The Week's Top Stories is a guided tour through the biggest market stories of the week, from winning stocks to brutal dips to the facts and forecasts generating buzz on Wall Street.
RALLY AND RUN
The dust is clearing on Wall Street after bulls stampeded back onto Wall Street Thursday, powering one of the biggest comebacks in years. The rally quickly ran out of steam though, as stocks turned lower Friday due to continued uncertainty around the latest inflation numbers. The consumer price index for September came in hotter-than-expected, which lowered expectations that the Federal Reserve will pull back on rate hikes. In addition, the International Monetary Fund said the "worst is yet to come" for the global economy, and JPMorgan CEO Jaime Dimon said the U.S. economy is likely to enter a recession within the next six to nine months.
Shares of electric vehicle maker Rivian plunged this week, including a more than 11 percent drop on Friday. The drop comes on the heels of last week's announcement that the company was recalling more than 12,000 of its vehicles due to a steering issue. While the company has gotten credit for its handling of the recall, investors appeared concerned that Rivian's long-term growth prospects were hindered by the production hiccup. Elsewhere in the EV world, Morgan Stanley analyst Adam Jonas wrote this week that industry leader Tesla is very likely "experiencing demand destruction" due to a mix of inflation fatigue and macroeconomic fears.
BIDEN VS RIDE-SHARING COMPANIES
Uber and Lyft stocks fell around 11 and 7 percent respectively this week following the Biden administration's announcement of a new proposal that could classify gig economy workers as full-time employees. The companies have so far rebuffed multiple attempts by state governments to issue similar rules, but a nationwide regulation could potentially be a game changer for the entire ride-sharing business model. It's still up in the air how exactly the rule will work, but rhetorically at least, the administration took a pretty hard line. “While independent contractors have an important role in our economy, we have seen in many cases that employers misclassify their employees as independent contractors, particularly among our nation’s most vulnerable workers,” said Secretary of Labor Marty Walsh in a statement.
NETFLIX ADDS ADS
Netflix's stock got a boost after the streaming company announced that its ad-supported tier, "Basic with Ads," will officially launch in 12 countries next month. For customers who subscribe to the Basic package for $9.99 a month, a series of 15 and 30-second commercials will fill up about 5 minutes of ad time per hour of content. The company said its goal is to diversify its offerings, and give customers who were thinking about unsubscribing the option to downgrade instead. With the streaming wars only heating up, some investors are bullish that the ad-supported tier will give the OG streamer a leg-up against rivals.