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.
WHERE THE JOBS ARE
U.S. stocks went for a rollercoaster ride, plunging and rising after a blowout February jobs report gave hope that the economic recovery is about to pick up steam as vaccinations increase and more states ease restrictions. The labor market added 379,000 payrolls for the month on estimates of 210,000 new jobs. The unemployment rate fell to 6.2 percent. Almost all those gains came from hospitality or hospitality-adjacent industries. Analysts believe it’s a preview of an explosion in service jobs in the coming months as the weather warms and the pandemic — hopefully — continues to recede. Nevertheless, markets overall have been wavering of late. Part of it is that the coming boom has been priced in; part of it is growing concerns, led by rising bond yields, that inflation is about to become a problem; part of it is rising oil prices that could hamper the global recovery. But all of those factors are signs in and of themselves that economic growth is about to take off like a rocket ship, assuming the world may finally be in the last innings of the worst parts of the pandemic.
The Nasdaq is now only up slightly for the year, with the recent sell-off in tech accelerating for much of the back half of the week before rebounding on Friday. Large-cap technology stocks had been hit hard of late, not on any specific news, but more due to a rotation out of the high-flying sector and into sectors that have been beaten down over the last year and which investors believe are poised to benefit from reopenings. (Also, those rising Treasury yields are giving investors a reason to get out of growth stocks.) Tesla was down nearly 5 percent on Thursday. A day earlier, Zoom and Peloton were both down 8 percent apiece. Even Apple’s off some 15 percent from its January all-time high.
This was a good week to be a ViacomCBS executive — or shareholder for that matter. The media conglomerate is sucking up oxygen (and headlines) with its network primetime special on Sunday that will feature Oprah Winfrey interviewing Prince Harry and Meghan Markle, which comes days after the company successfully launched Paramount+, a reimagined version of its old streaming platform, CBS All Access. Viacom told investors it already has 30 million paying streaming subscribers, but will aggressively market Paramount+ and its extensive content library to win even more. Investors have been rewarding Viacom for its better-late-than-never focus on streaming: the stock hit an all-time high on the day it launched Paramount+ after climbing 33 percent in February on earnings and the belief that it could become a serious player in the streaming wars.
REDDIT TARGETS ROCKET
Rocket Mortgage, the parent company of Quicken Loans, soared 71 percent on Tuesday in a Reddit-fueled rally. Daytraders appeared to take an interest because of Rocket’s float — nearly 40 percent of which is sold short. But unlike past Reddit trades, Rocket Mortgage makes money. Lots of money. The company reported $9 billion in profits for 2020 thanks to the surge in refi activity during the pandemic, sparked by rock-bottom interest rates. Still, the stock has been stuck in the mid-$20 range for the last few months and ended the week more or less where it started after the midweek Reddit bump.
Shares of Virgin Galactic tumbled on the news that the company’s billionaire chairman, Chamath Palihapitiya, sold his entire remaining stake. Palihapitiya sold about 6.2 million Virgin Galactic shares for somewhere in the neighborhood of $210 million, though still owns another 16 or so million shares indirectly through the SPAC that he used to take the company public in 2019. Virgin Galactic has lost more than half its market value since it hit an all-time high of $63 last month. Meanwhile, rival SpaceX, which is privately owned, conducted a new test launch of its Starship rocket that was considered a success — even though the test ended in the rocket exploding into a giant fireball. Elon Musk’s reusable rocket prototype managed to stick the landing for the first time before it went out in a blaze of glory.