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.
MARKET ROLLER COASTER Stocks got off to a bad start this month, but then rebounded after Friday's jobs report showed steady growth, despite a series of economic headwinds. The Dow lost over 800 points across two sessions mid-week, mostly due to a manufacturing reading that came in below expectations, leading to fresh worries that the trade war was now causing real impact to at least one critical sector of the economy. But a September jobs report that showed 136,000 new jobs ー below estimates, but still solid ー helped markets pare their losses. The unemployment rate dipped to 3.5 percent, a 50-year low, though wage growth remains stubborn. Average hourly wages grew at just 2.9 percent in past twelve months.
PUMPING THE BRAKES Auto stocks hit the skids this week after disappointing news from Detroit's Big 3. Ford sales slumped 4.9 percent year since last September while Fiat Chrysler sales held flat. GM saw an uptick of 6.3 percent, but it's unionized workforce is now in its third week of its strike, with a deal remaining elusive after the UAW rejected management's most recent offer. Tesla set a quarterly delivery record ー about 97,000 vehicles ー but that wasn't enough for investors, who were expecting 100,000 deliveries. While Tesla has now delivered more cars so far in 2019 than it did in all of 2018, it is still a ways from the aggressive predictions Elon Musk has made.
WAR ON FEES Some of the biggest online brokerages have now all gone fee-free. In the span of this week, Charles Schwab, E-Trade and Ameritrade all did away with the customary retail commissions for stock and ETF trading on their platforms. All three brokerages saw their stock prices fall following the moves, though it was widely expected given the popularity of new fintech trading apps like Robinhood, which launched without fees. Robinhood has ridden its no-fee model to a staggering $7.6 billion valuation (it makes money on a premium product that allows for more advanced trading). Schwab, E*Trade, and Ameritrade shares are all down double digit percentages since Schwab made the first announcement.
VAPE PANIC As the toll of the mysterious illness linked to vaping rises, with more than 1,000 cases now reported across 48 states, the CDC intensified its warnings about e-cigarettes. Researchers at the Mayo Clinic now say the the illness resembles exposure to toxic chemicals or mustard gas. Meanwhile, Juul got a temporary reprieve in New York, where a judge blocked the state's ban on flavored e-cigarette products for at least a week. A hedge fund that made more than half its returns on its Juul investment last year has written down that stake by a third, now valuing Juul at $24 billion. While it looks like more evidence that Altria's decision last year to take a 35 percent stake in Juul may go down as some of the worst timing ever, the company has the good timing of releasing its iQOS smoking alternative this weekend. The new device heats, but doesn't burn, tobacco and has the distinction of having received FDA authorization, unlike Juul or other vape products.
WEWORK THROWS IN THE TOWEL The WeWork IPO has gone from imminent, to delayed, to now indefinitely on hold. The coworking startup that had, until recently, been valued as high as $47 billion has shelved its plans to go public while it attempts to restructure. There are reports the WeWork has told staff to expect widespread job cuts in the coming weeks. The new co-CEOs have also put the company's $60 million private jet up for sale and have reportedly frozen any new leasing deals. The utter debacle of the IPO has led to fresh questions about SoftBank's role in the hype. The Japanese conglomerate is, by far, WeWork's largest backer and now has the distinction of investing in the two biggest public-market misses of the year: WeWork and the disappointing debut of Uber, which is down some 30 percent since its IPO.