this year?" Goldman Sachs is predicting four, but Powell didn't rule out a hike at every one of the Fed's seven remaining meetings this year to tame inflation levels that he's said have gotten "just a bit worse." + For more reading on the Fed: We interviewed Christopher Leonard, the author of The Lords of Easy Money, a new book that argues the central bank has been a driving force of inequality over the past few decades.—NF | | Viacom Supreme Court Justice Stephen Breyer, 83, is reportedly planning to step down after 28 years of helping to make the country's biggest decisions. Liberals promptly RSVP'd to the retirement party and said they'd bring cake. Many progressives urged Justice Breyer to step down so that President Biden (a Democrat) could fill his spot with someone who's sympathetic to their causes. Right-leaning Supreme Court justices currently outnumber left-leaning ones by 6 to 3. Stephen who? Don't feel too bad if you've never heard of him: Only 2% of likely voters in a C-SPAN poll from 2018 could identify Breyer as a Supreme Court justice. He was appointed in 1994 by former President Bill Clinton and typically voted along moderate-to-liberal lines. Breyer has supported a number of civil rights cases, wrote the 2015 dissent that opposed the death penalty, and never uses footnotes in his opinions. Looking ahead… Biden has a big decision to make ahead of the court's next busy term that will begin in October, which includes cases on affirmative action, abortion, and gun rights. Progressives are already reminding him of his campaign promise to appoint a Black woman. Who will Biden choose? Some potential names include Judge Ketanji Brown Jackson of the US Court of Appeals for the District of Columbia Circuit, and California Supreme Court Justice Leondra Kruger.—MM | | Francis Scialabba In its earnings report yesterday, Tesla closed the books on a 2021 we can only describe as  . - It posted a record quarterly profit and its first back-to-back profitable years since it was founded in 2003. Tesla's $2.3 billion net profit last quarter jumped 760% from Q4 2020.
- Tesla also delivered a record number of vehicles last year despite ongoing supply chain bottlenecks—its "main limiting factor," the company said.
So what's on tap for 2022? New factories: Factories in Austin, TX, started pumping out Model Ys late last year, while its Berlin, Germany, doppelganger is waiting on final permits before revving up. Analysts say the two factories could double the company's overall production. But no new car models: Production of the Cybertruck and Roadster has been delayed until "hopefully" 2023. In regards to the low-cost EV people have been hyped for, Musk said, "We are not currently working on the $25,000 car." What's up? "We have enough on our plate right now." Zoom out: While Tesla isn't introducing any new models this year, other automakers are picking up the slack. Thirty new EV models will be introduced to the US market this year, more than two times the amount that's currently available.—JW and NF | | | Zero interest isn't really what you want to hear from the HR rep reviewing your resume, or the cutie sitting across the table from you on a blind date. But when you're paying down a hefty credit card balance? Zero interest for 21 months sounds prettyyy nice. It's real, and it's right here. When you move your existing balance to this credit card, you'll pay 0% interest on your transferred debt for 21 months. But that's not all: You'll also get a long intro 0% APR on card purchases. That means you can go into 2023 completely interest-free, whether you're chipping away at your balance or using the card to pay for new stuff. Something else that might pique your interest? This bad boy has no annual fee or late fees. Apply today. | | Matthew Baker/Getty Images Stat: Spotify said it removed more than 20,000 podcast episodes related to Covid-19 since the start of the pandemic, but Neil Young isn't satisfied. The music legend's catalog is officially being pulled from the platform after Young wrote a letter telling Spotify that if it didn't stop "spreading false information about vaccines" by providing a megaphone for the likes of Joe Rogan, he doesn't want to be part of it. Quote: "You're progressive in one way and you're still making that f***ing backward story about seven dwarfs living in a cave together…" The actor Peter Dinklage, best known for his role as Tyrion Lannister in Game of Thrones, bashed Disney for its upcoming live-action remake of Snow White and the Seven Dwarfs on Marc Maron's podcast. Disney responded that in order to "avoid reinforcing stereotypes from the original animated film," it's taking a "different approach" with those seven characters and has been consulting with the dwarfism community. Watch: The resources you need to achieve your 2022 goals. (Morning Brew) | | That's not a typo. Akili Interactive, the maker of prescription video games, announced plans to go public by merging with a SPAC run by billionaire investor Chamath Palihapitiya. It values Akili at $1 billion. Akili's video game, EndeavorRx, became the first video game to be approved as a medical treatment when it was greenlit by the FDA to treat ADHD in 2020. The game hasn't been commercialized yet, but more than 1,000 doctors have already prescribed it. Next up, the company is working on tech to treat autism spectrum disorder, depression, multiple sclerosis, and other cognitive issues. - While the FDA hasn't approved any other video game as a medical device, it has rubber-stamped two virtual reality-based therapeutics that treat conditions like lazy eye and chronic pain, according to The Verge.
