The Week in Business: From Facebook to Meta
What’s Up? (Oct. 24-30)
The Facebook Papers
Last week, more than a dozen news organizations published reports based on a trove of Facebook’s internal documents leaked by a former product manager. The documents detail what Facebook knew about its role in radicalizing users, employees’ questions about the impact of its core features, and its struggles to curb dangerous content internationally. The former Facebook employee-turned-whistle-blower, Frances Haugen, has appeared on “60 Minutes,” in front of Congress, and — this past week — in Britain’s Parliament to argue that the company puts profits before people. (Facebook has said that it has millions of documents that counter those shared by Ms. Haugen). Whistle-blowers have filed at least nine complaints against Facebook with the Securities and Exchange Commission based on internal documents. On Thursday, Facebook changed its name to Meta.
Tesla Joins the Trillion-Dollar Club
Tesla reached a $1 trillion market valuation last week, a milestone that has only been passed by five other companies: Apple, Microsoft, Amazon, Facebook and Alphabet. The spike in Tesla’s share price was propelled by an announcement from Hertz that it would convert more than 20 percent of its rental fleet to Tesla’s electric cars by the end of next year. The car-rental company said it would buy 100,000 Teslas, a purchase that Bloomberg reported would generate about $4.2 billion of revenue. Tesla’s market capitalization is greater than those of General Motors, Toyota, Ford, Volkswagen, BMW, Honda and several other automakers combined.
Inflation Is Still Going Up
Both companies and shoppers are noticing the impact of high inflation, driven in part by supply chain shortages. Prices of meat, poultry, fish and eggs in U.S. cities are up 15 percent since the start of 2020. And General Electric, Sherwin-Williams and Hasbro all noted that rising prices were affecting their businesses on calls with investors last week. One measure of inflation released on Friday, the Personal Consumption Expenditures price index, showed prices in the United States were rising at the fastest rate in three decades in September, while another measure showed the highest ever rate of inflation in the eurozone in October. Signals from the bond market suggest that rising inflation could last longer than the temporary bump in prices that many policymakers had expected because of the pandemic.
What’s Next? (Oct. 31-Nov. 6)
It May Be Time to Taper
Federal Reserve officials will gather this week, and the two-day meeting is a big one. The central bank is expected to announce that it will begin winding down the bond-buying efforts it put in place to support the economy during the pandemic. The Fed has been signaling for months that it planned to begin tapering its bond purchases in November. But it is not expected to raise interest rates until at least the middle of next year.
The Pace of Job Growth
On Friday, the Labor Department will report how many jobs were filled in October. Job growth slowed to the weakest pace of the year in September as consumers and businesses reacted to a spike in coronavirus cases. But hospitalizations and deaths linked to the coronavirus fell in October, so economists expect job growth to have accelerated. Still, labor shortages and low labor force participation may have continued to hamper the recovery. In September, fewer Americans were seeking work than before the pandemic, even as expanded unemployment insurance benefits expired early in the month. At the same time, with so many jobs unfilled, a record number of workers quit their jobs in August, data released earlier this month showed.
On the Supreme Court Agenda
The Supreme Court has two highly anticipated cases on its schedule this week. On Monday, the Supreme Court will hear arguments in two separate challenges to the Texas law that bans most abortions after six weeks of pregnancy. Both challengers said the law is at odds with Roe v. Wade, which prohibits states from banning abortions before fetal viability, or around 23 weeks. Dozens of companies, including the ride-hailing company Lyft and the cloud-storage company Box, publicly opposed the law in September, when it went into effect. On Wednesday, the court will hear its first major Second Amendment gun case in more than a decade. The case involves a longstanding New York law that imposes strict limits on carrying guns outside the home.
PayPal killed its Pinterest deal. Democrats are struggling to reach an agreement on their spending deal. Millennials are struggling to manage their Gen Z workers. And if the Centers for Disease Control and Prevention signs off on giving Pfizer-BioNTech’s coronavirus vaccine to children 5 to 11, as expected, children could start getting shots as early as Wednesday.