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.
COMPETING ECONOMIC DATA
U.S. stocks took a late tumble on Friday leaving indexes mixed, though the S&P 500 made a modest gain for the week. Much better-than-expected retail sales numbers for September showed that, despite the headwinds buffeting the economy, the consumer is spending. Excluding autos, retail sales jumped 1.5 percent against an expectation of 0.4 percent. The data seemed incongruous given that a day earlier, jobless claims rose by the most in two months, with another 898,000 Americans joining the unemployment rolls. It’s now quite apparent that a short burst in hiring over the summer has cooled significantly, coming as virus cases are approaching a third peak in the U.S. Nearly eight million Americans have slid into poverty since the start of the pandemic, according to a Columbia University study, which cited the expiration of enhanced unemployment benefits as part of the CARES Act. A new stimulus package remains D.O.A. ahead of the election.
The only negative sector in the September retail sales report: electronics and appliance stores. But that could change in October, as Apple prepares to ship out its first batch in three years of a new line of redesigned iPhones. Apple unveiled the new iPhone 12 lineup priced at $700 and up for the entry model and $1,000 and up for the high-end model — an unchanged pricing model from its most recent releases. The models have new screen technology, faster chips, and come with 5G capability. They’re also thinner, lighter, and smaller than the iPhone 11. Apple also dropped a new entry-level smaller HomePod smart speaker for $100. Preorders for the 12 and 12 Pro have started, with the 12 Mini and 12 Pro Max to follow in the coming weeks.
RACE TO A VACCINE HITS BUMPS
This was perhaps the week that the incredible speed and progress in the development of COVID-19 vaccines and treatments ran up against reality. Pfizer said the earliest it could apply for emergency approval of its vaccine candidate is the third week of November. That alone is not necessarily a setback, but comes as President Trump has been teasing that a vaccine would be available before Election Day. Meanwhile, Eli Lilly had to pause the phase-three trial of its promising monoclonal antibody treatment over potential safety concerns. Reuters reported that those concerns had to do with quality-control issues at a Lilly facility and had come down from the FDA. The pause came days after Johnson & Johnson announced it paused its massive vaccine trial after a patient came down with an unexplained illness. Pauses in phase-three trials are common and should not be construed as particularly detrimental to a particular drug’s efficacy, but the combination of the announcements amounted to more evidence that however fast these pharma and biotech companies are working, there is no magic bullet imminent.
HOLIDAY SHOPPING SEASON COMES EARLY
By one measure, the holiday shopping season has already started. After Amazon postponed its annual Prime Day over the summer as it dealt with an overloaded supply chain, the two-day sales event went live this week. More than one million items on Amazon were discounted, including surprise “lightning deals” for Prime members and special incentives for shoppers who spent with small-businesses on Amazon’s marketplace. Early market research from Edison Trends suggests sales were up 30 percent in the first 30 hours of the sales event, and Amazon has kept many sales going even after it ended. This year’s unusual Prime Day comes as other retailers prep for what’s going to be an unusual Black Friday. Walmart says it will spread out its Black Friday deals over three weekends in November in an attempt to limit crowds at its stores. The retailer is offering more doorbuster sales online and will introduce curbside pickup for the first time for Black Friday orders.
SOCIAL MEDIA THROTTLING
Part of an obscure law passed in 1996 that was intended to shield internet companies from liability for content posted on their platforms — long before the rise of social media — is once again back in the headlines. Section 230 is widely considered to have helped fuel the growth of services like Google’s YouTube, Twitter and Facebook, giving them broad control over what users do on their platforms. But there are increasing calls from both sides of the aisle to revise Section 230 — part of a larger crackdown on Big Tech — in order to make companies accountable for letting hate speech and misinformation spread unchecked. President Trump is among the fiercest critics of the law, which might sound counterintuitive since he is often responsible for spreading such misinformation via his own accounts. The debate came into stark relief this week when Facebook and Twitter took action to suppress the spread of a disputed New York Post article that made claims about Joe Biden and his son’s business dealings in Ukraine. Facebook said it slowed the spread of the article until it was fact-checked, while Twitter blocked users from posting it, pointing to a policy on spreading hacked material — leading to an explosive outcry among conservatives. The company then reversed course on that policy, acknowledging that it was too broad and could make it harder for journalists to do their jobs and whistleblowers to come forward.