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.
MARKETS MANAGE A WIN
Stocks broke a seven-week losing streak, the longest such streak since 2001, ending up broadly across sectors as investors reviewed earnings data. Encouraging news from the Commerce Department showed that inflation rose to a still-high 6.3 percent in April from a year earlier, but it was the first hint of a slowdown since November 2020, a sign that high prices might be moderating for the moment.
TO INFINITY, AND BEYOND MEAT
Beyond Meat needed a miracle. The stock was down nearly 90 percent from its all-time high, and plant-based meat sales were stuck in place. So the company brought on Kim Kardashian as a "chief taste consultant," who apparently is a big fan of the product, but even that didn't appear to be enough. Shares slid another 10 percent on Tuesday. Though now it looks like Kim's star power just needed some time to sink in, as shares of Beyond Meat shot up nearly 12 percent on Wednesday. The rally offered some relief for the beleaguered stock, but some are still not convinced that Beyond is the future of food.
ABERCROMBIE CRUMBLES
If you thought stitch sweater polos were immune to inflation, think again. Shares of Abercrombie & Fitch fell 25 percent after the company reported a $14.8 million net loss for the first quarter and a dimmer outlook for the coming quarter. CEO Fran Horowitz said higher prices related to freight and raw material costs were putting a dent in consumer confidence, even as the company banked on its clientele to keep shelling out for expensive casual wear. The stock bounced back Wednesday along with a number of retail stocks after the Fed released its latest FOMC minutes, which confirmed the central bank's plan to move ahead with interest rate hikes so that it has flexibility later in the year.
OH SNAP
In a note to employees, Snap CEO Evan Spiegel warned that the macro environment had "deteriorated further and faster than we anticipated," due to a cutback in digital ad spending related to inflation. The note came just one month after the company released its last earnings report, which already wasn't looking too good for the social media company. Shares plunged 43 percent, on top of a more than 50 percent drop since the beginning of the year, and other tech stocks that rely on advertising followed suit. Meta, Twitter, Roku, and Google parent Alphabet all dropped on Tuesday.
Broad gains in the markets were led by tech stocks this week despite the Snap news, with heavy-hitters like Microsoft, Apple, and Amazon all seeing their shares rise.
DISPATCHES FROM DAVOS
The world's richest and most powerful individuals gathered in Switzerland this week for the annual Davos conference, and the vibes were decidedly not good. German Chancellor Olaf Scholz condemned the Russian invasion. International Monetary Fund Managing Director Kristalina Georgieva bemoaned the breakdown of the global economic order, and legendary investor George Soros said that the Russian "invasion may have been the beginning of the Third World War and our civilization may not survive it.”
A big-screen adaptation of the anime “Chainsaw Man” has topped the North American box office, beating a Springsteen biopic and “Black Phone 2.” The movie earned $17.25 million in the U.S. and Canada this weekend. “Black Phone 2” fell to second place with $13 million. Two new releases, the rom-com “Regretting You” and “Springsteen — Deliver Me From Nowhere,” earned $12.85 million and $9.1 million, respectively. “Chainsaw Man – The Movie: Reze Arc” is based on the manga series about a demon hunter. It's another win for Sony-owned Crunchyroll, which also released a “Demon Slayer” film last month that debuted to a record $70 million.
The Federal Aviation Administration says flights departing for Los Angeles International Airport were halted briefly due to a staffing shortage at a Southern California air traffic facility. The FAA issued a temporary ground stop at one of the world’s busiest airports on Sunday morning soon after U.S. Transportation Secretary Sean Duffy predicted that travelers would see more flights delayed as the nation’s air traffic controllers work without pay during the federal government shutdown. The hold on planes taking off for LAX lasted an hour and 45 minutes and didn't appear to cause continued problems. The FAA said staffing shortages also delayed planes headed to Washington, Chicago and Newark, New Jersey on Sunday.
Boeing workers at three Midwest plants where military aircraft and weapons are developed have voted to reject the company’s latest contract offer and to continue a strike that started almost three months ago. The strike by about 3,200 machinists at the plants in the Missouri cities of St. Louis and St. Charles, and in Mascoutah, Illinois, is smaller in scale than a walkout last year by 33,000 Boeing workers who assemble commercial jetliners. The president of the International Association of Machinists says Sunday's outcome shows Boeing hasn't adequately addressed wages and retirement benefits. Boeing says Sunday's vote was close with 51% of union members opposing the revised offer.
The stunning indictment that led to the arrest of more than 30 people — including Miami Heat guard Terry Rozier and other NBA figures — has drawn new scrutiny of the booming business of sports betting in the U.S. The multibillion-dollar industry has made it easy for sports fans — and even some players — to wager on everything from the outcome of games to that of a single play with just a few taps of a cellphone. But regulating the rapidly-growing industry has proven to be a challenge. Professional sports leagues’ own role in promoting gambling has also raised eyebrows.
Tesla, the car company run by Elon Musk, reported Wednesday that it sold more vehicles in the past three months after boycotts hit hard earlier this year, but profits still fell sharply. Third-quarter earnings fell to $1.4 billion, from $2.2 billion a year earlier. Excluding charges, per share profit of 50 cents came in below analysts' estimate. Tesla shares fell 3.5% in after-hours trading. Musk said the company's robotaxi service, which is available in Austin, Texas, and San Francisco, will roll out to as many as 10 other metro areas by the end of the year.
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