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.
RALLY FADES
Investors slammed the brakes on the broad stock market rally this week, as coronavirus outbreaks in the Western and Southern U.S. climbed, adding to the sense that the economic recovery will not be as quick or straightforward as many had hoped. Jobless claim data from the Department of Labor showed that the number of people filing for unemployment has held steady at about 1.5 million every week in June, a worrisome sign that the recovery is plateauing. The question is now whether that number starts to rise again if more businesses pause or reverse their reopenings. Apple has shut the majority of its stores in Florida; Texas is shutting down all its bars and pausing its reopening plans. Meanwhile, the Nasdaq hit record highs this week, fueled by strength in “stay-at-home” tech stocks.
DISNEY
Disney walked back plans to reopen its California theme parks, including Disneyland, which were on schedule to welcome back guests on July 17, while the company awaits new state guidelines (southern California has seen a major spike in coronavirus cases this month). However, Disney World in Orlando is still on schedule to reopen next month, despite Florida breaking daily records in new virus cases. Disney also said it would rebrand and retool its classic Splash Mountain ride at both Disney World and Disneyland, amid pressure over the ride’s ties to the controversial 1946 movie Song of the South. The new ride will be built around The Princess and the Frog, the 2009 animated film featuring Disney’s first-ever Black princess.
APPLE UPDATE
Apple held its annual developer’s conference virtually for the first time, focused on a slew of announcements relevant to anyone who owns an iPhone, iPad, Apple TV, or Apple Watch. All are getting software updates; the new iOS 14 will let iPhone users customize the home screen with widgets and set default mail and browser apps, similar to Google’s Android platform. Apple is also going to start making its own chips for Macs, ditching Intel after 15 years in a widely expected move.
AMAZON CLIMATE
Amazon is launching a $2 billion VC fund to invest in technologies, products, and services that will help the e-commerce giant hit its goal of producing zero emissions by 2040. Separately, Amazon has bought the naming rights to Seattle’s KeyArena, but instead of naming it Amazon Arena or Amazon Prime Center, Jeff Bezos announced it will be called the Climate Pledge Arena. The CEO wrote on Instagram that the name will be a reminder of the “urgent need for climate action,” and the arena will be the first net-zero carbon stadium in the world. Amazon has long been criticized for its environmental record, from its AWS unit’s work with major polluters to the sustainability issues related to the company’s one and two-day Prime shipping service. According to Amazon’s own sustainability report for 2019, the company emitted 15 percent more greenhouse gasses last year than the year before and released 51 million tons of carbon dioxide into the atmosphere. Amazon says it will be able to power its operations with 100 percent renewable energy by 2025, five years earlier than its original target.
GROCERY IPO
Albertsons, the country’s largest grocery chain that operates supermarkets under the namesake brand as well as Vons, Safeway, and Acme, among others, is now a publicly-traded company. The company’s private equity owner, Cerberus Capital Management, had been trying to take it public for years and finally found its opportunity with the pandemic-related surge in sales. Albertsons' same-store sales rose 34 percent year-over-year in March and April, according to Reuters, though the industry is starting to see sales return to pre-pandemic levels. That could explain investors’ skepticism: the chain sold 50 million shares at $16 apiece, below the $18-20 range, raising $800 million. Albertsons is trading on the NYSE under the ticker ACI.
