What’s News in Markets: Tech Layoffs, Gaza and McDonald’s, Disney Deals
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What is the main topic discussed in this episode?
Hey, your money briefing listeners. I'm Francesca Fontana for The Wall Street Journal. Every week, I write a column for The Journal called The Score. It's a look at the biggest stock moves of the week and the news that drove them. And now, every Saturday, we're bringing you what's news in markets. Let's get to it. U.S. stocks were rallying this week, with major indexes hitting record after record.
What was driving this week's U.S. stock rally and record highs?
Most notably, the S&P 500 had another record performance and closed on Friday above 5,000 for the first time. And speaking of records, on Friday, Microsoft became the most valuable company ever, surpassing Apple's $3.09 trillion market cap.
Why did Microsoft become the most valuable company ever this week?
Very exciting.
Why is DocuSign cutting jobs and how big are the layoffs?
Right now, stocks are being propelled by strong earnings, a resilient economy and cooler inflation. So the question to ask now is, how much further can it go? Let's talk about DocuSign. That's the e-signature company that some of you might have used to sign documents online, and it's also the latest to join the wave of tech companies announcing layoffs since the new year. DocuSign said it would cut about 6% of its workforce, or 400 jobs, as it tries to bring down costs and reverse its struggling stock price. This may sound familiar. This is a trend that we've seen repeated over the last few years. During the pandemic, tech companies went on these huge hiring sprees, adding a bunch of workers. Too many workers, they decided.
How do recent tech and corporate cost cuts reflect post-pandemic hiring trends?
So then they went on to cut tens of thousands of them in 2022 and 2023. And again now. And it's not just tech that's getting hit with all of this belt tightening. This past week, we saw similar announcements from Warner Music Group and Estee Lauder, the giant makeup company. DocuSign shares fell about 2% on Tuesday and traded lower as the week went on, so its struggling stock price is still struggling.
This week's earnings reports included one from McDonald's, and it showed that the fast food giant has gotten caught in the fray of Israel's war in Gaza. We've seen the conflict's ripple effects on politics and public opinion in the U.S., and it applies to the corporate sphere as well.
How did the war in Gaza affect McDonald’s international sales and reputation?
American companies on the whole have tried to avoid the appearance of taking sides in the conflict. McDonald's being no different. In October, the company's Israel business run by a local franchisee said on social media that it was providing free meals to Israeli soldiers, while other franchisees in the Middle East said they'd donate to relief efforts in Gaza. And those moves made McDonald's the target of criticism and calls for boycotts from both sides. So this week, McDonald's CEO said that the misperceptions around its position on the war did weigh on its international sales in the quarter. Now, McDonald's did have some good news in its report, too. Price increases and menu promotions helped boost its U.S.
sales. But that didn't seem to temper investor sentiment.
What deals did Bob Iger announce and how did they boost Disney’s stock?
And shares fell almost 4% on Monday, though they regained some ground later in the week. And last but certainly not least, let's talk about Disney. Now, for those of you dedicated listeners, you heard earlier in the week about the big new sports streaming platform coming from Disney's ESPN, Fox, and Warner Brothers Discovery. But that wasn't the only big news about Disney this week. During the company's earnings report on Wednesday, CEO Bob Iger presented a bunch of new deals that he said will help Disney in its reinvention. There's a deal to invest $1.5 billion in Epic Games, which is the maker of the popular video game Fortnite. And there's Taylor Swift. Disney Plus will be the home of an exclusive cut of the movie version of her blockbuster Heiress Tour.
These new initiatives might be just what Disney needs to thwart two proxy challenges at its annual shareholder meeting in April. Activist investors might have a harder time making their case now that these deals tie Disney to some of the biggest players in our pop culture landscape. And investors were on board. Disney's shares jumped almost 12% Thursday and held on to most of those gains. And now you know what's news in markets this week.
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Chapters
7 chapters
1
What is the main topic discussed in this episode?
0:03–0:22
2
What was driving this week's U.S. stock rally and record highs?
0:22–0:38
3
Why did Microsoft become the most valuable company ever this week?
0:38–0:39
4
Why is DocuSign cutting jobs and how big are the layoffs?
0:39–1:23
5
How do recent tech and corporate cost cuts reflect post-pandemic hiring trends?
1:23–2:11
6
How did the war in Gaza affect McDonald’s international sales and reputation?
2:11–2:53
7
What deals did Bob Iger announce and how did they boost Disney’s stock?
2:53–4:20
Speakers
1 identifiedMore from WSJ Your Money Briefing
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