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.
OMICRON DOWNTURN
Another wave means another downturn as economists adjust their forecasts for GDP growth in 2022 over growing concerns that the omicron variant will be a drag on the recovery. Already over the holiday weekend, airlines canceled thousands of flights, and hospitals are feeling the strain as daily case counts hit record highs. The latest wave is expected to curb growth in the first quarter of 2022 and shift widely anticipated gains later into the year. Some economists have pointed out, however, that this wave is expected to cause less economic damage than prior ones, including the delta variant, with longer-term predictions currently a mixed bag.
SANTA CLAUS RALLY
Despite emerging omicron woes, the stock market pulled off a so-called "Santa Claus rally" this week, as stocks rose steadily from their December 20 low. The last week of the year often brings a slight rally, so markets aren't necessarily banking on continued gains. While the Dow and S&P 500 finished at all-time highs on Wednesday, analysts expect the rally to fade going into the new year, especially as the latest wave takes its toll on industries such as airlines and cruise ships. While markets were up big for 2021, they nonetheless saw slight losses on the last, thinly-traded day of the year.
CRUISE STOCKS DIVE
One sector that is taking omicron on the chin is the embattled cruise industry. After a disastrous 2020, the industry held up relatively well through 2021 and into December. That changed as familiar reports of outbreaks on cruise ships returned this week, and the CDC announced that even vaccinated people should stay away. Shares of Carnival, Royal Caribbean, and Norwegian were down 1 to 2 percent on Friday.
JETBLUE LEADS
Meanwhile, in the skies, shares of JetBlue Airways whipsawed this week amid uncertainty around omicron and new CDC guidelines on quarantining. The stock was up 7.5 percent earlier in the week, even as the airline industry canceled thousands of flights. The company announced that it plans to cancel flights through mid-January due to crew shortages, and shares eventually slid along with other airline stocks. However, JetBlue shares finished the week just slightly down as it leads the pack in laying out plans for 2022.
DIDI LOSSES
Chinese ride-hailing company Didi Global saw its shares tumble on Monday after a report from the Financial Times that current and former employees were banned from selling their stock, even as the company's 180-day, post-IPO lock-up period ended. The stock dropped more than 8 percent on the week. The scandal comes as Didi moves forward with plans to delist from U.S. exchanges amid a broader regulatory crackdown in both the U.S. and China.
Nvidia on Wednesday became the first public company to reach a market capitalization of $5 trillion. The ravenous appetite for the Silicon Valley company’s chips is the main reason that the company’s stock price has increased so rapidly since early 2023.
Chris Williamson, Chief Business Economist at S&P Global, breaks down September’s CPI print and inflation trends, explaining what it means for markets.
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.
