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.
WORST WEEK SINCE OCT.
U.S. markets had a downright awful week, with the Dow putting in its worst five-day stretch since October. The selloff started after the Federal Reserve moved up its forecast for interest rate hikes, saying it expects to do a pair in 2023 — an acknowledgment that the economy is recovering more quickly than the central bank predicted just a few months ago and that rising inflation threatens to slow that recovery down. Fed Chair Jerome Powell said the economy isn’t “out of the woods at this point” but that the labor market is looking strong. He also said inflation is rising faster than the Fed expected, and the Fed’s forecast now calls for 3.4 percent inflation in 2021, up from the prior estimate of 2.4 percent. That sent sectors like energy and industrials that had been leading the recovery lower, with the broader market following suit. Then St. Louis Federal Reserve President James Bullard remarked that he expects the first rate hike to come as early as 2022. The S&P lost more than 1.5 percent on the week.
VAX STOCKS SINK
The big COVID vaccine makers also had a miserable week, led by Novavax. The Maryland-based biotech fell 8 percent after reporting extremely positive results for its forthcoming vaccine, as investors looked to take profits on a stock that was at one point up close to 200 percent over the last year. BioNTech, Pfizer, and Moderna also fell on the Novavax news, given that they’re likely to face a new competitor in the market. Pfizer fell the least of the bunch; that stock has been remarkably steady despite being the first out of the gate with a life-saving vaccine that is helping to end a global pandemic. PFE shares are up just over 5 percent on the year while the S&P is up about 13 percent.
SPACS TAKE NASDAQ
It was a fairly busy week for IPOs with two big names joining the Nasdaq. The cannabis review site Weedmaps and the at-home, genetic-testing powerhouse 23andMe both debuted on the exchange via SPACs. Weedmaps CEO Chris Beals said the company chose the SPAC route, merging with Silver Spike Acquisition Corp, in order to better “curate” its investor base. Weedmaps, which runs a SaaS platform for users to rate and buy from cannabis dispensaries in states where it’s legal — think Yelp for pot — received $579 million in a cash infusion in the deal. Meanwhile, 23andMe also went the SPAC route in its debut, merging with Richard Branson’s VG Acquisition Corp. in a deal that values the company at $3.5 billion. The stock spiked 21 percent on its first day of trade.
HONEST EARNINGS
Jessica Alba’s Honest Co. announced its first quarterly earnings release since going public, beating expectations on a narrower-than-expected loss and higher revenues, but showing signs of stagnation in some key areas. Honest’s diaper and wipes segment fell 2 percent year-over-year while digital sales rose just 2 percent, compared to 23 percent in the prior period. (The disappointing diaper sales were in line with Procter & Gamble’s numbers for its Pampers brand, for what it’s worth.) Honest has been branching out into new categories, which appears to be working. Sales of skin and personal care products and household and wellness products were up 42 and 53 percent year-over-year, respectively. The stock is trading roughly where it priced its IPO last month.
BOTTLEGATE
The sponsors of the Euro 2020 soccer tournament are learning a valuable lesson about endorsements in the social media era. Shares of Coca-Cola slipped after Cristiano Ronaldo — one of the biggest soccer stars in the world with a social media following numbering half a billion — swapped two bottles of Coke for a bottle of water at his post-match press conference, urging people to drink “agua.” The clip immediately went viral online, wiping about $4 billion off Coke’s market cap and upsetting the delicate balance of power between superstars and brands in the online era. (Ronaldo started a bit of a trend at the Euro; Italian star Manuel Locatelli copied his move with the Coke bottles, and Manchester United’s Paul Pogba removed a strategically placed bottle of Heineken beer from his presser.) Coke, of course, is too big to feel much long-term pain from a fleeting viral video; the beverage giant said in April its global case volume is already back to pre-pandemic levels and the stock is up more than 15 percent in the last year.
