The Week's Top Stories is a guided tour through the biggest market stories of the week, from winning stocks to brutal dips to the facts and forecasts generating buzz on Wall Street.
RATE HIKE WORRIES
The Federal Reserve Open Market Committee is meeting next week, and that means many investors are wondering whether the central bank will hit markets with another rate hike. The Fed took a break from tightening at its last meeting on the heels of multiple reports showing a slowdown in inflation, but Fed Chair Jerome Powell noted that at least one more rate hike was on the horizon. Whether that happens next Wednesday or later this year is the question haunting markets going into the weekend.
TESLA CRASH
Shares of Tesla crashed more than 9 percent for the week after CEO Elon Musk disclosed that production is set to slow down this quarter due to "global factory upgrades." He said the target for the year is still 1.8 million vehicle deliveries, but could see a lull in the third quarter. The company also announced that it's recalling 16,000 of its Model S and Model X vehicles from 2021-2023. The recall is related to an issue with the first-row seat belt.
GAMING MERGER
The Federal Trade Commission is backing down from an appeal to a recent ruling giving Microsoft the go-ahead to complete its acquisition of Activision Blizzard. The two companies recently announced an extension of the deadline for finishing the merger to October 18, giving them more leeway to secure government approval. They can continue to negotiate with other countries' regulatory authorities, including the United Kingdom's Competition and Markets Authority.
BANKING PROFITS
Bank of America earlier this week reported a 19 percent jump in net income from a year ago, while revenue shot up 11 percent. CEO Brian Moynihan said the strong earnings were the result of a "healthy U.S. economy" and a "resilient job market." The results also indicate that the bank's size and diversity has helped it avoid the headwinds facing smaller regional banks, and that its still able to make money on loans even as it pays out more for deposits due to higher interest rates.
Updated Tesla stock drop after close of markets Friday.
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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.
