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.
JOBS REPORT SHOCKS: U.S. stocks surged to end the week after the May jobs report showed an unexpected — even shocking — reversal in the labor market. Even though the unemployment rate remains higher than it was during the darkest days of the Great Recession, it ticked down, from 14.7 to 13.3 percent. Despite estimates that the economy would shed another eight million jobs in the month, employers actually added 2.5 million payrolls, an encouraging sign that the worst of the pandemic-caused losses in the job market may be behind us. Markets surged on the news with the S&P 500 jumping 2.6 percent. The hospitality industry led the gains as more restaurants, bars, and hotels across the country began to reopen. Still, with the trillions in federal stimulus dollars that have been set aside to cushion the economic blow from the coronavirus running out, and some 35 million Americans still out of work, economists are warning that the strong data does not mean the economy is out of the woods.
SOCIAL JUSTICE SPENDING: Some of the largest and most influential financial services institutions in the world this week committed to spending millions on issues related to social justice and racial inequality as protests erupted across the country over the police killing of George Floyd. The Japanese conglomerate SoftBank says it is launching a new fund aimed exclusively at backing entrepreneurs of color. The Opportunity Growth Fund will start with a $100 million investment, and SoftBank says it won’t take a traditional fee to manage the money. Bank of America said it would invest $1 billion to help communities address issues of racism, and Goldman Sachs pledged $10 million as an initial investment for its own fund.
FACEBOOK INTERNAL REVOLT: Hundreds of Facebook employees virtually “walked off” the job Monday in protest of the company’s decision to let controversial posts from President Trump stay on the platform. It was a rare show of dissent within the company, aimed exclusively at CEO Mark Zuckerberg, who has essentially all the decision-making power at Facebook. Despite the internal protests, Zuckerberg told staff in an all-hands meeting that he stood by his decision to leave the president’s most inflammatory posts up, doubling down on his position that Facebook should not be the “arbiter of truth.” He is increasingly alone amid his cohort: after Twitter appended a warning to some of President Trump’s tweets, Snap said it would stop promoting his account on its Discover page altogether.
MUSK ON TOP OF THE WORLD: Fresh off making history by becoming the first private company to launch humans into space, Elon Musk’s SpaceX sent another batch of StarLink communications satellites into low-Earth orbit via a reusable Falcon 9 rocket — a different rocket than the one that launched NASA astronauts Bob Behnken and Doug Hurley last weekend. That launch made history itself, with the Falcon 9 becoming the most-flown operational rocket in the U.S. with 85 flights now under its belt. Meanwhile, Bob and Doug, as they’re known, celebrated their safe arrival at the ISS by remotely ringing the opening bell of the Nasdaq from 250 miles above Earth.
IPO MARKET SIGNS OF LIFE: Warner Music made its return to the public market in a successful IPO that may signal a turning point after months of essentially zero activity in public offerings. Trading on the Nasdaq under the ticker $WMG, Warner shares priced at $25, near the high end, and jumped almost 20 percent on the stock’s first day of trading. The IPO came a day after the music industry orchestrated a virtual strike or “blackout” in support of the Black Lives Matter movement. Warner Music has a market capitalization of around $15 billion, compared to Spotify’s $34 billion. Warner, whose labels represent artists like Ed Sheeran, Cardi B, and Lizzo, relies on Spotify for its single biggest source of revenue.
