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.
HOU$E OF MOU$E
Stocks ended the week on a slight up note, though the S&P 500 and Dow Jones finished up 0.68 percent and 0.81 percent respectively. While concerns piled up in terms of the COVID-19 delta variant and a major drop in consumer sentiment, it didn't dampen the celebration at Disney. The House of the Mouse reported a big turnaround in its parks and products, posting revenues of $4.3 billion compared to $1.1 billion a year ago, showing, at least for the massive entertainment conglomerate, that reopening amid the pandemic is going well so far. Disney also reported a doubling of its Disney+ subscriptions to 116 million customers and big earnings beats overall. The stock responded after the closing bell on Thursday and ended up 2.3 percent for the week.
AMC TRAIN KEEPS CHUGGING
Months after the height of the meme-stock craze, AMC Entertainment is still making headlines. CEO Adam Aron set an optimistic tone during an earnings call earlier this week, predicting the company could reach a positive cash flow at the theater level by the fourth quarter. He also talked up the company's plan to use its newly acquired liquidity to open new theaters and make improvements at existing locations, including the ability to accept bitcoin. AMC also struck a deal with Warner Brothers for an exclusive 45-day theatrical window for releases in 2022. The theater chain's stock was up more than 2 percent on the week.
Consumer sentiment, Treasury yields, and inflation all went in the same direction this week: down, down, down. The University of Michigan’s preliminary consumer sentiment index fell to its lowest level since 2011, as the Delta variant spread doubt about the strength of the U.S. recovery. A similar sentiment dragged down Treasury yields as investors piled into the safe-have asset amid mixed economic signals. In the meantime, the Great Inflation Debate continues, with a tentative win for #teamtransitory. The latest consumer price index data showed a slowing of inflationary pressures, even as year-over-year gains remain elevated at 5.4 percent. At the same time, the producer price index showed a 7.4 percent annual jump in wholesale prices, stoking the fears of inflation-adverse economists and market-watchers.
INFRASTRUCTURE DOUBLE BILL
It truly was infrastructure week on Capitol Hill as the $1 trillion bipartisan bill passed with significant help from GOP senators including Minority Leader Mitch McConnell, a rarity in DC politics of late. However, the big win for Biden was tempered by the Democrats' separate proposal for a $3.5 trillion budget proposal that would cover the president's agenda left out of the bipartisan package. Despite the reconciliation process not requiring the Republicans, the problem became an intra-party issue between centrist House Dems who want to pass the bipartisan bill before signing onto the reconciliation bill and the progressive wing who are seeking to pass the budget bill first. Regardless, stocks largely reacted more to other financial news during the week, except maybe those industries that would directly benefit from a massive federal spending package on infrastructure.
Crypto-exchange giant Coinbase turned in higher than expected revenue in its second-quarter earnings report this week, driving its stock price up 2 percent on Tuesday. As one of the industry's biggest players notched a win though, the broader crypto community suffered a legislative setback that could change who has to report to the IRS. A controversial provision that would impose tax-reporting requirements on a broad cross-section of digital asset holders made it into the Senate infrastructure bill despite wide support for an amendment that would have narrowed the scope of the rules. Meanwhile, in Miami, a municipal cryptocurrency called MiamiCoin has already netted the Florida city $1 million in revenue through mining activity.