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.
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Spain's government has fined Airbnb 64 million euros or $75 million for advertising unlicensed tourist rentals. The consumer rights ministry announced the fine on Monday. The ministry stated that many listings lacked proper license numbers or included incorrect information. The move is part of Spain's ongoing efforts to regulate short-term rental companies amid a housing affordability crisis especially in popular urban areas. The ministry ordered Airbnb in May to remove around 65,000 listings for similar violations. The government's consumer rights minister emphasized the impact on families struggling with housing. Airbnb said it plans to challenge the fine in court.
Roomba maker iRobot has filed for Chapter 11 bankruptcy protection, but says that it doesn’t expect any disruptions to devices as the more than 30-year-old company is taken private under a restructuring process. iRobot said that it is being acquired by Picea through a court-supervised process. Picea is the company's primary contract manufacturer. The Bedford, Massachusetts-based anticipates completing the prepackaged chapter 11 process by February.
Serbia’s prosecutor for organized crime has charged a government minister and three others with abuse of position and falsifying of documents related to a luxury real estate project linked to U.S. President Donald Trump’s son-in-law Jared Kushner. The charges came on Monday. The investigation centers on a controversy over a a bombed-out military complex in central Belgrade that was a protected cultural heritage zone but that is facing redevelopment as a luxury compound by a company linked to Kushner. The $500 million proposal to build a high-rise hotel, offices and shops at the site has met fierce opposition from experts at home and abroad. Selakovic and others allegedly illegally lifted the protection status for the site by falsifying documentation.
