The Federal Reserve's preferred inflation gauge showed prices rising 0.6 percent in January from the month before and 4.7 percent from a year ago, up from 0.4 percent and 4.6 percent in December. This comes after months of slowing inflation, which have raised expectations on Wall Street that the Fed will ease up on interest rate hikes. The FOMC minutes released this week showed Fed officials acknowledging that inflation is slowing, but not enough yet to change its course on rate hikes. The S&P 500 and Dow Jones Industrial sank after the inflation report.
RETAIL ROUNDUP
Both Walmart and Home Depot reported earnings this week, painting an uncertain picture of the retail sector. Shares of Walmart initially fell after the company issued a cautious profit guidance for the year ahead — but then shot back up on the back of strong sales numbers. Shares of Home Depot, meanwhile, fell after the company issued a report showing strong earnings but a disappointing guidance for the coming year. In other words, strong fourth quarters didn't make up for the uncertainty about economic headwinds in 2023.
NVIDIA'S AI BET
Shares of Nvidia shot up 15 percent on Thursday after the chipmaker revealed that it is investing more heavily in artificial intelligence. The company also beat earning expectations, with adjusted earnings coming in at 88 cents per share compared to Wall Street estimates of 81 cents per share. The big takeaway was that Nvidia is partnering with cloud-service providers to offer artificial intelligence-as-a-service to other companies looking for those capabilities.
GOOGLE VS GONZALES
The Supreme Court met earlier this week to hear a case with potentially huge implications for the internet. The case, Gonzalez v. Google, concerns whether websites can be sued for their automatic recommendations of user content. The family of 23-year-old Nohemi Gonzalez, who was killed by Islamic State gunmen in Paris in 2015, argued that YouTube is partly responsible for the killing, as its platform was used for Islamic State recruiting.
Nestlé has dismissed its CEO Laurent Freixe after an investigation into an undisclosed relationship with a direct subordinate. The company announced on Monday that the dismissal was effective immediately. An investigation found that Freixe violated Nestlé’s code of conduct. He had been CEO for a year. Philipp Navratil, a longtime Nestlé executive, will replace him. Chairman Paul Bulcke stated that the decision was necessary to uphold the company’s values and governance. Navratil began his career with Nestlé in 2001 and has held various roles, including CEO of Nestlé's Nespresso division since 2024.
Kraft Heinz is splitting into two companies a decade after they joined in a massive merger that created one of the biggest food companies on the planet. One of the companies will include brands such as Heinz, Philadelphia cream cheese and Kraft Mac & Cheese. The other will include brands like Oscar Mayer, Kraft Singles and Lunchables. When the company formed in 2015 it wanted to capitalize on its massive scale, but shifting tastes complicated those plans, with households seeking to introduce healthier options at the table. Kraft Heinz's net revenue has fallen every year since 2020.
About 780,000 pressure washers sold at retailers like Home Depot are being recalled across the U.S. and Canada, due to a projectile hazard that has resulted in fractures and other injuries among some consumers.
