There’s never a dull moment when it comes to crypto—the industry has even managed to make the Securities and Exchange Commission’s usually humdrum, bureaucratic exchange traded fund (ETF) approval process into what feels like an edge-of-your-seat historic event.

And this week, there’s been a last-minute plot twist. Analysts who have been closely watching the agency evaluate a slew of applications to launch an ETF that tracks ethereum, the second largest cryptocurrency behind bitcoin, just became way more optimistic that the SEC will approve the investment vehicles. Bloomberg analysts shifted their odds of approval from 25% to 75% on Monday.

The price of ethereum shot up 22% Monday on the news, boosting bitcoin along with it. Ethereum has gained 106% in the past 12 months as crypto’s winter has thawed, while bitcoin is up 159% over the past year.

Eric Balchunas, Senior ETF analyst at Bloomberg Intelligence, explained to Brew Markets that their team changed their odds after hearing the SEC was communicating with exchanges about launching the funds. “This is the 11th hour, you can’t get any more late in the game than this,” Balchunas said of the reversal. “This feels like a 180.”

For those of our readers emotionally healthy enough to stay far away from the world of crypto Twitter, let us explain: In January, the SEC approved the first “spot” bitcoin ETFs—10 (now 11) ETFs that are backed by actual bitcoin as opposed to bitcoin futures. The agency greenlit these a decade after the Winklevoss twins (yes, those Winklevoss twins) filed for the first in 2013.

Now, many of the same firms that have spot bitcoin ETFs, including Cathie Wood’s ARK, Grayscale, Fidelity, and BlackRock, are looking to roll out spot ethereum funds. It’s obvious why—these spot crypto ETFs are cash cows. The bitcoin funds collectively brought in nearly $2 billion in the first three days of trading, and now have over $55 billion in assets total.

Yet up until this week, the consensus among most analysts and even issuers themselves was that the proposed ethereum funds were likely going to be denied on May 23, which is the deadline for the SEC to make a decision. Because the SEC wasn’t meeting with issuers and fleshing out the details the way the agency was prior to bitcoin’s approval, the situation looked pessimistic for eager crypto investors.

Balchunas chalked up the game-time reversal to politics. “This is an election issue now,” he said. Presidential candidate Donald Trump recently voiced his support for cryptocurrency. “The Democrats don’t want to be seen as anti-crypto,” Balchunas said.

If the vehicles are approved, it is a legitimizing event for ethereum. “If you’re in a band, ETFs are like getting your music on Spotify and iTunes—ETFs are the digital format of the investing world,” Balchunas said. “So this would be major [for ether].”

Nobody knows for sure what the agency will really do. All eyes—and wallets—will be focusing on the Thursday deadline.—LB

🟢 What’s up:

• Bloom Energy shares rose 17.01% today thanks to an analyst upgrade from Wells Fargo, which now has a price target of $14.00.
• First Solar also enjoyed a bump from analyst upgrades, with both UBS and Piper Sandler raising their targets, pushing shares up 8.03%.
• Microsoft shares hit record highs today on a wave of AI optimism, while Eli Lilly closed at a new all-time high thanks to strong clinical trial data for a treatment for Crohn’s disease.

What’s down:

• Vinfast Auto, a Vietnamese car manufacturer, is down 18.67% today after the National Highway Safety Administration opened an investigation into a fatal April accident.
• Peloton dropped 16.37% today after management announced a refinancing plan to deal with debt.
• Trump Media shares shed 8.66% after the company announced a loss of $327.6 million in the first quarter—though shares are still up over 150% year-to-date.

Spring may bring May flowers and thaw our sad winter spirits. But in the world of finance, May also means one thing: Earnings season results are starting to paint a fuller picture of corporate America’s mindset.

An analysis from Goldman Sachs outlined the three themes that executives highlighted during earnings calls this quarter: AI (surprise, surprise), consumer demand health (another shocker), and corporate expense management (riveting).

According to the Goldman Sachs report published last week, 41% of of S&P 500 companies mentioned AI in their earnings, up from 23% last year.

While tech companies are obviously the most likely to be talking about AI (in fact, we all wish they could talk about something else for once), energy companies have also been bringing the theme into the spotlight. About 70% of S&P 500 energy companies have mentioned AI on earnings calls, versus 19% last quarter.

“Our results in the first quarter reflect strong performance from Search, YouTube and Cloud,” Alphabet CEO Sundar Pichai said in the company’s April earnings announcement. We are well under way with our Gemini era and there’s great momentum across the company. Our leadership in AI research and infrastructure, and our global product footprint, position us well for the next wave of AI innovation."

In a world of persistent inflation and continued weakening of consumer spending, the consumer was a big topic during earnings calls. While employment and spending data has been a positive bellwether, consumer confidence readings have remained relatively low compared to pre-pandemic levels. Retailers that specialize in value have enjoyed a boom, with Walmart reporting revenue and earnings growth that beat forecasts. Other firms are taking note: 20% of S&P 500 consumer-facing companies spoke about “affordability” during quarterly earnings calls.

“These are not inflation-driven results,” said Walmart CEO Doug McMillon of the company beating revenue forecasts.

