Layoffs Beyond Tech
It seems selling phones isn’t the only similarity between Best Buy (BBY) and the tech sector. The electronics retailer — one of America’s biggest — recently announced its decision to lay off hundreds of store workers across the country.
The decision was blamed on shifting consumer spending habits, with about a third of Best Buy’s sales coming from online. The electronics retailer declined to specify exactly how many roles it plans to remove. But as of January its employee count is already down to 90,000 from 125,000 in early 2020.
This week, Best Buy will also report earnings, allowing investors to look for clues as to whether the layoff decision was a wise one from a business perspective. Layoff announcements typically lead to share price spikes or stronger earnings in subsequent quarters. But some research suggests widespread layoffs can have a net negative impact on long-term performance.
Here’s what else to watch for on Wall Street this week.
Economic Data
The week will feature a number of speeches by members of the Federal Reserve, with the St. Louis Fed’s Jim Bullard kicking things off today. Bullard will offer commentary on the Fed’s decision to raise the fed funds rate to 5% to 5.25% during its May meeting. This marked 10 straight months of rate increases and the highest level seen since 2007.
Tomorrow, Lorie Logan of the Dallas Fed will follow up Jim Bullard’s comments with a speech of her own. The new home sales report will also be released. This metric surged 9.6% month-over-month in March 2023.
On Wednesday, the minutes from the FOMC’s meeting will be released, giving investors greater insight as to the Fed’s thinking regarding future rate hikes. The 30-year fixed mortgage rate will also be updated. It currently sits at 6.57%.
Thursday will be another busy day, with the releases of reports like jobless claims, pending home sales, and the US GDP growth rate. There will also be yet another speech from a Fed president — this time from the Boston Fed’s Susan Collins.
On Friday, another flurry of reports will be released, including personal income, personal spending, and durable goods orders. On top of that, investors will get an update on the current trade deficit, which sat at 84.6 billion in March.
Earnings
Today, Zoom (ZM) will deliver an earnings report most likely focused on – you guessed it – AI. Last March, Zoom announced a partnership with ChatGPT-owner OpenAI, following a trend across the tech sector. Recently, it also announced it’s teaming up with Anthropic, a startup in which Google (GOOGL) has invested. Zoom plans to integrate AI to improve its customer service functionality.
Tomorrow will be the busiest day of the earnings week, with reports expected from AutoZone (AZO), Lowe’s (LOW), Dick’s Sporting Goods (DKS), and Intuit (INTU). Notably, Intuit-owned TurboTax has come under fire recently after announcing a $141 million-dollar settlement for using deceptive marketing to steer low-income Americans away from free tax-filing services.
On Wednesday, Nvidia (NVDA) will report earnings from the previous quarter. As one of the largest producers of GPU chips, investors will be eager to get better insight into the company’s performance over the past few months. These chips are integral to many AI tools, and rising demand for that emerging technology has already helped Nvidia’s stock to double this year.
Thursday will round out the earnings week with reports from Costco (COST), Workday (WDAY), and Best Buy. Best Buy will face investor scrutiny after announcing a round of layoffs.
Looking for more stories like this? Check out On the Money — SoFi’s one-stop-shop for news, trends, and tips!
Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Advisor
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.
SOSS23052201