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.
After an intense hours-long meltdown Monday, stocks closed higher in a last minute, stunning comeback. At one point, the Dow shed over 1,000 points, the tech-heavy Nasdaq was down close to 5% and inching toward correction territory, and the S&P 500 briefly hit a correction earlier in the day. During most of Monday's session, stocks were on track to mark their worst months since March 2020, and for the Nasdaq, since October 2008. Philip Palumbo, Founder, CEO and Chief Investment Officer of Palumbo Wealth Management, joined Cheddar News' Closing Bell to discuss today's stunning market comeback, whether there's more room for stocks to fall, his 2022 market predictions, and more.
Bobby Zagotta, CEO of Bitstamp USA, joins Cheddar News' Closing Bell, where he discusses what he expects to see from Bitcoin and other cryptocurrencies amid a volatile period in the market, and explains how his crypto exchange is helping investors.
Markets started the week on a rocky note: the major indexes at most points during the day were double digits off of their highs, on the path to their worst performances since March 2020 and for the Nasdaq, since October 2008. Investors were skittish about the Federal Reserve's meeting this week, where the central bank is expected to announce more details about its plans to hike interest rates and taper asset purchasing this year. Art Hogan, Chief Market Strategist at National Securities, joined Cheddar News' Closing Bell to discuss today's market meltdown, why investors were feeling pressure, what to expect from the Fed, and more.
AT&T announced it's offering two tiers of high-speed internet, 2 gigs, and 5 gigs, to its fiber customers in more than 70 metro regions. AT&T Consumer CEO Thaddeus Arroyo joined Cheddar to talk about the newly available speed upgrades for 5.2 million of its customers, and where the rollout goes from here. "Over the course of 2022, we'll rapidly continue to retrofit the rest of the base," he said. "And importantly now is, as we build-out, we've talked about building out to cover 30 million homes and businesses by the end of 2025, we're going to continue to ensure that every new location that we stand up has this multi gig capability."
Autonomous driving tech company Waymo is partnering with transportation and logistics business J.B. Hunt. The two firms are teaming up to bring autonomous shipping to the highways. Head of commercialization for trucking at Waymo, Charlie Jatt, joined Cheddar to discuss how the companies are combining their strengths. "We, of course at Waymo, are working on the technology side of affairs, and J. B Hunt brings critical operational and commercial expertise," Jatt said. "And together we're going to work to deploy the first fully autonomous Class 8 truck hauling goods for one of their customers in the coming years in Texas."
Amid a rough week for Peloton's stock, as well as its image — its bikes being the cause of death for two fictional TV characters now — an activist investor is calling for a change in upper management. Chief investment officer of Blackwell, Jason Aintabi, petitioned in a letter that Peloton’s CEO, John Foley, must be fired. Joining Cheddar to discuss the ultimatum, Hatem Dhiab, a portfolio manager and managing partner at Gerber Kawasaki Wealth and Investment Management noted the conditions leading to the demand for Foley's removal. "The stock is basically 85 percent below the high," he said. "I think there is some change that needs to happen, and that's just the reality."
Talent Resources Sports is partnering with ABG Entertainment to host Sports Illustrated The Party during the weekend of Super Bowl LVI, featuring musical performances by Kygo, Jack Harlow, and other guests. David Spencer and Mike Heller, co-CEOs and founders of Talent Resources Sports, joined Cheddar to discuss the details behind putting on the event. “We’re just really pumped that after all of the things that got canceled people will finally have a place to let some steam off in such an exciting moment, such a charged moment with the Super Bowl,” Mike Heller said about putting on the live event after previous COVID-related cancellations.
