5 Things to Know Before Markets Open

News of the day for Feb. 23, 2023

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The government's latest estimate of economic growth comes in higher than expected, Meta plans more layoffs, and Nvidia shares surge after reported its revenue forecast for the current quarter came in above expectations. Here’s what investors need to know today.

1. The Economy Grows Faster Than Expected

In its second estimate of fourth quarter gross domestic product (GPD), The Bureau of Economic Analysis reported the economy grew at an annual rate of 2.7%, compared to projections of 2.5% after rising 3.2% in the third quarter. Separately, the Labor Department reported initial jobless claims for state unemployment benefits fell by 3,000 to 192,000 in the latest week ended Feb. 18. Economists had expected them to increase.

2. Nvidia Forcasts AI Boom, Shares Rise

Nvidia (NVDA) shares surged 8% after the chipmaker reported its revenue forecast for the current quarter came in above expectations. In a statement, Nvidia CEO Jensen Huang said “AI is at an inflection point, setting up for broad adoption reaching into every industry. From startups to major enterprises, we are seeing accelerated interest in the versatility and capabilities of generative AI.” Shares are up 45% so far this year.

3. Meta Platforms Plans More Layoffs

Meta Platforms is reportedly planning a fresh round of job cuts that could affect thousands of workers. That follows last year’s job cuts of more than 11,000 employees or 13% of its workforce as its costs soared and Meta faced a weak ad market.

4. Tesla Will Move Its Global Engineering Headquarters to California

CEO Elon Musk and California Governor Gavin Newsom announced Tesla will make its global engineering headquarters in California. Tesla had moved its corporate headquarters from Silicon Valley to Austin, Texas in December of 2021.

5. Dan Loeb's Third Point Will Launch a Proxy Fight at Bath & Body Works

Dan Loeb’s Third Point hedge fund will launch a proxy fight at Bath & Body Works (BBWI) to address what the activist investor says is excessive executive pay and lagging financial performance. Third Point revealed its 6% stake in the company in December.

Article Sources
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  1. U.S. Bureau of Economic Analysis. “Gross Domestic Product, Fourth Quarter and Year 2022 (Second Estimate).”

  2. Wall Street Journal. “Nvidia Forecasts AI Boom, Recovery in Videogame Business After Slump.”

  3. Washington Post. “Meta plans to layoff thousands, after Zuckerberg said no more job cuts.”

  4. The Verge. “Tesla announces new engineering headquarters in California.”

  5. Barron’s. “Activist Investor Dan Loeb’s Third Point Plans Proxy Fight at Bath & Body Works.”

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