Weekly Market Recap

Published Mar. 12, 2022
Weekly Market Summary

WEEKLY MARKET SUMMARY

Dow Jones S&P 500 Nasdaq
32,944 (-1.89%)
4,204 (-2.84%)
12,843 (-3.64%)

Bed Bath & Beyond skyrockets after GameStop chair reveals big stake

In the premarket on Monday, shares of Bed Bath & Beyond more than quadrupled when GameStop Chairman Ryan Cohen revealed a nearly 10% position in the retailer through his investment firm RC Ventures. In a letter to Bed Bath’s board, Cohen, the co-founder of online pet shop Chewy, stated that he believes the retailer is trying to recover market share losses and negotiate supply chain issues. Bed Bath & Beyond should also consider strategic alternatives, such as splitting Buybuy Baby or selling the firm entirely, according to Cohen. During last year’s meme stock craze, Bed Bath & Beyond had many jumps to the upside, but the stock was unable to hang on to those gains.

Buffett’s Berkshire reveals $5 billion Occidental stake; Icahn sells

Warren Buffett lamented the lack of “nothing that thrills us” in the equity markets in his annual letter to shareholders, which was posted roughly a week ago. However, according to a new SEC filing dated Friday night, Berkshire Hathaway is quite bullish on Occidental Petroleum. As of Friday’s closing, Berkshire owned 91.2 million common shares in the oil giant, valued at $5.1 billion. The stock, which had surged 18 percent on Friday and 45 percent last week, was up about 7% in premarket trading on Monday. Meanwhile, according to The Wall Street Journal, investor Carl Icahn has sold the last of his formerly 10% investment in Occidental.

WTI crude jumps again as U.S. may ban Russian energy

The U.S. oil standard, West Texas Intermediate crude, surged more than 5% to approximately $125 per barrel on Tuesday, after finishing at its highest level since September 2008. On Sunday, WTI surpassed $130, a high not seen since July 2008. According to NBC News, the US was planning to impose a restriction on Russian oil without the assistance of Europe as early as Tuesday. The European Union is significantly reliant on Russian energy output.

The London Metal Exchange halted nickel trade Tuesday after prices quickly doubled to a record high of more than $100,000 per metric ton, propelled by a rush to cover short bets after Western sanctions threatened Russian supplies. Nickel prices have doubled in the last week due to concerns about potential supply restrictions. Nickel is utilized in stainless steel manufacture and batteries, and Russia produces around 10% of the world’s supply.

Bitcoin jumps as Biden announces executive order on cryptocurrencies

Bitcoin and other cryptocurrencies rose on Wednesday as Vice President Joe Biden issued his long-awaited executive order on digital assets. The directive aims to address the lack of a framework for the development of cryptocurrencies in the United States, which opponents fear would lag behind the rest of the world’s economy. The executive order, according to Treasury Secretary Janet Yellen, “calls for a coordinated and comprehensive approach to digital asset policy.” The bitcoin business and investors appear to be enthusiastic about it.

Bond yield rise after more hot inflation data

After February’s consumer price index reached 7.9% over the previous 12 months, a new 40-year high and somewhat more than expectations, the 10-year Treasury yield rose to roughly 1.98 percent on Thursday. Core inflation reached 6.4 percent in August, in line with estimates but the biggest since August 1982, excluding food and energy, which both jumped strongly during the month.

The latest wholesale inflation and retail sales figures will be released on Tuesday and Wednesday, the two days before the Federal Reserve’s March policy meeting. Next week, central bankers are largely expected to begin raising near-zero interest rates for the first time since the Covid era, the first of a series of rate hikes predicted this year to combat inflation.

Uber Raises Quarterly Guidance on Delivery Growth, Ridership Recovery

Uber Technologies Inc. boosted its first-quarter guidance on Monday, claiming that its ride-hailing company is swiftly recovering from the disruption caused by the Omicron variant’s introduction in late 2021.

The business boosted its adjusted earnings before interest, taxes, depreciation, and amortization outlook for the current quarter from $100 million to $130 million to $130 million to $150 million.

This indicator has been used by the corporation to indicate that its operations are on their way to becoming profitable in the future.

The increase in expectations is due to improved performance in Uber’s ride-hailing and delivery businesses, as opposed to the fourth quarter of 2021, when a spike in Covid-19 cases interrupted operations, according to the company.

