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.
RECOVERY IN FULL SWING
The S&P notched another record high on the back of the June jobs report, showing that the labor market added 850,000 payrolls for the month. That was a nice upside surprise against an expectation of about 706,000 jobs added. Wages were up 0.3 percent for the month, in line with expectations. The unemployment rate nudged up to 5.9 percent. About 70 percent of the jobs lost during the pandemic have now returned, with a little less than seven million left to go. The Congressional Budget Office predicted this week the U.S. will hit pre-COVID levels of employment by this time next year as it doubled its previous growth forecast for the year. The nonpartisan CBO now estimates GDP growth of 7.4 percent for 2021, thanks to the unprecedented levels of government stimulus that are helping the economy recover faster than anyone predicted. The CBO also hiked its inflation and deficit forecasts for the year.
FACEBOOK JOINS $1T CLUB
A federal judge tossed the government’s antitrust complaint against Facebook, saying the FTC didn’t make sufficient legal claims in its argument that the social-media giant was a monopoly. The judge did give the government 30 days to refile the suit, but the decision amounted to a huge win for Facebook and Big Tech as the industry faces a regulatory crackdown. A concurrent suit brought against Facebook by a majority of state attorneys general was also dismissed entirely. Facebook shares soared on the news, leading the Nasdaq to an all-time high, and bringing the company’s market valuation above $1 trillion for the first time.
DIDI DEBUTS
Didi, the ‘Uber of China’, is now a publicly traded company in the U.S. Didi went public on the NYSE in the biggest IPO by a Chinese company since Alibaba made a splash in 2014. To give a sense of how big Didi is, the platform boasts more active users in China than there are people in the U.S., plus millions more in Russia, Mexico, and Brazil. Uber sold its business in China to Didi five years ago in exchange for a stake in the company, which is now worth more than $8 billion. Shares climbed 16 percent on their first day of trading before tumbling on the news that China was conducting a cybersecurity review of the ride-hailing company.
ROBINHOOD FILES
Continuing the drumbeat of IPOs, Robinhood filed the paperwork to go public in one of the year’s most anticipated new offerings, aiming for a valuation of about $40 billion. The online trading platform revealed that it has 18 million accounts and $80 billion in customer assets, with its median customer age just 31. The company even squeaked out a profit in 2020 on rising revenues, though it was offset by more than $1 billion in losses related to the GameStop short squeeze that came later. Robinhood is still facing at least 50 class-action lawsuits related to its role in that trading mania, plus growing scrutiny from regulators. On the same day it filed the S-1, FINRA announced a $70 million settlement with the company for outages and misleading customers — the largest fine ever levied by that regulatory body. The stock will trade on the Nasdaq under the ticker ‘HOOD’.
BILLIONAIRES IN SPACE
Jeff Bezos is going to space later this month. Richard Branson is trying to beat him there. Just after Bezos announced he would bring Wally Funk, the pioneering female aviator, along with him on Blue Origin’s inaugural passenger flight scheduled for July 20, Virgin Galactic said Branson will be aboard its next test flight scheduled for July 11. Blue Origin’s CEO told the New York Times that while he wishes Branson well, the flight won’t truly count because Virgin Galactic’s SpaceShipTwo doesn’t quite reach the 62-mile altitude that is widely considered to be the edge of outer space, while Blue Origin’s New Shepard will. Regardless, shares of Virgin Galactic surged on Branson’s announcement. The stock has doubled this year amid some wild volatility that saw shares go from $24 in January to $60 in February to $15 in May before climbing again. Blue Origin is not publicly traded.
