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.
HONG KONG RATTLES MARKETS
Stocks ended the week lower, snapping a record-setting run in an abbreviated week of thin trading. Better-than-expected economic data, from durable goods orders to weekly jobless claims to GDP revisions, all helped fuel the pre-Thanksgiving gains. Those data points were replaced, post-holiday, by fresh trade concerns, which deepened after President Trump signed a bill Wednesday in support of pro-democracy protesters in Hong Kong. That legislation, which among things authorized sanctions on Chinese officials involved in human rights abuses in Hong Kong, infuriated Beijing. The Chinese government said the bill "seriously interfered with Hong Kong affairs, seriously interfered with China’s internal affairs, and seriously violated international law and basic norms of international relations.” It remains unclear whether the bill, largely symbolic, will interfere with the trade negotiations between the world's two biggest economies. Despite the jitters, the S&P 500 finished its best month since June.
TRILLION-DOLLAR HOLIDAY?
Retailers are hoping for a huge Black Friday/Cyber Monday showing, but for many the shopping extravaganza began earlier than ever. This was the first Thanksgiving ever to surpass $4 billion in online sales, with nearly half coming from mobile devices, according to data from Adobe Analytics. Total online sales are projected to reach $144 billion for the full season. Despite economic concerns related to the ongoing trade war, unemployment is near record lows, consumer confidence is high, and people are opening their wallets. The analytics firm eMarketer is estimating this could be the first-ever $1 trillion holiday shopping season when all is said and done.
BUZZKILL
A bad year for cannabis stocks got worse, with the FDA's release of its first-ever warning about the health risks of the hugely popular CBD cannabis component. CBD was taken off a list of banned substances last year and has grown to become a pillar of the fledgling U.S. cannabis industry, with claims that it can help anxiety, inflammation and insomnia, without the psychotropic effects of THC. But federal regulators pumped the brakes on those claims, saying CBD has the potential to cause liver damage, changes in mood and gastrointestinal problems. Investors are worried the report could signal the FDA plans a crackdown on the CBD market, and the report sent shares of publicly-traded cannabis firms like Tilray, Aurora and Cronos lower. Some of those stocks recovered later in the week on expectations that they will see a boost from increased holiday spending.
MERGER MANIA
Two huge, industry-shaking mergers were announced at the start of the shortened week. The country’s two largest discount brokerages made it official, with, Charles Schwab shelling out $26 billion in an all-stock deal to acquire TD Ameritrade. The retail brokerage industry has been shaken up, with upstarts like Robinhood taking market share from established firms, leading Schwab, Ameritrade and others to cut, or do away entirely, with commission-based trades. Meanwhile, in retail, LVMH, the European luxury giant behind fashion brands like Louis Vuitton and Fendi, is buying Tiffany in a $16 billion acquisition. The iconic jeweler has been suffering from weak sales in the U.S. and is betting on an expansion in China to fuel growth. LVMH is credited with becoming one of the most valuable companies in Europe due, in large part, to the success of its brands in the Chinese market.
SLOW GOING FOR BOEING
The chances of the 737 Max getting the stamp of approval from the FAA before the end of the year is getting smaller by the day. The smart money is now betting that it will be January, at the earliest, before the Max is re-certified to fly. Regulators are reportedly planning to inspect every single new 737 Max and, even then, it would take several more weeks for airlines to get their Max fleets back into service. Adding to the concerns for Boeing: Congress is said to be planning another hearing for December in which FAA officials would testify about the safety procedures involved in certifying the Max before the two crashes that killed nearly 350 people. Boeing, ending a year in the midst of its biggest corporate crisis ever, has seen its shares lose 15 percent of their value since March, when the second crash led to the worldwide grounding of the Max jet.
The White House is earmarking $2.1 billion to help secure the nation's food supply, amid widespread shortages due to the pandemic, Russia's war in Ukraine, and rising inflation. The Biden administration's plans are expected to shore up food infrastructure and distribution while also aiding farmers. Bread for the World Senior International Policy Advisor Abiola Afolayan joined Cheddar News' Closing Bell to discuss.
