Friday, February 11, 2022
Dow Falls 500 Points as U.S. Warns of Russian Invasion of Ukraine. Stocks ended sharply lower Friday after White House National Security Adviser Jake Sullivan warned that a Russian invasion of Ukraine could happen “any day now.” The Dow Jones Industrial Average fell 504 points, or 1.4%, to close at 34,738, while the S&P 500 dropped 85 points, or 1.9%, ending near 4419. The Nasdaq Composite shed 394 points, or 2.8%, to finish at 13,791. The fall left major benchmarks lower on the week, with the Dow suffering a 1% weekly decline, the S&P 500 down 1.8%, and the Nasdaq off 2.2%. The Ukraine jitters come as investors are wrangling with concerns about how aggressive the Federal Reserve will be in moving to rein in inflation after data on Thursday showed U.S. consumer prices rose at a hotter-than-expected pace last month.
Consumer Sentiment Falls to Its Worst Level in a Decade
Consumer sentiment has plummeted this month, falling to its lowest level in a decade and dropping significantly in only a matter of days, early numbers from the University of Michigan show.
The data from the university’s consumer-sentiment survey—Friday’s 61.7 reading for February was a preliminary number—are designed to capture the mood of American shoppers and offer information about their near-term spending plans.
February’s number is a 19.7% decrease from a year ago and an 8.2% decline from January’s 67.2. Economists surveyed by FactSet expected February’s number to be 67.5.
Inflation Hits Another Four-Decade High. Prices Rose More Than Expected.
Consumer prices surged at a 7.5% annual pace in January, extending a run of four-decade highs and ratcheting up pressure on the Federal Reserve to begin moving aggressively to rein in inflation when officials meet next month.
The consumer price index rose 0.6% in January from a month earlier, the Labor Department reported this week, marking a pickup from the previous month’s 0.5% pace. Both the monthly and annual rates in January surpassed consensus expectations, which had forecast a 0.4% rise over the month and a 7.2% annual pace.
Super Bowl Is the Next Front in the EV War
Ads featuring electric vehicles will be hard to miss during this year’s Super Bowl. It’s a sign that more EV models are coming to dealerships around the country and illustrates how the auto industry is planning for an all-electric future.
Many of the ads are already out, and they have all the star power and production quality Super-Bowl watchers expect.
Brokers, Casinos, and Social Media Are Reconditioning Our Brains
The pandemic turned America into a nation of gamers, traders, and digital speculators. Meme stocks, Bitcoin, and $300,000 “bored apes” have become signs of the times. Yet even with office life returning to normal, leaving less time for speculation, the gaming of our minds and wallets may be just getting started.
Companies are blending sophisticated software, behavioral-finance techniques, social media, and neuroscience tools to nudge consumers and investors into buying, trading, and online gambling. Silicon Valley built empires by hooking us on technology, of course, whether it’s hankering for a “like” on Instagram, clicking “buy it now” on Amazon.com, or placing a $1 trade on Robinhood Markets.
Jobless Claims Fall More Than Forecast as Labor Market Continues to Tighten
Initial jobless claims fell by 16,000 to 223,000 last week, according to the Labor Department, continuing to signal a robust labor market as seasonal factors and coronavirus shutdowns abate.
Economists surveyed by FactSet were expecting initial jobless claims to fall to 230,000 for the week ended Feb. 5. The number of Americans filing for unemployment for the week ended Jan. 29 was revised up by 1,000 to 239,000.
Nvidia Calls Off Acquisition of Chip-Designer Arm
Graphics chipmaker Nvidia and Japan’s SoftBank agreed to call off Nvidia’s deal to buy microprocessor design house Arm. The deal’s collapse doesn’t come as a surprise.
“The parties agreed to terminate the agreement because of significant regulatory challenges preventing the consummation of the transaction, despite good-faith efforts by the parties,” Nvidia and SoftBank said in a joint statement.
Elon Musk Details SpaceX Plans to Go to Mars
Elon Musk hosted an event this week in Texas that didn’t have anything to do with Tesla. At least not directly. It was for his other company, SpaceX and was an update on the gigantic Starship rocket and booster.
Starship is the impressive vehicle Musk plans to use to take life to Mars. The booster stands 230 feet high. Starship, which sits atop the booster, is 164 feet tall. Combined, the launch system is roughly comparable to a 40-story building. The system is twice as powerful as the Saturn V, the rocket that took Americans to the moon, and is fully reusable.
New Data Show Enormous Growth Rate in Gambling Ads
It’s clear to anyone who watches television in a state where gambling is legal that gambling ads are becoming more common. But new numbers show just how quickly they have grown.
The cost of television ads for online gambling and gambling services jumped to $725 million in 2021, up from $292 million in 2020, according to Nielsen. To put that into context, gambling companies now spend three times as much on ads as cereal companies do.
What the Frontier, Spirit Merger Might Mean for Airfares
A merger between Frontier and Spirit would create the U.S.’s fifth-largest airline by capacity, but the deal raises questions over the impact combining two ultra-low-fare carriers could have on airfares.
Frontier Group Holdings said this week it has agreed to buy Spirit Airlines in a deal that would value Spirit at $2.9 billion, with a transaction value of $6.6 billion when including net debt and operating lease liabilities.
Tesla’s Racial Discrimination Lawsuit Moves Forward. What to Know.
A racial discrimination lawsuit against Tesla has taken a step forward. The California Department of Fair Employment and Housing, or DFEH, filed a complaint against the auto maker in state court on Wednesday.
“After receiving hundreds of complaints from workers, DFEH found evidence that Tesla’s Fremont factory is a racially segregated workplace where Black workers are subjected to racial slurs and discriminated against in job assignments, discipline, pay, and promotion creating a hostile work environment,” Kevin Kish, the agency’s director, said in a statement provided to The Wall Street Journal.