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.
MARKETS RECOVER
As news spread of Russia's invasion of Ukraine on Thursday, the markets, which had already been flagging, took a steep plunge. Despite the grim news coming out of Kyiv, however, stocks began to recover through the day, rising higher after President Joe Biden's announcement of new sanctions being imposed on Russia. On Friday, the Dow and the S&P rose more than 2 percent with the Nasdaq jumping more than 1.3 percent. While the markets were down overall for the week, things appeared calmer with oil prices dropping and Treasury Yields held steady.
MACY'S STAYS TOGETHER
Macy's stock got a bump this week from a strong earnings report that showed higher than expected revenue and same-store sales. It also rejected a proposal from an activist investor to spin-off its e-commerce business, after reporting that digital sales rose 12 percent year over year and that e-commerce represented 39 percent of net sales. The announcement marks a potential seachange for retailers, which have faced pressure from investors to follow the lead of Saks Fifth Avenue and separate their online business. The case for this kind of spin-off has gotten weaker as shoppers return to stores in force and e-commerce companies shell out more and more to retain customers.
SLOWER GROWTH FOR HOME DEPOT
A brick-and-mortar retailer that didn't have such a good week was Home Depot. The home improvement store saw booming sales during the pandemic, but now it's projecting slower growth in 2022, as the do-it-yourself craze of those early lockdown months subsides with the reopening of the economy. Inflation in several product categories, including super-expensive lumber, is also putting pressure on the company. Even as it beat Wall Street estimates, the stock tumbled nearly 10 percent amid an overall drop in the Dow Jones on Tuesday.
MATTEL RALLIES
Shares of Mattel, the maker of Hot Wheels and Barbie, rallied this week as the company reported strong Q4 earnings and announced that its turnaround was complete. Analysts upgraded the stock in a sign of faith for the toymaker's future plans, which include expanding into video games and NFTs. CEO Ynon Kreiz also pointed to plans to make Mattel an entertainment empire on par with Marvel. The company already has several films and TV shows in production, including a Barbie film set to come out later this year. Mattel's stock was up more than 1.5 percent for the week.
COINBASE COOLS
Coinbase, the second-largest cryptocurrency exchange in the world, posted sizable revenue and earnings beats on Thursday, but shares dropped as the crypto market got hammered along with the rest of the stock market, undermining the narrative that assets such as Bitcoin can serve as a safe-haven asset in times of crisis. The company noted that it expects transaction volume on the platform to fall in the first quarter of the year. However, CEO Brian Armstrong pushed back on the idea that the market was headed for a "crypto winter." Coinbase shares were down almost 7.5 percent on the week.
FOOT LOCKER FLAGS
Foot Locker's stock had its biggest drop in 13 years on Friday following an earnings report highlighting that Nike was cutting back on its business with the retail chain. As its biggest supplier, Nike pulling back is expected to have major consequences for the chain. Foot Locker is projecting lower profits and comparable sales in the coming year due to the loss. What's behind the slow break-up between the two shoe giants? Nike is increasingly relying on direct-to-consumer sales. It was enough to knock nearly 30 percent off of the company's stock price.
