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.
RISING CONSUMER PRICES
The Dow and S&P 500 ended the week at or near all-time highs, despite the inflationary and labor/supply constraints that have been buffeting the economy, dragging down President Biden’s approval ratings, and leading to growing concerns about the upcoming holiday season. Unilever and Procter & Gamble, two of the biggest consumer products companies in the world, said they’d keep raising prices on more household items in order to contend with rising supply chain and commodity costs. Both P&G and Unilever in the U.S., along with Danone and Nestlé in Europe, warned that cost pressures are going to start hitting their balance sheets if global economic conditions don’t improve. For now, though, those price increases are being eaten by retailers and consumers.
TECH FEELS SUPPLY CRUNCH
Not even Big Tech is safe from the supply chain issues. Shares of Snap fell almost 30 percent after the company missed revenue expectations due, in part, to Apple’s privacy changes to iOS. But the Snapchat parent also guided lower, saying advertisers have started to hold back on spending ahead of the holidays since supply chain issues are making it unclear what they'll even have to sell. After all, what point is there paying to advertise for a product that can’t get into the hands of consumers? Snap’s miss also took down Facebook, Alphabet, Twitter, and Pinterest — all of which depend heavily on a healthy digital advertising ecosystem. The worry about supply bottlenecks hitting advertisers will become more apparent when they all report earnings next week.
WEWORK'S RETURN
Two years after its IPO imploded in one of the biggest flameouts in Wall Street history, WeWork is a public company at last. The co-working startup went public through a SPAC merger with BowX Acquisition, giving it a fresh $1.3 billion in new capital and a market cap around $9 billion — a far cry from the $47 billion price tag it heralded ahead of its IPO attempt in 2019. WeWork has spent the pandemic slashing costs, cutting jobs, renegotiating leases, and closing locations to position itself for the post-COVID work landscape. And investors seem to be intrigued by the idea of a leaner, meaner WeWork: shares soared 13 percent in their debut on the NYSE.
BITCOIN HITS NYSE
The first Bitcoin exchange-traded fund launched on the NYSE this week, after getting the green light from the SEC. The ProShares Bitcoin Strategy ETF ($BITO) gives investors a way to trade futures contracts linked to the price of the digital coin through their regular brokerage account, a milestone in the global adoption of cryptocurrencies. Bitcoin had been on fire ahead of the expected launch and crossed $67,000 for a new all-time high before paring some gains in the back half of the week.
CAN’T STOP, WON'T STOP
Tesla shares hit a fresh intraday record on Friday, putting the electric-car maker less than $100 billion away from joining the elite $1 trillion club. (Current members: Apple, Alphabet, Amazon, Microsoft, Saudi Aramco). Tesla’s earnings came in better than expectations for the second quarter in a row, and the stock has been on a tear for months now as it has proved to be more resilient than competitors in the face of the global semiconductor shortage and rising costs of other raw materials, given how vertically integrated the company has become. While Elon Musk skipped the earnings call for the first time, the results spoke for themselves: net income of $1.6 billion on $13.8 billion in revenue. Deliveries for the quarter hit an all-time high, too, and are already well above 2020’s numbers with another full quarter to go.
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.
Tesla, the car company run by Elon Musk, reported Wednesday that it sold more vehicles in the past three months after boycotts hit hard earlier this year, but profits still fell sharply. Third-quarter earnings fell to $1.4 billion, from $2.2 billion a year earlier. Excluding charges, per share profit of 50 cents came in below analysts' estimate. Tesla shares fell 3.5% in after-hours trading. Musk said the company's robotaxi service, which is available in Austin, Texas, and San Francisco, will roll out to as many as 10 other metro areas by the end of the year.
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