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The SPDR S&P 500 ETF Trust SPY ended the week higher as investors digest a series of big tech layoff announcements.
On Wednesday, Amazon.com, Inc. AMZN announced it will be laying off more than 18,000 workers and Microsoft Corp MSFT said it is cutting 10,000 jobs. Google parent company Alphabet Inc GOOG GOOGL also announced 12,000 layoffs on Friday as the technology sector continues to prioritize cost cutting in a difficult macroeconomic environment.
The Federal Reserve said U.S. economic growth and business activity remain soft in its latest Beige Book report released on Wednesday. The Fed said its business contacts throughout the country “generally expected little growth in the months ahead.”
On Wednesday, the Commerce Department reported U.S. retail sales dropped 1.1% on a monthly basis in December, missing economist estimates of a 0.8% decline. Negative retail sales growth is the latest sign Fed interest rate hikes are weighing on consumers and companies.
On Thursday, cryptocurrency lender Genesis became the latest victim of “crypto winter,” filing for Chapter 11 bankruptcy protection. The Genesis bankruptcy comes after crypto exchange FTX collapsed in November and crypto firm BlockFi filed for Chapter 11 bankruptcy protection just weeks later.
Communications Breakdown: Telefonaktiebolaget LM Ericsson ADR ERIC shares dropped nearly 10% this week after the Swedish telecommunications company reported a fourth-quarter earnings miss and warned investors to expect margin contraction in the first half of 2023.
In the week ahead, investors will get more quarterly reports from Microsoft on Tuesday, Tesla Inc TSLA and AT&T Inc T on Wednesday and Intel Corporation INTC on Thursday.
Analysts expect S&P 500 companies to report a 3.9% earnings decline in the fourth quarter, the first year-over-year earnings drop since the third quarter of 2020, according to FactSet.
Economic Numbers: In the wake of the tech layoff announcements, Wall Street will get more key economic updates on Thursday when the Bureau of Economic Analysis releases its preliminary fourth-quarter U.S. GDP growth estimate and on Friday when it releases its December Personal Consumption Expenditures Price Index reading.
Photo via Shutterstock.
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Image and article originally from www.benzinga.com. Read the original article here.