PHARMACEUTICALS

Botox and Cosmetic Surgeries Are Becoming The Norm In a Digital AI Picture-Perfect World

Growing older is part of life, but looking older? Well, that’s quickly becoming a thing of the past. In the early days of social media, nose-shrinking and lip-enlarging filters were more fun than deception. But now, according to the founder of IT Cosmetics, a whopping 91% of women and girls don’t like their bodies — and this societal pressure to attain an idealized standard of beauty has driven many towards real-life cosmetic enhancements in an attempt to make those flawless, filter-like faces the new norm.

The era of “Tweakments”: Thanks to social media and remote work, anti-aging cosmetic procedures like Botox and lip fillers have seen a huge surge in popularity, especially among the younger crowd. Even “buy now, pay later” company Affirm ($AFRM) recently started offering loans for cosmetic procedures. With weight loss drugs on the rise, artificial intelligence (AI) making image manipulation easier than ever, and a growing acceptance of these procedures, it appears that cosmetic enhancements are set for even more growth ahead.

• From 2019 to 2022, the number of US cosmetic procedures shot up by 18%, with Botox injections seeing a 73% increase.

• In 2022, 75% of facial plastic surgeons reported seeing more clients under 30 seeking forehead Botox and lip fillers.

Botox boom has “Ozempic face” to thank

When people undergo rapid weight loss with drugs like Ozempic, they often experience sagging skin that prematurely ages their appearance, colloquially referred to as “Ozempic face.” To counteract this effect, more and more folks are turning to Botox and fillers to restore that youthful fullness to their faces — helping AbbVie ($ABBV) turn its massive facelift business into a real money-maker.

• Although this trend hasn't significantly impacted AbbVie’s revenue yet, Carrie Strom, a representative from the biopharmaceutical company, views the expanding use of aesthetic treatments by individuals using weight-loss drugs as a “long-term tailwind” for the company.

• But AbbVie isn’t the only player in the game: While they hold a hefty 68% market share, newer competitors like Revance Therapeutics ($RVNC) and Evolus ($EOLS) are quickly catching up with their own anti-wrinkle injections.

Botox battle: In a lawsuit filed back in 2021, AbbVie accused Revance of swiping their confidential data — claiming that “it would be very challenging (if not impossible) to produce a biosimilar imitating Botox.” This legal battle has been looming over Revance’s stock, which has taken a nosedive of nearly 90% since 2021. But despite the legal drama, Revance’s Daxxify market share grew to 3.7% in the first quarter from 3% in the previous quarter, and their aesthetic units sold shot up by 105% year-over-year. It’s no wonder AbbVie is pulling out all the stops.

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LARGECAP RECAP

🌎 Biden sends a message to China with 100% tariffs on EVs

Yesterday, Biden made a move that many were expecting: he announced a series of tariffs on $18B worth of Chinese goods, including a 100% tariff on Chinese electric vehicles (EVs). The Alliance for American Manufacturing had described the influx of heavily subsidized Chinese EVs into the US market as an “extinction-level event for the US auto industry.”

• These tariffs don’t stop at EVs. Tariffs on solar cells and semiconductors will double from 25% to 50%, while certain steel and aluminum products will rise to 25% — on top of lithium batteries, medical supplies, and other goods, set to go into effect between 2024 and 2026.

• Biden’s economic advisor, Lael Brainard, stated that these measures are aimed at preventing the US from being “undercut by a flood of unfairly underpriced exports from China.”

Message sent: While the increase in EV tariffs may seem more symbolic, as Chinese EV makers have already been locked out of the US market due to tariffs first imposed in 2019 by former President Donald Trump, there still could be secondary impacts on consumers via inflation and broader global repercussions. According to Wolfe Research, the new tariffs could pave the way for the EU to implement similar measures — and the White House anticipates that “Europe, Turkey, Brazil, India, many other countries” may follow suit.

Read: The shift of manufacturing from China to Mexico is sending the Mexican Peso soaring

The growing influence of BRICs risks disrupting the status quo: Imagine a world where half of global transactions occur in the currencies of BRICS nations, led by Russia and China. The consequences could be dire for the US: a weakened dollar, soaring costs of imports, and a fragile economy. Request your FREE Wealth Protection Kit and learn how to BRICS-proof your savings →*

Markets & Economy

Qatar’s tourism economy is booming: Tourism made a 31% contribution to the country’s GDP last year, accounting for over 10% of its total economic output. This mirrors a broader trend of growing tourism in the Middle East, up 25% in 2023. [Read]

Investor optimism prevails as the second half of the year approaches: It’s not just about monster earnings — 82% of investors expect rate cuts in the latter half of 2024, while 78% believe a recession is unlikely over the next year. Still, most anticipate a slowdown in growth. [Read]

Could nonbank mortgage companies cause a recession? Here’s something to keep you up at night: a cascading crisis where home prices fall, mortgage companies fail, borrowers get shafted, and the government has to step in. Treasury Secretary Janet Yellen suggests implementing an industry-wide safety net to avert such a crisis. [Read]

Business & Wealth

Red Lobster closes 48 restaurants abruptly: Poor management decisions, including a disastrous “permanent” all-you-can-eat shrimp promotion, have pushed the seafood chain to the brink of bankruptcy. [Read]

Home Depot ($HD) earnings reveal cautious consumer behavior: Revenue fell 2.3% last quarter compared to a year ago, missing expectations (though earnings narrowly beat). With less foot traffic and decreased spending when customers do show up, consumers are pulling back on big discretionary spending. [Read]

Small business owners (finally) see a glimmer of hope: For the first time this year, small business owner sentiment ticked up, with fewer owners expecting price hikes. Still, sentiment remains far below average, and ongoing cost pressures continue to take a toll. [Read]

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DIGIT OF THE DAY

Rent Prices Cooling Down as Rental Home Construction Surges 39% in 2023

Rent prices are living rent-free in the heads of millions of Americans, but relief is on the way. According to John Burns Research and Consulting, a record-breaking 93K new rental homes were built last year, with another 99K in the pipeline for this year (WSJ). While the growth in rent prices for single-family homes has slowed from a peak of 13.4% in 2022, they still went up by 5% in Mar. 2024 compared to the previous year, as reported by Zillow. This persistent uptick in rent prices is seen as one of the reasons why inflation remains stubbornly above 3%. However, the surge in new rental properties is a positive development for many, although it might not be welcomed by everyone.

• In fact, the increase in rent prices for single-family homes could follow the path of the multi-family sector, where rent growth has slowed faster — having risen just 2.7% in March as a flood of new supply hit the market (FC).

• The slowdown is particularly noticeable in areas like Phoenix and Texas, where construction boomed during the pandemic to accommodate an influx of residents — so much so that Texas is now fighting an oversupply of apartments.

Forward-looking: An exec of asset manager Heitman predicts more “older millennials and retirees to rent as median home prices have grown at twice the pace of median incomes since 2000” (WSJ). This trend has continued to benefit US homebuilders like PulteGroup ($PHM) and Lennar ($LEN), whose stocks have climbed over 10% this year, adding to their impressive gains of more than 200% in the past five years.