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.
RETAIL SALES RISE
Retail sales shot up 3 percent in January, blowing past Wall Street estimates and providing further evidence of the U.S. economy's resilience despite macroeconomic uncertainty. One big driving factor was food and drink sales, which soared 25.2 percent from the year before. In addition, general merchandise sales were up 4.5 percent. The data put downward pressure on markets, which saw it as a sign that the economy is still overheated.
MONTHLY INFLATION RISES
The latest consumer price index came out on Tuesday, and the results left markets uncertain about the future course of inflation. While annual inflation ticked down from 6.5 percent to 6.4 percent, monthly inflation jumped from a 0.1 percent decline to a 0.5 percent increase. The gains were mostly fueled by shelter, food, and a rebound in energy prices after months of declines. The debate continues over how the Federal Reserve will respond to the data, and in particular whether the latest number will push the Fed to double down again on rate hikes.
Airbnb's stock is up almost 20 percent this week, seeing its biggest one-day gain on Wednesday after reporting its first annual profit and forecasting a strong 2023. The home rental service reported $1.9 billion in profits in 2022, after losing $352 million the year before. It is now expecting a first quarter profit of between $1.75 billion and $1.82 billion, which is up from $1.5 billion in 2022. “We’re particularly encouraged by European guests booking their summer travel earlier this year, the market share gains we are seeing in Latin America, as well as the continued recovery within Asia Pacific," Airbnb said in a shareholder letter.
Roku saw an even bigger rally after reporting a bump in streaming hours and revenue. While profits were down slightly, revenue increased from $865 million in the same quarter last year to $867 million. Streaming hours also hit 23.9 billion, up from 21.9 billion in the third quarter. In addition, Roku benefited from easing supply chain issues. “U.S. smart-TV unit sales were better than expected, benefiting from lower TV-panel prices and freight costs," said the company in a shareholder letter. Shares of Roku were up more than 30 percent at the end of the trading week.