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.”
