From Wall Street to Silicon Valley, these are the top stories that moved markets and had investors, business leaders, and entrepreneurs talking this week on Cheddar.
MARKET SHRUGS OFF INFLATION
Stocks rebounded from an early slump to close out the week, boosted by reopening optimism following the CDC’s sharp reversal on mask wearing for vaccinated Americans. Tech shares led the rebound, though the Nasdaq still closed the week lower by 1.04 percent. The Dow and S&P also ended with modest losses. The big economic data of the week was April's CPI, which came in much hotter than expected, leading to renewed concerns that the economic recovery is in danger of overheating. The consumer price index — a measure of a basket of goods, housing, and energy costs — jumped 4.2 percent year-over-year, a much higher than expected reading that comes during a time of shortages and price hikes on everything from grocery staples to computer chips. Inflation is accelerating at its fastest pace in 12 years as the American economic engine grinds into gear, though the data is a bit distorted because of how abnormally low it was this time last year at the height of the pandemic. The Fed has said it expects the rise in inflation to be temporary.
MUSK REVERSES COURSE
Fresh off his hosting stint on SNL, Elon Musk did an about-face on Bitcoin, tweeting that Tesla would stop accepting the cryptocurrency for purchases due to its environmental impact. The decision came just three months after he announced the digital coin as a new way to pay. Bitcoin had its worst week since February on that tweet, dropping as much as 15 percent before paring some of those losses. Other coins like Ether and Doge also slid, though Doge’s price went as high as 56 cents after Coinbase said it would initiate support for the token in the coming weeks. Tesla had a miserable week of its own, dinged by the impact of inflation on high-multiple stocks, Musk’s Bitcoin reversal, and surprisingly bad sales data out of China. While Tesla doesn’t break out monthly or regional sales, the China Passenger Car Association estimated that the company sold 27 percent fewer domestically-made vehicles in April than March, while Warren Buffett-backed BYD has been gaining steam.
AIRBNB HITS THE SKIDS
Airbnb reported its second earnings since going public, showing revenue grew 5 percent in Q1 to $887 million. The home-rental platform’s net loss widened to $1.2 billion. For comparison, competitors like Expedia and Booking Holdings reported double-digit revenue declines given the uneven state of global travel. Shares of Airbnb are down 40 percent from their highs in February, hurt by increased competition not just from more traditional booking platforms but also the likes of VRBO, which is particularly well positioned to take share from Airbnb when it comes to rural vacation rentals and has a more attractive fee structure for consumers.
NEW ERA FOR VICTORIA’S SECRET
L Brands has decided to spin off Victoria’s Secret and Bath & Body Works into two separate public companies after spending the last year deciding what to do with its two flagship properties, particularly its struggling lingerie chain. Victoria’s Secret was in the process of being acquired by Sycamore Partners in early 2020 before the pandemic sank the deal. Since then, the company got a new CEO and embarked on a turnaround that involved closing underperforming stores and deemphasizing its famously sexualized image for a more inclusive brand. So far, it seems to be working. VS sales reached $1.6 billion in Q1, compared to $894 million a year prior at the nadir of its troubles. Victoria’s Secret is expected to be valued between $5 billion and $7 billion after the spinoff to L Brands shareholders, according to the New York Times. As for Bath & Body Works, the chain famous for its home fragrance selection, saw net sales rise to $1.5 billion in Q1, up 60 percent in two years.
DISNEY MOMENTUM SLOWS
Disney shares took a drubbing after reporting an all-around disappointing quarter, ending the week down 6.49 percent. Disney+, the pandemic bright spot for the Mouse House, saw subscriber growth slow to 8.7 million for the quarter. That still brings Disney+ subs to 104 million in the year-and-a-half since it launched, not too shabby considering the company’s own original forecast was for 60 to 90 million subs by 2024. Still, for the Street, it’s all about momentum and it may be that Disney’s streaming growth just couldn’t sustain that pace forever.The theme park division reported its fourth straight loss — no surprise there, given many of those parks are just now opening back up.
