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.
TESLA IS ON A ROLL
Pointing out that Tesla had a good week on Wall Street is a bit like saying the Yankees are doing great (though not so much lately). All the same, it's undeniable that the electric vehicle-maker had a landmark week, and investors were rewarded in kind. The stock extended its longest winning streak in more than a year, pushing the price over $1,000 per share for the second time in two months. These gains followed news that Tesla's gigafactory was officially open for business outside Berlin, Germany, and Hertz added the Model Y to its EV fleet.
NIKE ON FIRM FOOTING
Nike's quarterly earnings report this week was eagerly anticipated, as investors had their eyes peeled for hints of what might be coming down the pike in terms of global supply chain issues and the shoemaker didn't disappoint. The company reported strong sales and signaled that its pandemic-related supply chain issues were behind it. Investors also took heart in Nike's ongoing pivot away from wholesalers to direct-to-consumer sales, even as CEO John Donahoe noted during the earnings call that Foot Locker remains a “large and important partner."
BEYOND BED, BATH & BEYOND
Bed Bath & Beyond shares popped Friday after the company struck a deal with activist investor and GameStop board chair Ryan Cohen to add three new directors and explore a spin-off or sale of its buybuy BABY business. Cohen, whose RC Ventures owns a 9.8 percent stake in Bed Bath & Beyond, has publicly criticized the company's turnaround strategy and called for a shake-up. While the retailer initially demurred, Cohen's stake bolstered the stock.
INSTACART EATS HUMBLE PIE
Meanwhile, in the private markets, Instacart has taken the unusual step of cutting its valuation by almost 40 percent to $24 billion. The grocery delivery start-up saw its market cap balloon during the pandemic but is now bracing for turbulence as both public and private tech firms take a beating amid uncertainty around the war in Ukraine and Federal Reserve rate hikes. The company has also faced pushback from grocery stores that say the app cuts into their profits.
THE POWELL RATCHET
Speaking of the Federal Reserve, Chair Jerome Powell gave markets a tune-up earlier this week when he hinted in a speech that the central bank could pick up the pace of rate hikes if that proved necessary to curb inflation. He also stressed that inflation expectations are well ahead of what the Fed initially expected and that rate hikes could come with an economic downturn. Powell's more hawkish comments marked a shift in tone from his speech last week following the announcement of the Fed's first rate hike since 2018. Some say this is an example of the "Powell ratchet," a one-two punch of good news and bad news from the world's top banker.
HEARD ON WALL STREET
Citigroup had an even more hawkish message than Powell this week, with a new forecast predicting four straight half-point hikes this year, bringing the Fed Funds Rate to 2.75 percent. That's quite a jump after two-plus years of near-zero rates and adds even more suspense to the coming Fed meetings. Blackrock CEO Larry Fink, meanwhile, had the most galaxy-brained take of the week, arguing that the war in Ukraine marked the end of globalization. Here's Fink in his latest letter to shareholders:
"Russia’s aggression in Ukraine and its subsequent decoupling from the global economy is going to prompt companies and governments worldwide to re-evaluate their dependencies and re-analyze their manufacturing and assembly footprints — something that Covid had already spurred many to start doing."
