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.
VOLATILITY IS BACK: Stocks ended the week on a high note, despite the market notching its biggest single-day decline since March on Thursday. That drop, in which the Dow lost nearly 7 percent in a single session, was precipitated by Fed Chair Jerome Powell Wednesday saying that the economic recovery is going to be slower and more painful than many may have hoped. It came amid a worrisome rise in coronavirus cases as more state and local economies reopen particularly in the South, which did not see an overwhelming initial wave. Combined with yet another high weekly jobless claims report that showed 1.5 million new workers added to the unemployment rolls, investors’ hopes that the pandemic’s effects on the economy would be short-lived appears to be dashed.
ROBINHOOD’S MERRY TRADERS: The millennial-focused stock trading app Robinhood saw a surge in activity as the stock market ripped higher in recent weeks, with day traders buying beaten down and bankrupt companies and riding them higher. One 26-year-old trader made $1,500 in less than a day buying American Airlines when everyone else was selling. Speculative day trading is nothing new, but commission-free apps like Robinhood are making it easier than ever to make risky short-term bets — bets that may have helped fuel the recovery rally but left amateur investors crushed when the market turned on Thursday, led by swift declines in airliners, cruise operators, and retailers — many of the most popular stocks on Robinhood.
TESLA VS. THE NEXT TESLA?: It was an extraordinary week for electric-vehicle makers. Tesla hit $1,000 per share for the first time in its history, before retreating. Even on the dip, Tesla is now approaching Toyota’s $210 billion market capitalization. If and when the red-hot stock passes that mark, it will become the world’s most valuable carmaker despite producing a fraction of the vehicles made by its larger competitors. (Tesla’s gains were part of a broader rally in the Nasdaq Composite, which hit a milestone of its own when it crossed 10,000 for the first time on Wednesday). Meanwhile, an emerging challenger to Tesla is also making enough of a splash in the market to get the attention of Elon Musk. Nikola, also named for the Serbian-American electrical engineer for whom Tesla gets its name, is only a week into being a public company and already saw its market cap double in a day and briefly soar past that of Ford — despite the fact that Nikola hasn’t built a single vehicle and won’t make $1 in revenue this year. Investors are speculating that Nikola could upend the trucking market with a business model that’s based on hydrogen fuel cell technology, rather than battery power. Ford, for its part, doesn’t plan to take the competition lying down: the automaker revealed plans this week to produce an all-electric F-150 pickup by 2022.
MEDIA RECKONING: New faultlines have emerged in the overlapping worlds of media and entertainment, already buffeted by extreme upheaval due to the pandemic. Top editors at the New York Times, Philadelphia Inquirer, Bon Appetit magazine, and Refinery29 all lost their jobs in the last week over different issues related to the reckoning over racial injustice sweeping the country. Cops, the longest-running reality show on TV was canceled, as was Live PD, a more recent entrant into the policing-as-entertainment genre. HBO Max took down Gone With the Wind over concerns it glorified the antebellum south, saying it would put the 1939 Best Picture-winner back up with a note on its historical context.
HOLLYWOOD REOPENING: Amid the upheaval, Hollywood has cracked open the door to restarting content production. Film and TV productions in California were given the go-ahead to get back to work as of this weekend, with new health restrictions in place that will affect everything from how many extras can be on set to craft service spreads. Movie theaters in California have also been given the green light to reopen as well, but must limit capacity to 25 percent or 100 attendees, whichever is lower. Disney announced it will reopen its flagship theme parks in southern California, including Disneyland, on July 17 with mandatory temperature checks and no cast member meet-and-greets.
