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.
The world watched with bated breath this week as Speaker of the House Nancy Pelosi touched down in Taiwan for an official visit that was flatly condemned by China. Stock markets tumbled amid the geopolitical uncertainty, but once World War III didn't break out, equities evened out for a positive week overall. One last hiccup came with a higher-than-expected jobs report, which investors seemed to interpret as a sign that the Federal Reserve wouldn't slow down its interest rate hikes anytime soon.
Getting into the weeds a bit, earnings season got into full swing this week and automakers. in particular, highlighted how uncertain the current economy is. Ford is up more than 4 percent after reporting that new vehicle sales were up 36.6 percent in July from a year ago. Toyota's stock, by contrast, was dinged after the Japanese carmaker reported lower profits due to supply chain issues, falling about 5 percent. Two electric truck companies performed well, despite being at different stages of production. Lordstown Motors said it expected only a limited number of deliveries in 2022, while Nikola beat expectations with the announcement that 48 of its electric heavy trucks had hit the road last quarter. Its stock surged more than 30 percent.
ROBINHOOD PLUNGES, COINBASE SOARS
Fintech firms' fortunes were also mixed. Robinhood is up for the week but took a beating after reporting that revenue was down 43 percent and that it plans to lay off 23 percent of its workforce. The stock is down around 80 percent from a year ago. Coinbase, meanwhile, is up more than 50 percent following the announcement that BlackRock, the biggest asset management company in the world, will offer the crypto exchange's services to its clients. The BlackRock bump comes as Coinbase weathers an SEC investigation and two class action lawsuits, which, in addition to the broader collapse in crypto markets, have sowed doubts about the future of the platform.
ANOTHER MEME STOCK?
Meanwhile, a little-known Asian fintech company, AMTD Digital, was briefly up an extraordinary 21,000 percent from its initial public offering price last month, temporarily putting its market cap in the range of Disney and Toyota. The stock has since fallen to around $750 per share or more than 1,000 percent above where it was just two weeks ago. It's still unclear what exactly happened to cause this surge, but the meme stock label quickly started circulating. Cheddar News dug a bit deeper, however, and found that the AMTD Digital situation is a little more complicated.
WARNER BROS DISAPPOINTS
Warner Bros. Discovery's stock plunged Friday following an earnings miss and lower revenue forecast that comes on the heels of a controversial decision to shut down production of Batgirl, despite the film being mostly completed. The explanation? CEO David Zaslav said the company can't "find an economic case" for direct-to-streaming movies, another clear sign of how competitive it's getting out there for streamers.
REVENGE OF TRAVEL
So if streaming is in peril, travel is set for a boom, at least according to Airbnb. The travel technology company reported a 58 percent year-over-year rise in sales and lifted its revenue forecast significantly for the third quarter — even as the industry faces severe headwinds due to rampant flight cancellations and delays. "While we have seen COVID distort the historical patterns of seasonality in 2020 and to a lesser extent, the first half of 2021 as a result of travel restrictions and changing travel preferences relating to the pandemic, we are seeing pre-pandemic patterns of seasonality return in 2022," the company said in a letter to shareholders.
GAGA FOR THE GIG ECONOMY
Finally, the gig economy also appears to have the wind at its back. Uber reported its first-ever positive cash flow, and its stock surged nearly 40 percent over the past five days. DoorDash, meanwhile, said orders grew 23 percent year-over-year to an all-time high of 426 million, and its stock rose nearly 18 percent.