Thematic Reading - April 25, 2022
The latest thematic tailwinds and headwinds in the news
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Thanks for being a subscriber to Thematic Signals+. Here are some of the things we’ve been reading lately pertaining to our investment themes as well as related indices and models. Enjoy!
-Team Tematica
Cleaner Living
Growing demand for items that claim to be better for you and the planet:
Last week we shared some findings for increasing shelf space at Kroger for Cleaner Living products, and this week we have something similar from Wegmans. What’s interesting is that Wegmans is offering its own Cleaner Living products, not that private label products are new but usually, they tend to emerge when a market segment is maturing. In this case, we suspect Wegmans is looking to capitalize on the powerful pivot in consumer spending as folks look for products that meet the mandate of our Cleaner Living investment theme.
Consumer Inflation Fighters
Companies poised to benefit as consumers stretch the disposable spending dollars they do have:
“What’s happening with the streaming services is the canary in the coal mine,” he said. “Inflation puts pressure on the consumer, you think about which is your least valued purchase, and you then find out which businesses are really going to struggle in that inflationary environment.” Inflation has gathered pace just as consumers were resuming aspects of their pre-pandemic lives — eating out, working from the office, and booking vacations. It also comes after Covid-19 restrictions pushed up savings rates: Americans had built up an extra $4.2tn of cash by the end of 2021, according to the Federal Reserve.”
Great cancellation spreads beyond Netflix
“The King's College business and economics professor Brian Brenberg warned Americans are starting to feel their "disposable income squeezed" as inflation continues to surge nationwide… Americans would have to earn 7% more compared to last year to sustain their standard of living, according to a survey posted by the Cleveland Fed.”
Inflation causing disposable income squeeze, economics professor Brian Brenberg warns
“Industry data show that Americans are spending more on food than before the pandemic. And in a sign of the times, that is driving up food prices amid the sharpest bout of inflation in the U.S in 40 years. Customer demand continues to outpace our ability to supply products," Tyson Foods CEO Donnie King told a quarterly earnings call in February. Tyson's average sales price for the quarter rose nearly 20% compared to a year ago, helping the meat company recoup higher costs including labor and transportation. Americans are paying 10% more for food they buy at the grocery store than a year ago, with beef prices rising 16%, federal data shows.”
Sorry shoppers, food prices are likely to keep rising. Here's why.
“Some shoppers are trying to save money by buying lower-cost store brands and opting for less expensive items. Supermarket executives said consumers are switching to private-label products for frozen food, cooking oil, and other items; some people are buying ground beef instead of steak or choosing chicken, which tends to be cheaper than beef. Executives and analysts said shoppers are increasingly responding to higher prices by seeking out discounts and comparing prices at multiple stores.”
Food Prices Keep Going Up. Here’s What It Means for You.
Cyber Security & Data Privacy
Securing individuals and organizations against cyber threats and privacy violations:
“WatchGuard Technologies last week announced findings from its most recent quarterly Internet Security Report, detailing the top malware trends and network security threats analyzed by WatchGuard Threat Lab researchers. Of note, researchers found a record number of evasive malware detections. Advanced threats increased by 33% indicating a higher level of zero-day threats than ever before. Network detections also continued an upward trajectory, with the Americas receiving the majority of attacks.”
Network Attacks at Highest Point Over Last Three Years, Says New Report
“Previously unknown “zero-day” software vulnerabilities are mysterious and intriguing as a concept. But they're even more noteworthy when hackers are spotted actively exploiting the novel software flaws in the wild before anyone else knows about them. As researchers have expanded their focus to detect and study more of this exploitation, they're seeing it more often. Two reports this week from the threat intelligence firm Mandiant and Google's bug-hunting team, Project Zero, aim to give insight into the question of exactly how much zero-day exploitation has grown in recent years.”
Hackers are exploiting 0-days more than ever
“Under the law, companies will be required to notify the Cybersecurity and Infrastructure Security Agency within 72 hours of discovering a hack. They must also alert the agency within 24 hours of paying ransom to attackers who hold their data hostage.”
With Eye to Russia, Biden Administration Asks Companies to Report Cyberattacks
“Nearly a week into a ransomware attack that has crippled Costa Rican government computer systems, the country refused to pay a ransom as it struggled to implement workarounds and braced itself as hackers began publishing stolen information… A number of its systems have been affected from tax collection to importation and exportation processes through the customs agency. Attacks on the social security agency’s human resources system and on the Labor Ministry, as well as others followed.”
Cyberattack Causes Chaos in Costa Rica Government Systems