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.
BIDEN'S BIG BILLS
After what felt like an eternity of congressional wrangling, the Biden administration on Monday squeezed through a $1 trillion infrastructure package, which is set to ripple through markets for years to come. But while the president did a victory lap to promote the package, lawmakers moved on to the next big legislative battle: the budget. House Democrats on Friday corralled a slim majority to pass a $2 trillion spending package, with funds for climate measures, universal pre-kindergarten, and other social measures. The big win didn't move markets much because the fight isn't over yet. Now it heads to the Senate, where Democrats expect a tougher fight. All of this will play out against the backdrop of higher inflation, which is increasingly becoming a political football on Capitol Hill in debates over government spending.
BETTING ON THE METAVERSE
It feels like just yesterday that many of us heard the word "metaverse" for the first time. Now it's moving markets. In its latest earnings report, graphics card-maker Nvidia forecast higher-than-expected revenues for the coming quarter, in hopes that its data center business will see a boom as more companies invest in the metaverse and artificial intelligence. In a sign that Nvidia may be right on the mark, Roblox, the online gaming platform, announced that it was partnering with sports giant Nike to create its own virtual world. Called Nikeland, the space will feature digital showrooms, online events, games, and other extensions of the brand. Roblox also announced a new educational venture and its stock soared this week, ending up 24 percent. Nvidia investors were also glad to see that their stock jumped almost 8 percent.
Supply chain constraints abound, but big-name, big-box retailers are taking them in stride. Pick your favorite retail brand — Macy's, Target, Walmart, Home Depot — all of them turned in strong Q3 earnings this week, raising hopes for the holiday shopping season. That was great for Macy's and Home Depot, ending the week up 12 percent and 9 percent, respectively. Not everyone was celebrating, however. Shares of Walmart and Target slipped, both ending the week down around 4 percent, as investors clashed with the retailers over their efforts to keep prices low amid widespread supply chain-related inflation, rather than passing those costs onto customers and potentially driving up revenues.
NO MORE STOCKS, PLEASE
Morgan Stanley had some sobering advice for those caught up in the stock market euphoria this week: Resist buying U.S. stocks and Treasurys. While corporate earnings have been strong amid the pandemic recovery, the investment bank warned that 2022 will bring "hotter, faster" cycle advances, with inflation, high valuations, and tightening Fed policy all bringing uncertainty.
Goldman Sachs and JPMorgan, meanwhile, were somewhat more bullish in their forecasts, predicting that easing supply chain constraints and continued high earnings will drive the S&P 500 to record highs next year.
It turns out IPO success stories aren't limited to tech companies and electric vehicle startups. Salad chains are getting in the mix as well. Sweetgreen saw its shares rise 77 percent in its market debut on Thursday, even as it reported a drop in restaurant-level profit margins and net losses overall amid the pandemic. Apparently, investors still like the business model, which is known for its assembly line-style restaurants. The company plans to use the new funds to build more stores, particularly in the suburbs, where the brand currently has less of a presence. Initial stock pricing was $28. It wrapped up the week at $53 per share.