Zoom out: Chamath brings some baggage to Akili's SPAC party. On his podcast last week, he said that "nobody cares" about the Chinese government's genocide of its Uyghur minority, an issue that's top-of-mind for many with the Beijing Olympics starting next Friday. His Twitter announcement of the Akili deal is flooded with comments saying the news is "below my line"—a quote from the pod.—JW | | - Amy Schneider's epic run on Jeopardy! came to an end last night after racking up 40 wins (the second-longest streak in show history) and nearly $1.4 million in prize money.
- President Biden hosted top US executives at the White House to talk up the economic benefits of his stalled Build Back Better plan.
- UBS acquired the roboadvisor Wealthfront for $1.4 billion.
- Dwayne "The Rock" Johnson said he's doing a movie that will bring "one of the biggest, most badass games to the screen—one that I've played for years." The Sims?
| | It's time to get swole. Or lean. Or running-your-first-marathon ready. Future pairs you with your own coach who creates a fitness plan to help you hit your unique goal wherever you are, whenever you want. Connect one-on-one with your coach today.* The 411 on ESG investing: Erm, what's ESG? Simply put, ESG investing = a belief in a better world. Listen to Amy Domini, industry pioneer and founder of Domini Impact Investments, explain why shared values matter, then learn about the Domini Impact Equity Fund.* Want to level-up your daily life? Check out Sidekick, our twice-weekly newsletter that curates recipes, productivity hacks, and content recs to help you live smarter. Wordle variants: A bunch of Wordle clones have popped up, including the double Wordle Dordle, the difficult Absurdle, the NSFW Lewdle, the math-based Primel, and Luckle. Meet really cool people: The world's foremost expert on snowflakes and this guy who never stopped being a kid. *This is sponsored advertising content | | Brew mini: You only have two days left to brush up on your crossword skills before taking on the big one on Saturday. Play today's mini for practice. Three headlines and a lie Three of these news headlines are real and one is faker than someone who says they "love snow." Can you guess the odd one out? - A veteran won a $4 million lottery prize using the numbers from a fortune cookie
- The secret to a good night's sleep? Hot dog lunches
- Bradley Cooper, Benedict Cumberbatch, and the golden age of nude men
- New Mexico governor just signed on as a substitute teacher amid steep staff shortages
| | | We made up the hot dog one. | | | ✤ A Note From Domini Impact Investments The Domini Funds are not insured, are subject to certain risks, and are available only to US investors by prospectus offer. Please review full legal disclosure here. You may lose money. DSIL Investment Services LLC (DSILD) distributor, Member FINRA. | | | Written by Neal Freyman, Matty Merritt, and Jamie Wilde Was this email forwarded to you? Sign up here. WANT MORE BREW? Industry news, with a sense of humor → - Marketing Brew: the buzziest happenings in marketing and advertising
- Retail Brew: retail trends from DTC to "buy now, pay later"
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