Stocks bounced higher on Friday to close a chaotic week in the financial markets, helped in the end by Federal Reserve Chairman Jerome Powell's reassurance that rate hikes on the order of 75 basis points were off the table for now. But Friday's gains were not enough to erase sharp losses for the full week, as investors worried about the Fed's ability to turn back raging inflation without knocking the U.S. economy into a recession. The Dow Jones index ended with its seventh weekly loss in a row, marking its longest losing streak since 2001, while the S&P 500 slid 2.4% for its longest weekly losing streak since 2011, and the Nasdaq Composite fell 2.8%
News:
• Disney Earnings: The House of Mouse reported 7.9M new Disney+ subs to reach 137.7M subscribers, avoiding a slowdown that has recently plagued streaming rival Netflix (NFLX). CEO Bob Chapek also affirmed the "very achievable" targets of signing up between 230M-260M subscribers to Disney+ by September 2024, and having the streaming video-on-demand business achieve profitability before then. A strong performance was also seen at Disney's parks, experiences and products segment, with revenue more than doubling to $6.7B during the quarter. Operating profit of nearly $1.8B, which was close to pre-pandemic levels, beat analyst estimates by 18% and compared to a year-ago loss of $406M. Total Revenue came in at $19.2bn, below the $20.03bn estimate. DIS stock went down 1.68% during the week.
• Robinhood shares rally after Billionaire buys big stake in the company: Sam Bankman-Fried, the CEO of crypto exchange FTX, has taken a 7.6% stake in Robinhood, according to a Thursday filing with the Securities and Exchange Commission. Shares of the investing app jumped 24.9% on Friday after the news broke. Billionaire invested $648 million in Robinhood. That makes him the third-largest shareholder in the company. Despite the Friday’s rally, HOOD is still down more than 40% YTD.
• Elon Musk sends Twitter shares tumbling with one tweet: Tesla CEO posted the following tweet on Friday: “Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users”, which sent the social media shares down almost 10%. Though Musk added that he's still committed to the acquisition, investors are clearly worried the billionaire will find a way to back out. The suggestion that spam and fake accounts were holding things up could be a case of Musk haggling for a lower price than the $54.20 he agreed to. With the stock trading at $40.72, Wall Street traders still think he might have a shot at getting a better price, However if you believe that the deal will go through with the original price, there is more than 30% upside for the stock right now.
