Wall Street’s main indexes closed on a subdued note last week, with the Nasdaq (IXIC) shedding over 1.5%, the Dow Jones (DJI) adding just about 0.1%, and the S&P 500 (GSPC) falling by 0.7% for the week.
The week started on a strong note, with indexes hitting record highs, as strong earnings, hopes for a stimulus package and progress in vaccination rollouts propelled the markets. However, some profit-taking towards the end of the week, along with higher interest rates pushed the markets lower, leading to the negative returns.
Bitcoin grabbed the headlines as it hit a market capitalisation of $1 trillion, reflecting a growing acceptance of the asset class, while social media giant Facebook (FB) was in the news over the blocking of Australian news sites in its services.
The week ahead will see investors eyeing a testimony from Federal Reserve Chairman Jerome Powell before the Senate Banking Committee and the House Financial Services Committee.
Facebook blocks Australian news content in opposition to proposed legislation
Facebook blocked all Australian news content last week from its services in opposition to a proposed legislation that seeks the company and Google (GOOG) to pay fees to Australian publishers for news links. The decision also led to erasing of many state government and emergency department accounts. Shares of the company fell 4.5% for the week.
The move marks an escalation in the battle between the company and the Australian government over the proposed law, which requires social media companies to pay for links to news content. While Australia has vowed to go ahead with the legislation, the trend could spell trouble for companies like Facebook as countries like Canada have sought to take similar action too.
Shopify reports stellar quarterly revenue, but warns of slower growth this year
Shopify (SHOP) reported a near doubling in its holiday-quarter revenue to $977.7 million, while gross merchandise value jumped 99% to $41.1 billion, but the Canadian e-commerce firm has hinted at a slower revenue growth this year as more people get vaccinated against the coronavirus.
Shopify had witnessed a significant growth in the pandemic year as its platform — which helps setup online stores and also aids in tracking payments and shipments — onboarded more sellers and businesses looking to cash in on a surge in online shopping. However, increased vaccine rollouts in the United States are raising expectations that consumer spending will return to brick-and-mortar stores from e-commerce, a fact stated by the company itself last week. This could set the trend for a steadying in revenue and profit trends for its peers as well, going forward.
Google fires second AI ethics leader
Google fired its second AI ethics leader Margaret Mitchell, more than a month after dismissing AI ethics researcher Timnit Gebru that has brought to the fore a major dispute over research and diversity in the Alphabet-owned company.
The company’s ethics in its work around artificial intelligence has come under the radar after Gebru was fired in December. The scientist had exposed bias in facial analysis systems and her dismissal had sparked protests among several Google employees. Both Gebru and Mitchell have advocated for greater diversity and inclusion among Google’s research staff while raising concerns about the firm starting to censor papers critical of its products. Mitchell had also publicly criticized the company for firing Gebru and undermining the credibility of her work.
Walmart sees a jump in annual revenue, forecasts slowing of profit growth ahead
Walmart (WMT) reported a jump in its revenue to $560 billion last year, but the world’s biggest retailer now expects annual sales and profit to slow down as it reinvests in its business. The company forecast adjusted net sales to grow in the low single digits in fiscal 2022, which ends on Jan. 31. This is lower than the 8.5% growth seen in the preceding year. It also raised wages to more than $15 per hour on average.
After witnessing a strong year due to pandemic-led stockpiling by consumers, the trend is likely to steady for such companies as consumers expect lesser supply disruptions. Its decision to increase wages also comes at a time when the issue around higher federal minimum wage gathers momentum. President Joe Biden has reiterated his support for the hike and is pushing for it to be added to the COVID-19 rescue package as well. But, on the bright side, the company could be looking at increased consumer spending due to the government’s stimulus checks plan.