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.
BANK EARNINGS BUST
Lackluster earnings reports from the biggest banks on Friday capped off an already rocky week for Wall Street. The Dow Jones dropped more than 300 points as shares of JPMorgan and Citigroup slipped following reports of falling profits in the fourth quarter. Don't feel too bad for the bankers though. One weak quarter doesn't change the fact that banks saw record profits in 2021, as the pandemic fueled a boom in financial markets. This could be a sign that 2022 may be a very different year for some of the biggest players in the market.
TECH STOCKS WOES
On that note, tech stocks' early 2022 doldrums continued with more losses this week. The Nasdaq slumped 2.5 percent on Thursday, which was its biggest drop since October, while the other major indexes weren't far behind. Benchmark stocks such as Apple and Microsoft fueled the slide, with shares falling 1.9 percent 4.2 percent respectively, though they've since recovered. The tech-led tumble came as markets brace for interest rate hikes in 2022. Fed Chair Jerome Powell confirmed during his nomination hearing that rate hikes were on the table, while JPMorgan CEO Jamie Dimon speculated that the Fed could raise rates five to six times this year. The Nasdaq ended Friday on a high note, up more than half of a percent.
INFLATION HITS 40-YEAR HIGH
The case for rate hikes intensified this week with another headline-grabbing inflation report. The consumer price index showed a 7 percent jump in prices for December, which is the largest gain since 1982. Though supply chain constraints still appear to be contributing the lion's share of inflation, with automobiles and other durable goods posting the biggest price hikes, the sticker shock has stirred up a fresh round of debate on how the Fed and Biden administration should respond. In an otherwise tough week for the markets, however, investors took the news in stride.
RETAIL SALES SLIP
While heavy demand for goods is at least partly responsible for the latest inflation numbers, retail sales dipped slightly in the heart of the holiday season. The latest Commerce Department data shows a 1.9 percent drop in sales in December. Economists are pointing to higher prices and the ongoing omicron outbreak as the cause of the dip in spending. At the same time, many have pointed to the fact that holiday shopping is beginning earlier and earlier, so some of that seasonal pop may have been distributed over the prior months.
FORD CROSSES $100B
If high inflation, falling profits, and sinking shares have you down, Ford has a pick me up. The U.S. automaker crossed the $100 billion market cap for the first time this week. The symbolic victory comes amid strong tailwinds for the company, which saw its shares double in value last year. While Tesla continues to leave other automakers in the dust in terms of stock value, Ford's plan to double production for the electric version of its F-150 has placed it in the running.
The Rev. Al Sharpton is set to lead a protest march on Wall Street to urge corporate America to resist the Trump administration’s campaign to roll back diversity, equity and inclusion initiatives. The New York civil rights leader will join clergy, labor and community leaders Thursday in a demonstration through Manhattan’s Financial District that’s timed with the anniversary of the Civil Rights-era March on Washington in 1963. Sharpton called DEI the “civil rights fight of our generation." He and other Black leaders have called for boycotting American retailers that scaled backed policies and programs aimed at bolstering diversity and reducing discrimination in their ranks.
President Donald Trump's administration last month awarded a $1.2 billion contract to build and operate what's expected to become the nation’s largest immigration detention complex to a tiny Virginia firm with no experience running correction facilities.
Chipmaker Nvidia is poised to release a quarterly report that could provide a better sense of whether the stock market has been riding an overhyped artificial intelligence bubble or is being propelled by a technological boom that’s still gathering momentum.
Cracker Barrel said late Tuesday it’s returning to its old logo after critics — including President Donald Trump — protested the company’s plan to modernize.
Low-value imports are losing their duty-free status in the U.S. this week as part of President Donald Trump's agenda for making the nation less dependent on foreign goods. A widely used customs exemption for international shipments worth $800 or less is set to end starting on Friday. Trump already ended the “de minimis” rule for inexpensive items sent from China and Hong Kong, but having to pay import taxes on small parcels from everywhere else likely will be a big change for some small businesses and online shoppers. Purchases that previously entered the U.S. without needing to clear customs will be subject to the origin country’s tariff rate, which can range from 10% to 50%.
Southwest Airlines will soon require plus-size travelers to pay for an extra seat in advance if they can't fit within the armrests of one seat. This change is part of several updates the airline is making. The new rule starts on Jan. 27, the same day Southwest begins assigning seats. Currently, plus-size passengers can pay for an extra seat in advance and later get a refund, or request a free extra seat at the airport. Under the new policy, refunds are still possible but not guaranteed. Southwest said in a statement it is updating policies to prepare for assigned seating next year.
Cracker Barrel is sticking with its new logo. For now. But the chain is also apologizing to fans who were angered when the change was announced last week.
Elon Musk on Monday targeted Apple and OpenAI in an antitrust lawsuit alleging that the iPhone maker and the ChatGPT maker are teaming up to thwart competition in artificial intelligence.
