The Week's Top Stories: Post-COVID Economy, Big Tech's Big Earnings, Boeing Audit

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.


The U.S. economy is almost back to its pre-COVID level. That was the headline from this week’s GDP data, showing the measure of goods and services produced in the country rose an annualized 6.4 percent in the first quarter, putting it just 1 percent shy of 2019 levels. The rebound is being driven by an extraordinary repositioning of the consumer-driven economy: sales of durable goods — i.e., the stuff you buy to last a while, like furniture, cars, and appliances — are off the charts, up 41 percent in the first three months of 2021. (Stanley Black & Decker revenues up 34 percent YoY!) Just as the recession wasn’t equally distributed, the recovery isn’t, either. Spending on services like travel and restaurants are rising at a far slower pace. The big question is whether those sectors can ever make up the steep losses they suffered during the last year. 


The five biggest tech companies all reported earnings this week, once again showing how the pandemic has put their total dominance into hyperdrive. Google parent Alphabet beat on the top and bottom with revenues rising 34 percent from the same period last year. YouTube’s ad revenue alone crossed $6 billion, indicative of the digital advertising market’s comeback. Facebook blew it out, too, on a 48 percent revenue surge thanks, again, to the digital ads. Microsoft continued the trend with its biggest quarterly revenue growth since 2018, helped in part by LinkedIn booking $3 billion in ads during the last year. Apple raised the bar even further, reporting 54 percent revenue growth and showing almost insane sales in all product lines, not just iPhone. Then Amazon capped the week by demolishing expectations with revenues up 44 percent. The company has now made more money in the last year — $27 billion — than it did in the previous three years combined, which were its most profitable in history until the pandemic hit.  


The FAA is launching an audit into the latest safety issues with Boeing’s 737 Max fleet, namely how a minor production tweak led to a problem with some of the plane’s electrical circuitry. The FAA will examine "Boeing’s process for making minor design changes across its product line, with the goal of identifying areas where the company can improve," regulators said after the WSJ reported the audit. The FAA has been all over Boeing since it lifted the nearly two-year-long grounding of the entire Max fleet following two crashes that killed 346 people. Months later, Boeing notified airlines that they needed to fix an issue with the electrical panels on about 100 planes, or about a quarter of the global fleet, that involved how holes were drilled. Meanwhile, Boeing reported its sixth consecutive quarterly loss, though it was slightly better than expected. The company says it expects 2021 to be a turning point as the air travel market picks up. Boeing shares tumbled 3 percent, though the stock is still up around 10 percent on the year after a horrendous 2020.


President Biden’s labor secretary, Marty Walsh, sent shares of Uber, Lyft, and DoorDash cratering as much as 10 percent when he said in an interview that gig workers should be classified as employees with benefits. Walsh’s comments did not signify a shift in federal law, but investors took them as a sign that the new administration may crack down on the gig economy and its controversial labor practices, which would make it more difficult for them to become profitable. Both Uber and Lyft have said they think they can turn a profit by the end of the year. It’s a longer road for the food delivery apps, though DoorDash posted a fleeting profit in Q2 of last year when everyone was stuck at home ordering in. 


The hottest digital coin on the block: Ether. The second most popular cryptocurrency, which runs on the Ethereum blockchain, hit an all-time high of $2,800. Ether is up more than 40 percent on the month while Bitcoin is down to just under $57,000 from its all-time high above $63,000 reached earlier in April. Bitcoin’s long-held dominance of the crypto space is showing signs of slowing as more capital flows into alternative coins like Ether or Doge, the meme-based coin that started as a joke and surged again this week on bullish comments from longtime supporter Elon Musk and new convert Mark Cuban.
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