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.
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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.
