What's News in Markets: Steel Deal Pushback, FedEx Tumbles, China vs. Gamers
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Hi there, your money briefing listeners. I'm Charlie Grant for The Wall Street Journal, filling in for Francesca Fontana. I'm one of the markets reporters here at The Journal, keeping you up to date on the latest economic and corporate news that's affecting stocks. We've heard you're eager for more markets coverage here, so like we've been doing each of the past few Saturdays, today we'll be taking a look at the biggest stock moves of the week and the news that drove them. Take a listen, let us know what you think. Let's start at the end. The week ended with the news that the Federal Reserve seems to be winning its fight against inflation. The central bank's preferred inflation measure, called the PCE Index, fell 0.1% in November from a month earlier, the first drop since all the way back in 2020.
Investors are betting inflation is finally going away, and that report gave them some evidence to back it up. Meanwhile, something happened to stocks this week that lately would be considered very unusual. They went down. The S&P 500, Dow Jones Industrial Average, Nasdaq Composite all fell by more than 1% on Wednesday, snapping an extended bull run. Of course, markets have been on a tear lately, even if Wednesday was a bit of a downer. And they bounced back the next day, right away. When all was said and done, all three major indexes rose for an eighth straight week. Turning to individual stocks, there were some big movers this week. Some good, some not so good. We started on a high note. U.S. steel stock jumped 26% on Monday.
That came after the company agreed to be acquired by Nippon Steel in a $14.1 billion deal that would give the Japanese corporation a major role in U.S. steelmaking. Now, U.S. Steel has been evaluating various offers since August, and we knew that. So we were expecting some sort of deal announcement. But this one was pretty big. It values the Pittsburgh company at $55 a share, well above its current trading price of about $48. So investors loved it. Of course, the deal comes with a catch. It would end the independence of one of America's oldest and most storied enterprises in a key industry.
How did the latest PCE report signal the Fed's progress on inflation?
And in part because of that, it's attracted criticism from both the Steelworkers Union and some key government officials. The White House said the deal deserves serious scrutiny, so we'll have to wait and see whether it truly crosses the finish line. This story isn't over just yet. One reason markets have rallied so much lately is that investors believe the economy is slowing, but not too quickly. But earnings from some big names this week might have given investors at least a small reason to reconsider that idea. The package delivery giant FedEx reported weak results Tuesday night. Shares toppled 12% the next day, their worst one-day drop in more than a year. And they've remained low throughout the week.
FedEx said it's seeing weaker demand and it lowered its forecast for annual revenue. Executives said the mix of consumer spending between goods and services is close to pre-pandemic levels. That makes sense to me. I certainly have way fewer boxes coming to my house than I did in 2021, even though I just finished doing my Christmas shopping. And Friday had some bad news for investors and gamers. The Chinese government is cracking down on online gaming, and stocks in the industry took a big hit. The new proposals include preventing game companies from using rewards that might encourage people to spend more time or money online. And the stock market fallout was no joke. Tencent fell 12% in overseas trading and lost $46 billion in market value.
That's billions with a B. And NetEase, the Chinese gaming company, fell 25%. Gaming stocks in the U.S. were relatively unscathed. But a lot of investors depend on China as a key growth market worldwide in a lot of industries, not just gaming. And this week brought an unfortunate reminder of what can happen when stocks encounter unfriendly government policies. And now you know what's news in markets this week. That does it for our weekly markets roundup for now.
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