The Week's Top Stories is a guided tour through the biggest market stories of the week, from winning stocks to brutal dips to the facts and forecasts generating buzz on Wall Street.
NETFLIX CRATERS
The streaming wars left a crater in Netflix's stock price Wednesday after the company reported a loss of 200,000 subscribers in the first quarter. Shares plunged 35 percent, wiping out $50 billion in value in a single day, and marking the streamer's worst day on Wall Street since 2004. While analysts were expecting subscriber growth to slow given increasingly fierce competition from the likes of Disney, Warner Bros. Discovery, and Paramount, the steep drop-off was a surprise and a signal that the streaming market may be bumping up against its limit. Netflix is also the second FANG stock (Facebook, Amazon, Netflix, Google) to endure a brutal sell-off this year. Meta dropped 26 percent back in February, lopping off $232 billion in value from its market cap. The other members of the tech giant-quartet, which has been a reliable investment for several years now, are set to release their earnings next week. So we'll know soon if the bearish contagion spreads.
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TESLA EARNINGS IMPRESS
Maybe Musk was just feeling himself after a Tesla earnings report knocked it out of the park this week. The company reported a record profit of $3.3 billion in the quarter, and Musk projected that the company would produce 1.5 million vehicles in 2022. That's a 60 percent jump from last year, despite signals in the report that supply chain issues were finally catching up with the EV maker and could curb production in the next quarter. The stock jumped around 3 percent on the news, and Tesla bulls rejoiced.
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WINNERS AND LOSERS
While Netflix plunged and Tesla popped, the rest of the stock market was a similarly mixed bag. Used-car retailer Carvana reported its first-ever quarterly sales decline, and the stock fell as much as 24 percent after-hours on Wednesday before leveling off. On the same day, United Airlines forecasted it would be turning a profit in 2022, sending shares up nearly 18 percent, as investors anticipated a resurgent airline industry this summer. Bank of America shares jumped on an earnings beat, and Charles Schwab shares fell after missing analyst estimates. Shares of Chinese ride-hailing giant Didi, meanwhile, sank on the news that it plans to delist from the New York Stock Exchange before finding another venue for its U.S. shares.
MORE FED RATE HIKES
When Federal Reserve Chair Jerome Powell speaks, markets listen, and this week the country's top banker hinted in recent months that sharp interest rate hikes are coming. He even signaled that a half-point increase was on the table, putting him in line with some of the more hawkish Fed governors who have been calling for faster, steeper hikes to rein in inflation.
RISE OF THE DOLLAR
One beneficiary of looming rate hikes is the U.S. dollar. The dollar index (DXY), which tracks the dollar's value against other major currencies, hit a two-year high this week. The U.S. dollar is up 12 percent from last year, and other currencies are sinking against it, with the Japanese yen, in particular, tumbling to a 20-year low.
