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.
BULL MARKET IS BACK
The longest bull market in history was replaced by what is now officially the shortest bear market in history. The S&P 500 finally secured a record high after flirting with the level for weeks, officially wiping out the pandemic-induced decline that lasted just 126 trading days. The final push was sparked by better-than-expected retail earnings, the continued Big Tech boom, and strong housing data. Despite tens of millions of people who are still out of work — another 1.1 million filed for unemployment last week — the benchmark stock index is now about 5 percent higher for the year.
Apple became the first American company to reach a market valuation of $2 trillion. The iPhone-maker has doubled its value in just two years, joining the Saudi Aramco, the state-owned oil giant, as the only companies to ever hit the milestone. Investors were worried that the coronavirus was going to majorly disrupt Apple’s supply chain, but the stock has been on fire, up more than 50 percent since the pandemic began. Still, the company faces major headwinds, including various antitrust probes that may have culminated in Epic Games’ lawsuit against Apple over its app-store pricing structure last week. The fight grew more contentious this week with major news publishers, including the NYT and WSJ, joining in support of a renegotiated fee structure for in-app payments.
AMAZON HIRING SPREE
For everyone saying remote work is the future, Big Tech is saying: not so fast. Amazon is adding 3,500 white-collar jobs at offices in six cities: Phoenix, Denver, San Diego, Detroit, Dallas, and NYC. New York will get 2,000 of those jobs, which will be based out of the former Lord & Taylor flagship store (which was sold to WeWork last year and then flipped to Amazon for a reported $1 billion). Facebook recently signed a major lease of space on the west side of Manhattan, and Google continues to build a new campus down the street.
GIG ECONOMY BUYS TIME
Hours before Uber and Lyft were set to shut down in California, they were granted a temporary reprieve from a federal judge that will allow the ride-hailing companies to remain in service — at least for now. Friday would have been the deadline for Uber and Lyft to reclassify their drivers in the state as employees under the state’s new law known as AB5. They now have until Aug. 25 to agree to a new timeline on the appeal. There’s a referendum on the California ballot in November that would give Uber, Lyft, and other app-based services carve-outs on the employee classification issue.
HOUSING MARKET BOOMS
The market for newly-built single-family homes in the U.S. is on fire. Homebuilder sentiment, which is a closely watched gauge for the broader housing market, is higher than it’s been since 1998 as buyers looking for more space in less dense areas are enticed by record-low interest rates to make their move. The flip side: the cost of lumber is soaring, having more than doubled since April. That could mean higher prices for new homes this fall. And even people staying in their homes are spending to spruce them up. Both Home Depot and Lowe’s reported spectacular quarterly earnings, exceeding revenue expectations by 10 percent. However, neither stock popped on those earnings, a sign that investors think the surge in foot traffic may have been a one-off, sparked by housebound families using quarantine and lockdowns to finally take on that long-planned home improvement project.