The Week's Top Stories is a guided tour through the biggest market stories of the week, from winning stocks to brutal dips to the facts and forecasts generating buzz on Wall Street.
RETAIL SALES RISE
Retail sales shot up 3 percent in January, blowing past Wall Street estimates and providing further evidence of the U.S. economy's resilience despite macroeconomic uncertainty. One big driving factor was food and drink sales, which soared 25.2 percent from the year before. In addition, general merchandise sales were up 4.5 percent. The data put downward pressure on markets, which saw it as a sign that the economy is still overheated.
MONTHLY INFLATION RISES
The latest consumer price index came out on Tuesday, and the results left markets uncertain about the future course of inflation. While annual inflation ticked down from 6.5 percent to 6.4 percent, monthly inflation jumped from a 0.1 percent decline to a 0.5 percent increase. The gains were mostly fueled by shelter, food, and a rebound in energy prices after months of declines. The debate continues over how the Federal Reserve will respond to the data, and in particular whether the latest number will push the Fed to double down again on rate hikes.
AIRBNB BUMP
Airbnb's stock is up almost 20 percent this week, seeing its biggest one-day gain on Wednesday after reporting its first annual profit and forecasting a strong 2023. The home rental service reported $1.9 billion in profits in 2022, after losing $352 million the year before. It is now expecting a first quarter profit of between $1.75 billion and $1.82 billion, which is up from $1.5 billion in 2022. “We’re particularly encouraged by European guests booking their summer travel earlier this year, the market share gains we are seeing in Latin America, as well as the continued recovery within Asia Pacific," Airbnb said in a shareholder letter.
ROKU RALLY
Roku saw an even bigger rally after reporting a bump in streaming hours and revenue. While profits were down slightly, revenue increased from $865 million in the same quarter last year to $867 million. Streaming hours also hit 23.9 billion, up from 21.9 billion in the third quarter. In addition, Roku benefited from easing supply chain issues. “U.S. smart-TV unit sales were better than expected, benefiting from lower TV-panel prices and freight costs," said the company in a shareholder letter. Shares of Roku were up more than 30 percent at the end of the trading week.
Nvidia on Wednesday became the first public company to reach a market capitalization of $5 trillion. The ravenous appetite for the Silicon Valley company’s chips is the main reason that the company’s stock price has increased so rapidly since early 2023.
Chris Williamson, Chief Business Economist at S&P Global, breaks down September’s CPI print and inflation trends, explaining what it means for markets.
A big-screen adaptation of the anime “Chainsaw Man” has topped the North American box office, beating a Springsteen biopic and “Black Phone 2.” The movie earned $17.25 million in the U.S. and Canada this weekend. “Black Phone 2” fell to second place with $13 million. Two new releases, the rom-com “Regretting You” and “Springsteen — Deliver Me From Nowhere,” earned $12.85 million and $9.1 million, respectively. “Chainsaw Man – The Movie: Reze Arc” is based on the manga series about a demon hunter. It's another win for Sony-owned Crunchyroll, which also released a “Demon Slayer” film last month that debuted to a record $70 million.
The Federal Aviation Administration says flights departing for Los Angeles International Airport were halted briefly due to a staffing shortage at a Southern California air traffic facility. The FAA issued a temporary ground stop at one of the world’s busiest airports on Sunday morning soon after U.S. Transportation Secretary Sean Duffy predicted that travelers would see more flights delayed as the nation’s air traffic controllers work without pay during the federal government shutdown. The hold on planes taking off for LAX lasted an hour and 45 minutes and didn't appear to cause continued problems. The FAA said staffing shortages also delayed planes headed to Washington, Chicago and Newark, New Jersey on Sunday.
Boeing workers at three Midwest plants where military aircraft and weapons are developed have voted to reject the company’s latest contract offer and to continue a strike that started almost three months ago. The strike by about 3,200 machinists at the plants in the Missouri cities of St. Louis and St. Charles, and in Mascoutah, Illinois, is smaller in scale than a walkout last year by 33,000 Boeing workers who assemble commercial jetliners. The president of the International Association of Machinists says Sunday's outcome shows Boeing hasn't adequately addressed wages and retirement benefits. Boeing says Sunday's vote was close with 51% of union members opposing the revised offer.
The stunning indictment that led to the arrest of more than 30 people — including Miami Heat guard Terry Rozier and other NBA figures — has drawn new scrutiny of the booming business of sports betting in the U.S. The multibillion-dollar industry has made it easy for sports fans — and even some players — to wager on everything from the outcome of games to that of a single play with just a few taps of a cellphone. But regulating the rapidly-growing industry has proven to be a challenge. Professional sports leagues’ own role in promoting gambling has also raised eyebrows.
