Jobless claims jumped as producer prices increased, while stocks advanced a second day. Oil inched lower, and the dollar dropped.
Jobless claims rose more than expected. The Department of Labor reported 230,000 initial jobless claims for the week ended Jan. 8, an increase of 23,000 from the prior week's revised figure and above projections of 200,000.
Producer prices rose 0.2% in December, according to the Bureau of Labor Statistics latest reading of its Producer Price Index (PPI). PPI rose 9.7% year over year, in the largest annual increase since the index was first calculated in 2010.
- The Department of Labor reported 230,000 initial jobless claims for the week ended Jan. 8, an increase from the prior week's revised figure and above projections.
- The Producer Price Index rose 9.7% year over year, in the largest annual increase since the index was first calculated in 2010.
- Delta Air Lines beat expectations for the fourth quarter but said that the omicron variant of COVID-19 will drive it to a first quarter loss.
The Dow Jones Industrial Average gained 0.3%, and the S&P 500 and Nasdaq both added 0.2%. Stocks jumped yesterday after the government reported consumer inflation rose at its fastest pace since 1982, with the S&P 500 closing about 1.5% below its all-time high. The yield on the 10-year Treasury note rose to 1.74% from 1.72% after two sessions of declines. Bitcoin and other cryptocurrencies advanced.
In Other News: Delta, Fed, KB Home
Delta Air Lines, Inc. (DAL) reported earnings, beating analysts expectations for the fourth quarter, sending its stock price up 2.7%. However, the company said that the surge of the omicron variant of COVID-19 will drive it to a first quarter loss on weaker-than-expected bookings.
Federal Reserve Governor Lael Brainard is set to tell Congress that efforts to reduce inflation represent the Fed's "most important task." Brainard, the White House nominee to serve as the Fed vice chair, will testify today before the Senate Banking Committee at her confirmation hearing.
KB Home (KBH) shares are rising after the company beat analysts' earnings expectations. The company also offered a positive outlook for 2022, reflecting its ability to charge more for homes.
More than 8,000 workers at nearly 80 King Soopers stores went on strike for better wages, as negotiations stalled. However, stores stayed open after the Colorado chain owned by The Kroger Company (KR) hired temporary staff and promoted online ordering as the union said it would strike for three weeks.
Online trading platform Robinhood Markets, Inc. (HOOD) said that it plans to move a majority of its 3,400 employees to remote work permanently, joining a slew of top tech firms embracing a hybrid culture. The California-based company said in a statement that the move to adopt a "remote first" approach will help create an accessible workplace.
California is evaluating whether Tesla, Inc.'s (TSLA) self-driving tests require regulatory oversight, following "videos showing a dangerous use of that technology" and federal investigations into Tesla vehicle crashes. The California Department of Motor Vehicles had said that Tesla's "full self-driving," or FSD, requires human intervention and therefore is not subject to its regulations on autonomous vehicles.
Quest Diagnostics Incorporated (DGX) signaled an upbeat profit outlook as COVID-19 testing volumes surged, with the spread of the omicron coronavirus variant in the U.S. Quest said that it performed over 120,000 PCR tests per day in the last couple of weeks of 2021 and over 150,000 tests per day at the beginning of this year.
TPG Goes Public
The Fort Worth and San Francisco-based firm plans to raise around $1 billion in its offering, selling nearly 34 million shares at around $29.50 each. TPG manages about $109 billion in assets and oversees over 280 portfolio companies. By comparison, Blackstone Inc. (BX) has $731 billion in assets under management, while Apollo Global Management, Inc. (APO) has $481 billion, and KKR & Co., Inc. (KKR) has $459 billion.
Public private equity firms have outperformed the S&P 500 in recent years. While the S&P 500 grew about 115% over the past five years, Blackstone's stock price climbed 445%, and KKR's rose 409%. Shares of Apollo rose 290%, and The Carlyle Group Inc. (CG) increased 268%.
The Big Number: $2.5 million
If you thought real estate prices were high, check out the metaverse. Investors are paying millions for virtual land in the metaverse, as prices for virtual real estate have soared by as much as 500%.
The most expensive spots are near where lots of virtual users gather. For instance, someone recently paid $450,000 to be Snoop Dogg's neighbor in a virtual world called the Sandbox. The CEO of Toronto-based Tokens.com, Andrew Kiguel, recently paid $2.5 million on a patch of land in Decentraland—one of several popular metaverse worlds. Republic Realm, a virtual real estate development company, spent a record $4.3 million on a parcel of virtual land in the Sandbox.
A recent report by crypto asset manager Grayscale estimates the digital world may eventually grow into a $1 trillion business in the near future. However, experts warn that investing in metaverse real estate can be highly risky. It's highly speculative, and it isn't tied to real land.