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.
ROBINHOOD RISES:
Apparently, retail investors would like to be spending even more of their time playing the stock market. Robinhood's stock surged 25 percent earlier this week after the investment app announced that it was extending pre-market trading to 7 a.m. from 9 a.m. ET and after-hours trading to 8 p.m. That's four extra hours of checking your GameStop holdings, buying incremental shares of Tesla, and trying to figure out how options work. The company said the extension is just the next step on the path to 24/7 trading. Maybe then the company can partner with 7-Eleven for a slushie/hot dog combo paid for on margin.
Related news:
- In a blow to state regulators, a Massachusetts judge ruled in favor of Robinhood in a case accusing the company of encouraging novice investors to make risky trades.
- The company is also making progress toward launching a retirement account option for users, according to a recent report from Bloomberg.
APPLE WINNING STREAK:
Stocks are up. The yield curve is flattening, and Apple is on its longest winning streak since 2003. The iPhone maker blew through the economic uncertainty around rate hikes, inflation, and the war in Ukraine with 11 straight days of price gains, inching the company closer to a $3 trillion market cap. Bank of America added to the exuberance with a report saying iPhone demand remains strong, despite the recent announcement that Apple plans to cut production of its budget-priced iPhone SE and iPhone 13 due to lack of demand. The streak ended on Wednesday, but the rally gave a boost to the ailing equities market.
Other Apple headlines:
- Look out Robinhood, Apple is working on a suite of in-house financial services products called "Breakout."
- It's also launching an IT management subscription service for small businesses.
- And it will no longer repair iPhones marked as missing.
MEME-STOCK MINI-BOOM:
Here at Cheddar, we try not to write about meme-stocks every other week, but frankly, they have a real knack for staying in the news. This time, it's another bout of volatility from OG meme-stocks GameStop and AMC. The New York Stock Exchange actually halted trading of both companies Tuesday morning amid heavy trading volume, putting a pause on a month-long hot streak for the movie theater chain and video game retailer. GameStop was up 40 percent from a month ago, and AMC saw even bigger gains over the same period. Decoding these stocks' ups and downs is often a fool's errand, but the latest upswing might be related to retail investors pushing back against short-selling from institutional investors. Both stocks, however, lost some of their luster going into the weekend.
In related meme-stock news:
- While AMC is happy to be a meme-stock, CEO Adam Aron said the company is also pursuing "transformational M&A," perhaps in reference to the company's recent, and rather unusual, investment in a silver mine.
- A consulting firm has sued GameStop for allegedly refusing to pay a $30 million bill.
- Is he talking about his employees? Or GameStop's legion of loyal retail investors:
LULULEMON LIGHTS UP:
It turns out the omicron wave didn't stop consumers from buying high-end stretchy pants. Apparel brand Lululemon Athletica reported strong quarterly earnings and 42 percent revenue growth in 2021 overall, despite the company's previous warning that sales might fall off due to labor shortages and reduced hours in some locations. The news sent the stock soaring, and it's still up almost 15 percent in the last five days. CEO Calvin McDonald noted that athletic attire is beating out the rest of the apparel sector — a trend that started during the pandemic's at-home work-out boom but now seems to have staying power.
Related:
- Some of the bullishness around the brand stems from it recently making inroads into the sneaker space, which is another booming retail category.
- L.L. Bean is also chalking up recent revenue gains to its athleisure sales.
DARK FOREBODINGS:
Who knew an earnings call could be so ominous? Investors were spooked this week after RH (formerly Restoration Hardware) CEO Gary Friedman said the macro-situation was not looking good. He hinted that inflation pressures could prove even more of a challenge for U.S. businesses than anticipated, especially when it comes to shipping rates. Craig Fuller, CEO of FreightWaves, had more dark forebodings. He said the trucking industry was headed toward another "bloodbath" like the one it experienced in 2019, due to inflation softening demand. Internationally, the World Bank is predicting that the war in Ukraine could trigger the worst debt crisis in developing nations in a generation.
FACTS AND FORECASTS:
The auto industry is shifting into a lower gear. Sales of new cars and trucks are expected to drop around 15 percent from the first quarter of 2021, according to industry trackers such as Edmunds and Cox Automotive, and recent data from automakers suggest the drop-off has already started. Toyota has reported a 15 percent drop in sales in the last quarter, while GM reported a 20 percent drop. Upcoming earnings from Ford, Stellantis, and Honda are expected to show similar drops, but the companies' respective EV rollouts are still driving optimism.
Updated April 2, 2022 at 8:21 a.m. ET to address formatting issues and add links for context.