Stocks closed lower Monday as investors continued to price in COVID-19 omicron variant fears. Reopening stocks like airlines, financial companies, restaurants and hotels, and more, dragged on the major indexes as businesses and events took a pause over the weekend amid rising case numbers in metropolitan areas. This comes a week after the Federal Reserve announced it plans to speed up its asset tapering timeline in January and institute three rate hikes next year. Is that plan aging well? Robert Conzo, CEO of The Wealth Alliance, joins Cheddar News' Closing Bell to discuss market movement, how stocks could close out the year, what the Fed could do in 2022, and more.
After a vote in one Buffalo, New York-area Starbucks created the first workers union in the coffee chain's history, the company has announced that it is ready to negotiate in good faith with the new bargaining unit. But a tense process where labor organizers leveled accusations of anti-union activity at the coffee giant may make that difficult. Cortlin Harrison, a barista at the unionized store, spoke to Cheddar about making a deal. "We can move past all the dirty tricks, the union-busting, the captive audience meetings," he said. "I'm ready to go to the table, and my fellow baristas are ready to go to the table, and just move forward."
This year's worldwide semiconductor shortage limited the supply of everything from new cars to smartphones; and now, many in the chip industry expect the shortage to continue deep into 2022, and maybe even 2023. Semiconductor senior research analyst for Robert W. Baird & Co., Tristan Gerra, joins Cheddar News' Closing Bell to discuss.
Direct health care company Nomi Health recently raised $110 million in a Series A round. Nomi Health lets public and private organizations directly purchase healthcare at reduced costs, and pay providers in real-time. It also delivers healthcare directly to under-served communities via its fleet of mobile care units, which the company says is the largest in the country. Nomi Health says its mission is to improve the health care experience for all Americans. Nomi Health CEO Mark Newman joined Cheddar News' Closing Bell to discuss.
American Express and Nova Credit have partnered the credit passport program aimed at expanding access to credit for immigrants from the Dominican Republic, Nigeria, Kenya, and Brazil. Misha Esipov, co-founder and CEO of Nova Credit, joined Cheddar's Ken Buffa to talk about the program's benefits for immigrants who have to start over in the U.S. and are looking to establish a credit history. "If you were a good borrower in your home country — and you can prove you were a borrower in your home country — when you first arrive here, you can use that information to continue to be a good borrower," he said of the service.
Despite the rising cost of a home in the U.S., sales rose 1.9 percent in November, and according to Zillow, prices are expected to climb even higher in 2022. M. Ryan Gorman, president and CEO of Coldwell Banker Real Estate, told Cheddar's "Closing Bell" that while median prices are high, demand for a new home is just as high, particularly in "tax and weather favorable" destinations like Florida, Tennessee, and Texas. Gorman also said he sees buyer demand remaining high next year even if interest rates rise somewhat, noting that the already tight housing inventory is expected to slim down even more and foreign purchasers return to the market. "As we get past the holidays and those foreign buyers are able to come back and actually acquire homes and go shopping, I think that may be a bigger driver of some of that increase in buyer demand," he said.
The airline industry says it is contending with staff shortages that threaten to hamper operations amid the COVID resurgence, andDelta Airlines CEO Ed Bastian called on the CDC to revise its guidance for vaccinated workers who test positive from a 10-day quarantine to just five. Chuck Liberman, chief investment officer and managing partner at Advisors Capital Management LLC, joined Cheddar to talk about the current guidance on isolation and why he believes the omicron variant calls for more relaxed guidance given its reportedly mild symptoms.
A new series is looking to advance Black founders who have disruptive ideas and companies. 'Bet on Black' is a new series that allows black entrepreneurs to pitch their businesses in the hopes of securing $200,000 in funding. Revolt TV and Target teamed up to create the show. Detavio Samuels, CEO of Revolt, joins Cheddar News to discuss.
Bitcoin's rise to the mainstream has been a wild ride this year. The cryptocurrency is trading a little under $49,000 Wednesday morning and is set to finish the year sharply higher than where it began earlier this year. Ether prices also soared this year, rising from $730 per coin to nearly $4,000. Ben Armstrong, founder of Bitboy Crypto, joins us to discuss what's in store for crypto in 2022.
