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.
Orangetheory Fitness is redefining the future of workouts with smarter tech, strength-based programming, and community-driven studios built for what’s next.
Spain's government has fined Airbnb 64 million euros or $75 million for advertising unlicensed tourist rentals. The consumer rights ministry announced the fine on Monday. The ministry stated that many listings lacked proper license numbers or included incorrect information. The move is part of Spain's ongoing efforts to regulate short-term rental companies amid a housing affordability crisis especially in popular urban areas. The ministry ordered Airbnb in May to remove around 65,000 listings for similar violations. The government's consumer rights minister emphasized the impact on families struggling with housing. Airbnb said it plans to challenge the fine in court.
Roomba maker iRobot has filed for Chapter 11 bankruptcy protection, but says that it doesn’t expect any disruptions to devices as the more than 30-year-old company is taken private under a restructuring process. iRobot said that it is being acquired by Picea through a court-supervised process. Picea is the company's primary contract manufacturer. The Bedford, Massachusetts-based anticipates completing the prepackaged chapter 11 process by February.
Serbia’s prosecutor for organized crime has charged a government minister and three others with abuse of position and falsifying of documents related to a luxury real estate project linked to U.S. President Donald Trump’s son-in-law Jared Kushner. The charges came on Monday. The investigation centers on a controversy over a a bombed-out military complex in central Belgrade that was a protected cultural heritage zone but that is facing redevelopment as a luxury compound by a company linked to Kushner. The $500 million proposal to build a high-rise hotel, offices and shops at the site has met fierce opposition from experts at home and abroad. Selakovic and others allegedly illegally lifted the protection status for the site by falsifying documentation.
