President Donald Trump and first lady Melania Trump step off Air Force One at Palm Beach International Airport, Wednesday, Dec. 23, 2020, in Palm Beach, Fla. Trump is visiting his Mar-a-Lago resort. (AP Photo/Patrick Semansky)
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.
STIMULUS WHIPSAW
The S&P 500 ended down for the week with the Dow and Nasdaq slightly higher as the Street wrapped up early Thursday for the Christmas holiday. A stimulus package from Congress looked like it was going to emerge as a gift early in the week, but the president threw that plan into turmoil Wednesday when he demanded payments to Americans be jacked up from $600 to $2,000, a plan GOP House members officially derided Thursday. Still, the need for major economic relief became even more apparent in the data this week. Another 800,000 Americans joined the ranks of the unemployed last week. If the stimulus bill is not signed into law soon, federal unemployment benefits expire in a week, leaving millions of people without any income. Consumer spending dropped in November for the first time since the pandemic started, consumer confidence is at a four-month low, and even the resilient housing market is faltering with sales of new single-family homes dropping sharply in November.
SHIPAGEDDON
The U.S. Postal Service is buckling under the weight of an absolute deluge of mail and package volume that is causing widespread delivery delays across the country. On-time performance was 86 percent last week, and perhaps even lower now. Foot traffic at retail stores was down 40 percent last weekend compared to last year. Everyone is doing their shopping online, and it has created a logjam that is cresting at the worst possible time. FedEx and UPS have instituted limits on their networks, leaving the USPS as the shipper of last resort. Best Buy is even experimenting with sending its own employees out to deliver items. As one meme going around puts it: "Stop trying to track that package. It's in God's hands now."
APPLE V. TESLA
Apple is reportedly jump-starting its plans to build a self-driving car from scratch. The iPhone maker is said to be targeting 2024 for the launch of an autonomous vehicle that will include a supposed breakthrough in battery technology. Apple's self-driving car strategy, codenamed Project Titan, has gone through fits and starts over the past several years, but the company is reinvigorating the project thanks to a "radical" new battery design. If those plans materialize, Apple would be going head-to-head with Tesla. CEO Elon Musk said this week that he had offered to sell Tesla to Apple three years ago as the company was faltering with the Model 3, but Apple boss Tim Cook "refused to take the meeting." Tesla shares closed the week down slightly after its first week as a member of the S&P 500.
FITNESS MERGER
Peloton closed at another all-time high this week after the fitness bike maker announced it was buying Precor, the commercial fitness equipment manufacturer, for $420 million. The deal gives Peloton access to 625,000 square feet of new manufacturing space in the U.S. that it desperately needs to keep up with the demand for its at-home products. Peloton will end 2020 as one of the top "stay-at-home" stocks of the pandemic, up an astonishing 470 percent on the year.
WALMART OPIOID LAWSUIT
Walmart will have to answer for its purported role in the opioid epidemic that has ravaged the U.S. The Justice Department filed suit against the superstore this week alleging that its pharmacies filled thousands of suspicious prescriptions that it "knew were invalid." Walmart already began fighting back, saying the DOJ's investigation has been "tainted by historical ethics violations." Walmart's stock dipped after the suit was announced.
Disney reported earnings beat on both top and bottom lines. Earnings per share came in at $1.06 versus Refinitiv estimates of 63 cents. Revenue also exceeded expectations at $21.82 billion dollars versus $20.91 billion expected. Meanwhile, Disney+ added 11.8 million new subscribers this quarter to reach nearly 130 million total. Tuna Amobi, media and entertainment expert at CFRA research, joined Cheddar to gives his take on Disney's earnings blowout.
Almost a decade after facing a parent's worst nightmare, the families of the young students killed in the Sandy Hook School shooting reached a settlement with gun manufacturer Remington, makers of the Bushmaster AR-15 used in the crime. David Pucino, deputy chief counsel, Giffords Law Center to Prevent Gun Violence joined Cheddar News to discuss the families' case and how its strategy brought about the legal settlement. "They built a really great case showing the way that Bushmaster developed its advertising to drive sales using those toxic messages.
Private equity firms are taking a big interest in investing in NBA teams, the sports league showing the highest ROI over the last two decades according to Sportico, Forbes, and PitchBook. Wylie Fernyhough, lead analys for private equity at PitchBook joined Cheddar News to discuss the way firms are looking to get a piece of the action on the court. “There’s a certain amount of rarity, with these," Fernyhough said. "They’re not exactly printing new NBA franchises."
In efforts to help support black-owned brands. Ulta Beauty says it will make a commitment to not only give these brand shelf space but also help them navigate the ins and outs of growing a business. Last week, the beauty retailer announced in order to reach those goals, the company will spend $50 million on diversity and inclusion programs, including an accelerated program to mentor entrepreneurs of color. CEO of Ulta Beauty, Dave Kimbell, joined Cheddar to discuss more.
Inflation remains hot as the January PPI has increased by 1 percent, twice what analysts had been expecting with a jump of 9.7 over the year. Beth Ann Bovino, the U.S. chief economist, for S&P Global Ratings, joined Cheddar News to discuss the rapid pace of inflation alongside higher wages, predicting the Federal Reserve will act quickly and forcefully this year. "They haven't changed their forecast, yet, that's gonna come out soon. But we expect that a March rate hike is basically pretty much baked in the cake," she said. "We think six rate hikes in total for 2022."
For black history month, Cheddar is highlighting black business leaders who are driving the need for representation forward. On February 10, the U.S. Chamber of Commerce hosted an event called 'Developing the Black-Owned Business Ecosystem.' The virtual event was organized under the lobbying group's two initiatives -- the Equality of Opportunity Initiative, and the Coalition to Back Black Businesses. The event highlighted the developments needed to develop more black-owned businesses in the U.S. Dr. Anthony Wilbon, Dean of the School of Business at Howard University, joined Cheddar News' Closing Bell to discuss his experience as a speaker at the event.
Black spending power reached a record $1.6 Trillion in a 2021 report from the University of Georgia Selig Center for Economic Growth. Ayesha Selden, certified financial planner, breaks down why real estate is the key to closing the racial wealth gap and how Black Americans are using social media to improve financial literacy. "If we look at home ownership as being a primary driver of wealth, when you look at the equity that Americans have in their homes, that equity can be used to buy additional assets like other rental properties. That equity can be used to educate our children," Selden said, noting that lower rates of home ownership meant Black Americans tend to incur more debt on average for their student loans.
A new survey from Etoro suggests that talking crypto might actually help Americans on the dating scene find love...or at least land another date. The survey found that 74% of respondents would be more interested in going on a second date with a person that pays the bill in Bitcoin. Callie Cox, Etoro's U.S. investment analyst, joined Cheddar News to discuss.
