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.
News of yet another COVID variant — the ominously titled omicron — spurred a sell-off in U.S. stocks last Friday and sent markets on a rollercoaster ride this week. Major drops were seen Tuesday and Wednesday, Thursday things were looking up, and Friday saw a drop after a major jobs miss in the November report. As the major indexes slump, uncertainty around the pandemic could fuel further turmoil, as the U.S. confirmed its first omicron cases this week and investors continued to weigh the possibility of new lockdown measures, though President Biden has denied this is the plan.
Markets were also responding to comments from Fed Chair Jerome Powell, who hinted this week that the central bank could start tapering its quantitative easing program sooner rather than later due to high inflation. He also said it was time to abandon the word "transitory" to describe price hikes, suggesting the Fed might be preparing for more persistent inflation. This is a major break with the Fed's messaging in recent months and a loss for #teamtransitory — a group of economists who have stuck to their guns that inflation is only temporary.
MODERNA'S OMICRON GAMBIT
All these dismal market moves left some investors looking for a glimmer of hope. One company that did see gains on the omicron news was Moderna. Its stock jumped 21 percent on Black Friday during the market sell-off and 12 percent on Monday after the company announced that it could produce a vaccine to fight the new variant by 2022 if necessary. It should be noted that CEO Stéphane Bancel also said current vaccines likely won't be particularly effective in fighting the new variant, which led to a broader market sell-off on Tuesday's. Still, Moderna's pop marked its best two-day rally in a year. Some analysts noted that the U.S.-based biotechnology company, known for helping pioneer mRNA vaccines, is uniquely suited to tackling new variants, but the pharma company was down for the week along with the rest of the markets.
Apple was among the major tech stocks that took a beating this week. Shares fell as much as 4.2 percent on Thursday, following a report that Apple told its component-makers sales of its iPhone 13 were falling and it didn't expect demand to pick up during the holidays or beyond them. The drop erased the high-flying tech stock's most recent gains, but shares are still up more than 20 percent this year. The iPhone maker is blaming a lack of parts for the fall in demand. Another tech stock that sank this week was Salesforce, which saw a 12 percent price drop on Wednesday following disappointing earnings guidance projecting slower growth.
Investors were watching Twitter's stock closely this week as co-founder and CEO Jack Dorsey stepped down to lead Block, the payments company formerly called Square which he also co-founded. The new head honcho at the social media giant is Parag Agrawal, who worked his way up from a software engineer to CTO and is a bit of an unknown entity. Dorsey's absence does have some investors wondering if Twitter can meet its ambitious revenue goals. The outspoken tech founder rejoined the company back in 2015 — after getting booted by the board — and has since helped stabilize its business model. What will Twitter be without @Jack? You'll have to watch your feeds.