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.
Markets had a lot to digest this week. President Joe Biden signed the Inflation Reduction Act. The National Home Builders Association said the housing market was in a recession. New data showed retail sales were flat in July, and a slew of earnings reports from major companies gave off mixed messages about the economy. Overall, markets finished out the week down, ending a four-week winning streak for the S&P 500. The fall came after a week of steady gains and a mishmash of winners and losers across sectors. One signal putting downward pressure on markets was the release of the minutes from the Fed’s July meeting, which made it clear that the central bank is set on raising interest rates until inflation is closer to its target range of 2 percent.
BED BATH & BOUNCE
Bed Bath & Beyond's brief dalliance with meme stock glory appears to be coming to an end. Shares of the home goods retailer tumbled 20 percent Thursday after an SEC filing revealed that activist shareholder Ryan Cohen's RC Ventures was selling its stake. The stock had rallied 400 percent from its July low, popping as much as 70 percent just this week — in large part because retail investors took a shine to the company after Cohen bought a stake back in March. Cohen, chair of GameStop's board, is a favorite of the r/wallstreetbets Reddit channel, and many retail investors were banking on him leading a turnaround. Now that he's out of the picture, in their view, Bed Bath & Beyond is just a struggling retailer with some serious liquidity issues.
The biggest retailers in the U.S. released their quarterly earnings this week, and as much as economists and market-watchers were hoping for some clear signals about what this meant for the broader economy, they were left wanting. Walmart was up after beating Wall Street estimates. Target was down after a miss, and Home Depot was up on higher-than-expected sales, given the beleaguered housing market. Both Walmart and Target said they were still working through their inventory glut, but Walmart appears in a better position to take advantage of consumers seeking discounts. Both also said the hard part was over in terms of marking down products to clear out excess inventory, and that it would get better in the coming quarters. Kohl's, meanwhile, slashed its forecast for the year due to falling demand from middle-income customers, and Bath and Body Works slipped following a weaker than expected quarter sales-wise and a dim outlook for the rest of the year.
CHIPS ACT BOOST
One clear winner this week was the little-known U.S.-based semiconductor firm, Wolfspeed. Shares of the company popped more than 20 percent after it released an earnings report forecasting higher-than-expected earnings for the current quarter. Why the bullishness? Wolfspeed is set to benefit from the CHIPS Act, a major piece of legislation designed to bolster domestic semiconductor production. The company said during its recent earnings call that it's planning an expansion on U.S. soil.
ADAM NEUMANN IS BACK
The biggest story in the private markets this week featured a familiar face: Adam Neumann, the controversial former CEO of WeWork. Apparently, despite his well-known history of mismanagement, venture capital firm Andreessen Horowitz still sees a bright future for the wayward entrepreneur. The firm invested $350 million in Neumann's new project, called Flow, which ostensibly will transform the rental housing market (though that's about all we know at this point). While some found the news shocking, look at the upside: maybe we'll get another Hulu show out of it.