Big Business This Week 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.
It was the moment we had all been waiting for…well at least for 12 lucky people. Tesla rolled out its first delivery of the Cybertruck, billed as the future of all-electric trucks. The first vehicles to roll off the line comes 2 years later than expected and there are still questions on how to scale up production to hit the goal of 250,000 Cybertrucks per year, to start chipping away at the million vehicles on the wait list. CEO Elon Musk noted the company has had difficulty producing the stainless steel body parts. In the four years since Musk introduced the Cybertruck, major automakers have followed releasing their own electric trucks, so competition has become much more fierce. Tesla stock dipped nearly 2% on the news Thursday, but eeked into positive territory by the end of the week.
The bills are coming due for that extended auto workers strike. This week, GM announced the work stoppage cost the company $1.1 billion due to production delays. It costs Ford even more: $1.7 billion in profits. Also, there are the costs associated with the historic wins by the labor union. Automakers say those costs will get passed on to consumers. Ford says it will add about $900 to the price of vehicles by 2028. GM says its costs will add $500 per vehicle next year and $575 by the end of the contracts. However, industry experts say competition may prevent the price tags from going up so much.
OPEC+ met this week to do something about falling crude prices. It's been good news for U.S. drivers, who are shelling out an average of $3.25 per gallon this week. It's more than what we were paying when President Joe Biden took office, but a lot less than record highs hit in June 2022, according to AAA. The current crude prices won't support OPEC+ countries' budget goals, though. Russia needs more cash to support its war in Ukraine and Saudi Arabia needs more for plans and projects. The result of this week's meetings means additional production cuts to try to drive up prices in 2024 and welcoming Brazil into its fold, a country that has been breaking into the oil industry.
Arena Group, the parent company of Sports Illustrated, took a hit this week when it was discovered that the storied sports media brand had been publishing stories under bylines of writers who don't exist. The brand says it has ended its deal with AdVon Commerce, the company producing the articles, and contends the stories were not written by AI. However, a source told Futurism, the publication that broke the news, that is not true. Arena Group's stock dropped on the report and ended the week down 11 percent, another hit in a year that has seen a 75 percent drop in value.
There was good news for investors this week with just one month to go in 2023. The Dow Jones Industrial Average is the highest we've seen all year, the S&P 500 is up more than 19 percent and the NASDAQ is up 36 percent. Investors are feeling optimistic that interest rate hikes are a thing of the past and some are even predicting we might start seeing rate cuts mid-year. Reports released this week seemed to support the idea the U.S. economy could see a "soft landing" post-pandemic: inflation measures are cooling and construction spending is up more than expected. Additional reports next week will hopefully buoy these reports so we can ring in the new year with a strong start.