The company reported an adjusted Ebitda of $86 million in the fourth quarter, exceeding analysts’ estimates. During the holiday quarter, it also increased revenue by 83 percent to $5.78 billion. It was only the second time since the metric’s introduction that the corporation has made a profit on it.

Uber’s stock dropped 4.2 percent to $28.57 on Monday, as part of a broader market selloff fuelled by higher oil prices. Uber’s stock has dropped by over 50% in the last year.

Carbon-Transformation Startup LanzaTech is Going Public in $2.2 Billion SPAC Deal

LanzaTech NZ Inc. is combining with a special-purpose acquisition company to go public in a deal valued at $2.2 billion, according to company officials. LanzaTech NZ Inc. is a carbon capture and transformation company based in New Zealand.

LanzaTech, based in Chicago, captures carbon that would otherwise be released during industrial operations and employs microbes to transform the waste gas into environmentally friendly compounds like ethanol. Companies like China’s Shougang Group Co. incorporate LanzaTech’s technology into their manufacturing processes, while Unilever PLC and Coty Inc. are among the end-users of the generated end goods.

In a deal due to be announced Tuesday, LanzaTech will merge with SPAC AMCI Acquisition Corp. II, a blank-check corporation focused on the energy transition.

Visa, Mastercard Prepare to Raise Credit-Card Fees

Visa and Mastercard are planning to raise the fees that many large retailers pay when they accept credit cards from customers.

According to persons familiar with the situation and a document seen by The Wall Street Journal, the cost increases, which have been deferred for the previous two years due to the pandemic, are set to take effect next month.

The majority of the increase is due to exchange fees. When customers use their cards, merchants pay these fees, which are established by the card networks. The fees are paid to the card’s issuing bank.

According to the Nilson Report, businesses in the United States paid card issuers a projected $55.4 billion in Visa and Mastercard credit-card interchange fees in 2021, more than double the amount in 2012. At least some of these costs are passed on to the consumer in the form of higher prices. Consumers are increasingly being charged additional fees when paying with credit cards.

Mainstream Hedge Funds Pour Billions of Dollars Into Crypto

Crypto is attracting the attention of some of the world’s most prestigious hedge funds.

According to persons familiar with the situation, firms formed by veterans such as Alan Howard, co-founder of Brevan Howard Asset Management LLP, and Paul Tudor Jones, the billionaire who owns Tudor Investment Corp., are growing their crypto trading.

In January, Brevan Howard announced the formation of a bitcoin hedge fund that will begin accepting outside investors. The fund is betting on the price of bitcoin, ether, and other cryptocurrencies, as well as looking for currency arbitrage and investing in blockchain technology. Brevan Howard launched BH Digital, a new crypto branch in September that oversees over $250 million and employs 12 portfolio managers. Mr. Howard is also a cryptocurrency, blockchain, and digital-token investor.

Mr. Jones, on the other hand, has been buying cryptocurrencies in an attempt to hedge against growing inflation. According to a source familiar with the issue, Hudson Bay Capital Management LP, a $15 billion New York hedge fund, has experienced increasing gains from cryptocurrency trading, as have other large corporations.

The adoption of crypto by more seasoned hedge-fund managers—who, like stock traders, are often betting on the direction of a token’s price—is the latest indicator of Wall Street’s warming to digital currencies.

DocuSign Stock Plunged on Soft Outlook

DocuSign Inc.’s stock dropped 20% on Friday, wiping away the firm’s pandemic-era gains, after the e-signature software maker issued softer-than-expected fiscal 2023 projections.

The company reported Thursday evening that full-year revenue will be in the range of $2.47 billion to $2.48 billion, down from the $2.61 billion expected by FactSet analysts.

The company also predicted a slowdown in subscription revenue growth, with estimates ranging from $2.39 billion to $2.41 billion.

Billings, which include new-customer sales, subscription renewals, and add-on purchases for existing customers, are estimated to be $2.71 billion to $2.73 billion, a significant decrease from 2021.

Its stock price tripled in 2020, but dropped about 32% last year. The stock closed at $75.01 on Friday, down 51% so far this year.

U.S. Consumer Sentiment Hit by Inflation Worries, Ukraine Invasion — University of Michigan

DocuSign Inc.’s stock dropped 20% on Friday, wiping away the firm’s pandemic-era gains, after the e-signature software maker issued softer-than-expected fiscal 2023 projections.

 

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