Miami wants to be the crypto capital of the world. Mayor Francis Suarez has gone all in on the blockchain, even accepting one of his first paychecks in Bitcoin, hosting one of the world's largest digital cryptocurrency conferences, and marketing Miami as a great place for tech experts to work. Maja Vujinovic, managing director of OGroupLLC, joined Cheddar's Fast Forward to discuss Miami's enthusiasm toward crypto, some of the potential risks that entails, and where the city might be heading when it comes to the crypto takeover.
Like so many other cities, Miami experienced a tourism boom over the summer after vaccines were distributed. But, the Omicron variant has thrown the travel industry for a loop. David Whitaker, president and CEO of the Greater Miami Convention and Visitors Bureau, joined Cheddar to discuss the city as a tourist destination, and how it has handled headwinds from the pandemic.
Miami's real estate market has boomed since early 2020, thanks to an overall strong housing market, remote work, and no income tax as incentives. The city is preparing to welcome even more residents as people relocate to warmer climates to work from home. Garrett Derderian, director of market intelligence at SERHANT, joined Cheddar to discuss the Magic City's red hot market.
Rockstar Energy, a subsidiary of Pepsico, unveiled its new beverage brand, Rockstar Unplugged, changing up the energy drink formula with hemp seed oil as an ingredient. PepsiCo Energy CMO Fabiola Torres joined Cheddar News to talk about how the product promotes “good vibes” and allows consumers to unwind and discuss partnering with "MTV Unplugged" for a concert series. "We couldn't find a better partnership that MTV," she said. "MTV Unplugged has been such an iconic proposition … and we believe that we're the right partners because the insight of our proposition for Rockstar Unplugged comes from music.
Eight months after the National Football League announced $1 million in research into cannabinoids, the NFL-NFLPA Joint Pain Management Committee has awarded the funding to two teams of medical researchers at the University of California San Diego and the University of Regina. The NFL says the studies will investigate the effects of cannabinoids on pain management and neuroprotection from concussion in elite football players, respectively. Cheddar correspondent Chloe Ailello spoke with Jeff Miller, the executive vice president of communications, public affairs, and policy for the NFL, about the studies, as well as the recent lawsuit filed against the NFL by former Miami Dolphins head coach Brian Flores. "Maybe we can learn things from other alternative pain approaches that are going to benefit our player population and then sports medicine as a whole," Miller said.
All Hands celebrates Black History Month by highlighting achievements in inclusivity and paying homage to those who have fought for equal rights. Rep. Maxine Waters (D-CA) joins Cheddar News to discuss voter suppression; Damali Peterman, CEO of Breakthrough ADR, elaborates on the biggest barriers for Black professionals; Andre Perry, senior fellow of Brookings Institution, dives into student loans and the racial wealth divide; and lastly, BET CEO Scott Mills discusses the company's initiatives for 2022.
Hinge users who have children can opt-in to a $100 stipend up to $25,000 for childcare. Logan Ury, the director of relationship science for the online dating platform, noted the issue as an obstacle for single parents who want to go out on dates. "We have heard that singles with children have a hard time going on dates for one of the reasons being that it's just hard to find childcare and it's hard to be able to afford it," she said. Ury also said that the hot topic among Hinge's users is mental health and the prioritizing of mental health.
According to the Federal Reserve, the investment gap between Black and white Americans has remained substantial, with only 34 percent of Black households joining in on the historic rise in the markets. Stacey Tisdale, the first Black woman to have reported from the NYSE and the CEO and president of Mind Money Media Inc., said that the data might not be as disheartening as it seems. "I think that number is very deceiving. That Federal Reserve study is actually from 2019, and it's very important that we all look beneath that number and look beneath the surface because there is nothing short of an investing revolution going on in the Black community," Tisdale said.
