Federal Reserve Chair Jerome Powell testified before Congress earlier this week and once again repeated the message that more rate hikes are likely if inflation continues. He also stressed that the current labor market is too hot, and even got into a back-and-forth with Sen. Elizabeth Warren (D-Mass.) about the need to increase unemployment. The testimony confirmed investors' suspicions that the Fed wasn't done with tightening, and markets were rattled accordingly. The jobs report released on Friday only reinforced this narrative, as it showed the U.S. economy adding 311,000 jobs in February, which is 100,000 more than the consensus estimate. In other words, it's becoming even more clear that the Fed won't be changing course anytime soon.
BANKING TROUBLES
Shares of Silicon Valley Bank, a major lender in the nation's biggest tech hub, plunged toward the end of the week after the banker said it needed to raise $2.25 billion in stock to remain solvent. Then the bank announced it was trying to sell itself, adding momentum to the sell-off. Fears that Silicon Valley Bank's troubles would spread to the rest of the banking sector put downward pressure on markets Friday, but stocks rebounded later in the morning, with investors betting that the problems were contained. Trading of the stock was halted early Friday, and the Federal Deposit Insurance Corporation shut down the bank and seized its assets.
CRYPTO WOES
The price of Bitcoin sank more than 10 percent to below $20,000, with second-largest cryptocurrency ether falling by a similar amount. The sell-off followed the announcement from crypto bank Silvergate Capital was winding down operations due to liquidity issues. The crypto sector overall suffered hundreds of millions in liquidations this week, with this latest bankruptcy adding to a growing consensus that the crypto market is in shambles.
WEIGHTWATCHERS GAINS
WeightWatchers' stock soared more than 70 percent Tuesday following reports that it was planning to buy Sequence, a telehealth company that helps treat obesity. The company has struggled over the past year to transition away from weight loss and embrace other aspects of wellness and nutrition. CEO Sima Sistani took over in February, and the acquisition is one of the company's first big plays under new leadership. The purchase also comes amid heightened buzz around weight loss drugs such as Ozempic.
Wealthfront’s CFO Alan Iberman talks the $2.05B IPO and the major moment for robo banking as the company bets on AI, automation, and “self-driving money."
A rare magnum of Dom Pérignon Vintage 1961 champagne that was specially produced for the 1981 wedding of Prince Charles and Lady Diana has failed to sell during an auction. Danish auction house Bruun Rasmussen handled the bidding Thursday. The auction's house website lists the bottle as not sold. It was expected to fetch up to around $93,000. It is one of 12 bottles made to celebrate the royal wedding. Little was revealed about the seller. The auction house says the bids did not receive the desired minimum price.
The New York Times and President Donald Trump are fighting again. The news outlet said Wednesday it won't be deterred by Trump's “false and inflammatory language” from writing about the 79-year-old president's health. The Times has done a handful of stories on that topic recently, including an opinion column that said Trump is “starting to give President Joe Biden vibes.” In a Truth Social post, Trump said it might be treasonous for outlets like the Times to do “FAKE” reports about his health and "we should do something about it.” The Republican president already has a pending lawsuit against the newspaper for its past reports on his finances.
OpenAI has appointed Slack CEO Denise Dresser as its first chief of revenue. Dresser will oversee global revenue strategy and help businesses integrate AI into daily operations. OpenAI CEO Sam Altman recently emphasized improving ChatGPT, which now has over 800 million weekly users. Despite its success, OpenAI faces competition from companies like Google and concerns about profitability. The company earns money from premium ChatGPT subscriptions but hasn't ventured into advertising. Altman had recently announced delays in developing new products like AI agents and a personal assistant.
President Donald Trump says he will allow Nvidia to sell its H200 computer chip used in the development of artificial intelligence to “approved customers” in China. Trump said Monday on his social media site that he had informed China’s leader Xi Jinping and “President Xi responded positively!” There had been concerns about allowing advanced computer chips into China as it could help them to compete against the U.S. in building out AI capabilities. But there has also been a desire to develop the AI ecosystem with American companies such as chipmaker Nvidia.
