__Slow jog…__ On Wednesday __Adidas__ is set to release its first earnings report of the post-Yeezy era. Last year the German shoemaker [discontinued](https://snacks.robinhood.com/newsletters/419JPU4iKFubhqsgTFUD7I/articles/e8sgVKCwr2g0Q13CQXp4h/) its profitable sneaker collab with Kanye West (think: nearly 10% of annual sales) after the singer made antisemitic remarks, among other offensive statements. Now Adidas says it may face an operating loss of nearly $750M and warned investors it could lose $1.2B+ in sales this year. Last month its new CEO said the company would focus on returning to growth with new products in the pipeline. 

__Cream of mushrooming sales…__ 150-year-old soup slinger __Campbell Soup__ has been on a roll. The humble soup can has made a comeback (even among millennials) after the pandemic drove Americans to stock up on affordable pantry staples. But there was more to Campbell's moneymaking sauce: repeated price hikes. Yet that strategy is starting to go stale as competitors like __Kraft Heinz__ [ease](https://snacks.robinhood.com/newsletters/3CiAS3Tg8B7Jkh3PjorITN/articles/34CHabCH0DkpJGYn3NgpaB/) off. When Campbell last reported, it turned heads with 15% sales growth. We'll see whether the chicken noodle is still hot when Campbell reports Wednesday.

Events

Jennifer Cardenas

Coming up this week

__The name’s Bond…__ T-Bond. Uncle Sam’s payouts on IOUs are getting fatter: last week the 10-year Treasury yield (basically: the interest rate the US government pays to borrow money)
briefly topped 4% for the first time since November. While Treasury yields may sound as enthralling as waiting in line at the DMV, they’re key to understanding stock-market moves. 

- __Spill the T-bill:__ When investors expect rates to go higher, the price of existing bonds falls. If people can get a new bond with a higher interest rate, why would they pay the same price for an old version of the same bond that pays out at a *lower* rate?
- __US yields soared and stocks fell__ early last week as investors came to terms with the possibility of Fed rate hikes lasting longer (and going higher) than previously expected. 
- __But stocks rebounded__ after Atlanta Fed President Bostic said he “firmly” supports sticking with quarter-point hikes. And surprise, surprise: the 10-year yield dipped. 

__Define the relationship…__ As interest rate (or inflation) expectations rise, yields rise and bonds fall. Historically, rising Treasury yields tend to lead to falling stocks, because they make Treasury securities more attractive when compared to riskier assets (like… stocks). The US gov’t has historically always paid its debt on time, so Treasury securities are considered “safe” investments. Now that the 10-year yield is hovering around 4%, it could be a tipping point for some investors to offload some stocks and buy more bonds. 

Watching the yield rise like (Scott Olson/Getty Images)

Bonded

__It’s all about opportunity cost…__ AKA: what you stand to potentially lose by choosing one option over another. When Treasury yields are low or near zero, there’s little incentive to invest in bonds over stocks. But as potential returns from low-risk investments (like US gov’t bonds) rise, investors demand higher returns from stocks to justify the changed opportunity cost. As yields climbed last month, the S&P 500 lost 2.6%.

What the 10-year Treasury yield’s 4% milestone means for markets and investors

__Graduating with a PhDebt…__ The Supreme Court [heard](https://snacks.robinhood.com/newsletters/6wxiLf0iRxZlUulU1qvIH6/articles/1ud0PSigxerdef2ZRZVAUA/) arguments last week over the legality of President Biden's student loan forgiveness plan. His effort to scrap up to $20K in debt for qualified borrowers was put on hold last year after six GOP-led states challenged it in court. 43M Americans have federal student loans, and the average payment is nearly $400/month. SCOTUS’s decision is expected by late June. Payments have been on pause since March 2020, but are set to restart this year — and many Americans might not be financially prepared. 

__New club on the block…__ The biz behind the Bored Ape Yacht Club said it would launch a 300-piece NFT collection, dubbed TwelveFold, on the __bitcoin__ blockchain yesterday — marking a significant departure for a company that's been all in on __ethereum__. The __Yuga Labs__ project could further divide a crypto community already battling it out over NFTs on bitcoin. Critics argued that bitcoin NFTs (aka: [ordinals](https://snacks.robinhood.com/newsletters/hVxJ5P0UXNj7GiarHRYHR/articles/6h6QfaEiiWIYYTVHHiqAf/)) would drive up transaction fees, while enthusiasts said they'd bring miners revenue. Yuga Labs’ push into ordinals suggests bitcoin NFTs could be here to stay. 

Zoom out

Stories we’re watching

- __[CardiBeef](https://snacks.robinhood.com/newsletters/13SB4TYZ5gIuhmdpvpu4SO/articles/31yaUlHum6NJQLFOrVoH4f/):__ __McDonald’s__ franchise owners have beef with a new meal inspired by rappers Cardi B and Offset. While celeb meals have been a big sales driver, franchisees say the rappers’ R-rated lyrics could hurt the family-friendly brand. 
- __[Sliver](https://snacks.robinhood.com/newsletters/1N6EVPNiFMVnsRFMeZq1Si/articles/7mcLpvg5uE1w1Dg08UBtdR/):__ __Silvergate__ shares plunged 60% last week after the crypto mega bank suggested it might not survive. Silvergate was the go-to bank for crypto companies, and its potential demise could leave many in a banking bind. 
- __[Avo](https://snacks.robinhood.com/newsletters/1N6EVPNiFMVnsRFMeZq1Si/articles/3RAIAmf4X1YSqfPoKPuUE3/):__ __Instacart’s__ profits reportedly boomed ahead of its anticipated IPO this year. But America’s grocery-delivery leader doesn’t just owe its growth to avocados: its ads business is apparently ripe.

ICYMI

Last week's highlights

The 10-year Treasury yield topped 4%, which could tip the scales for some investors

Dow Jones

S&P 500

Nasdaq

Bitcoin

Lots of zippers say “YKK” because one Japanese company — Yoshida Kogyo Kabushikikaisha — produces about half the world’s zippers