A key part of delivering better-than-expected earnings is financial responsibility. In a high interest rate environment with sticky inflation, corporate America buckled down to “protect their margins and bolster profitability,” according to Goldman Sachs. Apparently, their efforts aren’t in vain—Goldman Sachs analysts noted that company cash balances are near record highs, which could help them afford more research and development spending, or return cash to shareholders via dividends and buybacks.—LB

• A breakdown of the highest-paid CEOs reveals that the median pay for chief executives rose from $14.5 million in 2022 to $15.7 million last year.
• Speaking of the fabulously wealthy, Treasury Secretary Janet Yellen says a plan to tax billionaires around the world at least 2% of their wealth every year is a non-starter.
• Sales and profits at luxury retailer Chanel popped double digits this quarter, illustrating that while the everyman may be struggling, demand for high-end goods remains strong.
• FDIC Chairman Martin Gruenberg will resign after the recent revelation that the agency’s workplace culture is rife with sexual harassment and discrimination.
• The Roundhill GLP-1 & Weight Loss ETF started trading today as the market for weight-loss investments continues to grow even as users’ waistlines shrink.
• Presidential candidate and noted brain worm enthusiast Robert F. Kennedy took to Twitter to express his support for retail investors via meme. It’s…really something.

Everyone wants good food at a reasonable price, but these days it’s difficult to have your cake and eat it, too.

Unless, of course, you’re a fast-casual restaurant. Once thought of as a healthier yet more expensive alternative to fast food, fast casual is flipping the script. Inflation has forced once-cheap eateries like McDonald’s to raise prices, while pressure from major markets like California, which recently raised the minimum wage, have sent prices skyward.

But for restaurants like Chipotle, Cava, and Sweetgreen, shifts in consumer preferences have been a boon that these outlets are capitalizing on. According to data collected by Bloomberg, over the last four years the number of fast-casual restaurants has grown twice as fast as the number of fast-food restaurants.

And it’s not like these eateries aren’t raising prices just like their fast-food counterparts—it’s simply that they don’t appear to be selling lunches at such a premium anymore. Suddenly, the price difference between fast food and fast casual is small enough that customers are choosing the healthier option, spurring big gains for fast-casual stocks.

• Shares of Cava, which reports earnings next week, have risen over 96% in 2024.
• Sweetgreen is up 96% year to date.
• Chipotle has jumped almost 42% in 2024.

Analysts are broadly bullish on these three stocks, but those share price gains are raising eyebrows, and don’t leave a lot of room for more growth—if any at all.

Of the three, Chipotle has the most wiggle room and some of the best fundamentals. The company reported a 14% increase in revenue last quarter, while same store sales rose 7%, and management expects the growth to continue as it rolls out new initiatives like drive-thru Chipotlanes. Analysts are unanimously bullish, with their average price target coming in at $3,243.46, according to TipRanks—though that’s just 1.74% above today’s price.

The average analyst price target for Cava, however, is $65.73—18.32% lower than today’s price. As for surging Sweetgreen, keep in mind that the company has yet to post a profit as a public company, and EPS missed expectations last quarter. Analysts have an average price target of $27.50 for the stock, nearly 15% lower than where it stands today.—MR

Federal Open Market Committee (FOMC) minutes are on the docket for tomorrow, and while they usually move markets, after the last CPI report the minutes from the April meeting are a bit stale at this point. One thing investors will be parsing through comments for: any Fed members wondering aloud about hiking rates instead of cutting them.

On the earnings front, all eyes are on Nvidia after the market closes. Not only will the company’s earnings dictate the direction of the all-important AI trade, but Nvidia also accounts for roughly 5% of the S&P 500’s total market value—so where it goes, the market will follow.

Before the open:

• Analog Devices: The semiconductor manufacturer is competing with the best of the best, but a rising tide could lift all boats as companies desperate to power AI upgrades throw money at Analog Devices and its peers. Consensus: $1.26 EPS, $2.1 billion in revenue
• Target: Customers tightening their purse strings means Target may need to refocus on selling lower-priced items, which won’t help the company’s bottom line. Same store sales have declined three quarters in a row, and analysts expect more pain ahead. Consensus: $2.02 EPS, $24.51 billion in revenue

After the close:

• Nvidia: Wall Street is optimistic Nvidia can beat its already lofty expectations, but sky-high valuations are a different story entirely. Shares are up 20% in the last month alone, and investors have to wonder how much further the stock can feasibly rise. Consensus: $5.18 EPS, $22.86 billion in revenue
• Snowflake: Shareholders will be eager to hear from new CEO Sridhar Ramaswamy and his plans to lead the cloud computing company as data becomes a hot topic in an AI-focused market. Consensus: $0.18 EPS, $785.86 billion in revenue

You’ve seen them on store shelves in passing, shuddered in horror, and pushed your cart out of the aisle as fast as you could—Sour Patch Kid Oreos, gravy-flavored soda, mustard-flavored Skittles, a smorgasbord of mashups seemingly designed to repulse yet entice with their “I dare you to try it” attitude.

The weird, wacky, borderline-disgusting combinations of flavors your favorite snack companies keep trying out seem almost nonsensical, just corporations throwing spearmint-flavored spaghetti at the wall in the hopes that something sticks. But these Frankenstein concoctions serve a purpose: They get customers talking, raise brand awareness, encourage you to buy a pack of the original flavored product as a palate cleanser, and on occasion strike gold with a combination that works.

In a world of budget-conscious customers trying to fend off inflation in the grocery store aisle, every advantage counts for snack-food companies competing for shelf space. So let’s help them out and think up the next big hit.

Submit the best (read: worst) combination of snack food flavorings you can think of. Top concoctions will be featured in tomorrow's edition, and the creator of a combination that makes us retch out loud will get some sweet Morning Brew swag.

Go ahead, just try and disgust us.