Concerns about economic growth are weighing down sentiment on Wall Street, as investors also monitor the uncertain impact of the Federal Reserve's quantitative tightening - the process of reducing its $9 trillion balance sheet it built up over the course of the pandemic. The Fed's QT is meant to normalize monetary policy while bringing down inflation, something the White House calls a 'top economic priority.' As Americans cope with higher prices for everyday essentials, Treasury Secretary Janet Yellen admitted that she was wrong about inflation being 'transitory,' as extenuating factors have caused inflation from the pandemic to worsen. JPMorgan CEO Jamie Dimon also weighed in on inflation and the state of the economy, warning investors to brace for a so-called economic 'hurricane' due to impacts from inflation and Russia's war in Ukraine. The still-tight job market is putting pressure on the economy as well, as the latest JOLTS report shows job openings in the U.S. are down from record highs but remain high.
President Biden and Federal Reserve chair Jerome Powell meet at the White House today for the first time since Powell's renomination to the position. The President and the Fed Chair discussed the economy and historically high inflation, as new data shows inflation may be cooling slightly. Morning Consult economic analyst Jesse Wheeler joins Cheddar News' Closing Bell to discuss how the Biden administration at the U.S. central bank can work together to combat soaring prices for American consumers.
Gene Goldman, Chief Investment Officer at Cetera, joins Cheddar News' Closing Bell, where he breaks down the reasons behind Thursday's bounce-back performance on Wall Street. Goldman also provides a dose of investing advice, highlighting the sectors he's favoring right now.
David Scranton, CEO and Founder of Sound Income Strategies, joins Cheddar News' Closing Bell, where he provides his insight into why markets ended Wednesday's session lower and hones in on what he's looking for when it comes to the Fed combating inflation.
ADP's Chief Economist Nela Richardson joins Cheddar News' Closing Bell for a look at the job market in the United States. She breaks down the numbers behind her firm's latest findings and says her biggest concern lies in the continuing loss of jobs at small businesses, which shed 91,000 jobs during the month of May.
Tech-enabled residential hospitality company Mint House recently raised $35 million in a Series B round led by Mohari Hospitality. Mint House was described by one of its backers as 'the best of a hotel without the worst of a hotel, and the best of an Airbnb without the worst of an Airbnb.' Mint House offers apartment-style lodging across the country. The company claims its spaces combine the comfort of a home with the luxury of a hotel in order to give guests all of the perks and none of the tradeoffs. Will Lucas, Founder and CEO of Mint House, joins Cheddar News' Closing Bell to discuss.
As the broader tech sector faces continued headwinds, Microsoft in particular is slashing its fourth quarter outlook for another reason: the strength of the dollar. Why is it that a strong dollar is negatively impacting tech giants? And what should investors keep in mind? Tim Lesko, director and senior wealth advisor at Mariner Wealth Advisors, joins Closing Bell to discuss.
Social media platforms walk a fine line when it comes to free speech, especially when posts lead to real-life negative consequences. Texas lawmakers are trying to enforce a law that would prohibit platforms from taking any action when it comes to malicious or violent posts, and they insist it does not violate the First Amendment. But the Supreme Court thinks otherwise, at least for now. Matt Schruers, President of the Computer & Communications Industry Association, joins Closing Bell to discuss what threat the Texas law poses to social platforms, why his organization sued over the law, what it could mean for users, and more.
Fintech company Acrisure recently raised $725 million in a new funding led by a wholly-owned subsidiary of the Abu Dhabi Investment Authority, bringing the company's valuation to $23 billion. Acrisure offers financial solutions including insurance, reinsurance, real estate services, cyber services, and asset management. The company says its financial solutions are powered by the best of human and artificial intelligence. Greg Williams, co-founder, CEO and President of Acrisure, joins Cheddar News' Closing Bell to discuss.
