—— US Jobs Roar Again; Tesla Stock Whipsaws After News; NY Area Hit by Strong Earthquake; MicroStrategy Could Rise 10%; US Consumer Borrowing Rises; Zegna Group Profit Doubled; Instagram Generated Almost 30% of Meta’s Revenue
1. US Jobs Roar Again
In March, there was a significant increase in US payrolls, marking the most substantial rise in nearly a year, alongside a decrease in the unemployment rate, indicating a robust labor market driving the economy forward.
According to a report from the Bureau of Labor Statistics released on Friday, nonfarm payrolls surged by 303,000 last month, surpassing the expectations of economists surveyed by Bloomberg, and following an upward revision of 22,000 job gains in the previous two months.
The unemployment rate dropped to 3.8%, as more individuals entered the workforce and successfully secured employment opportunities.
In March, job expansion was primarily driven by accelerated hiring in sectors such as healthcare, construction, and leisure and hospitality, the latter of which has now surpassed its pre-pandemic level.
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2. Tesla Stock Whipsaws After News
Tesla Inc. shares rebounded from a significant decline during intraday trading following Chief Executive Officer Elon Musk’s dismissal of a report claiming the carmaker had abandoned plans for a more affordable vehicle.
The stock initially dropped by as much as 6.2% on Friday following a Reuters report suggesting the cancellation of the project, based on anonymous sources and internal company messages. However, shares recovered slightly, showing a 1.3% decrease as of 1 p.m. Friday in New York.
Musk refuted the Reuters report, stating “Reuters is lying” on X, without providing further details. In another response, he replied with an eyes emoji to a Tesla investor’s speculation that the company might be reallocating resources toward the development of a robotaxi.
Musk initially hinted at a $25,000 model during a battery-related event held by the company in September 2020.
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3. NY Area Hit by Strong Earthquake
Friday morning saw the most powerful earthquake to hit the New York area in 140 years, shaking northern New Jersey. The temblor, with a preliminary magnitude of 4.8, marked the strongest seismic activity in the region since 1884, as reported by the US Geological Survey.
Centered near Whitehouse Station, New Jersey, its effects were felt as far as Massachusetts and Washington, D.C., causing office buildings in Manhattan to tremble and prompting the halting of air traffic.
Travel disruptions rippled throughout the New York area following the earthquake, with Newark’s Liberty International Airport imposing a ground stop for flights. New Jersey Transit announced potential delays of up to 20 minutes in both directions due to bridge inspections, while Amtrak enforced speed restrictions.
Significant earthquakes are infrequent in the New York area, although a minor tremor occurred in January.
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4. MicroStrategy Could Rise 10%
Analysts at BTIG believe that MicroStrategy Inc.’s remarkable 150% surge, fueled by its significant investment in Bitcoin, has the potential to continue climbing amidst the cryptocurrency’s ongoing rally.
Andrew Harte, an analyst at BTIG, raised his price target to $1,800 on Friday, suggesting that the shares could see a further increase of at least 10% based on recent trading trends. This new target is more than double his previous estimate of $780.
Over the past month, MicroStrategy’s stock has significantly outperformed Wall Street’s projections, driven by its substantial holdings of over 214,000 Bitcoin as of March 18. The company’s stock has closely followed the upward trajectory of the leading digital asset, even surpassing its gains. However, the price targets set by the four analysts monitored by Bloomberg still lag behind the stock’s intraday peak of $1999.99 reached in March.
The eagerly awaited Bitcoin halving event, known for decreasing the token’s new supply, is anticipated to occur in late April. Historically, this event has had a tendency to boost the price of the cryptocurrency.
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5. US Consumer Borrowing Rises
In February, consumer borrowing in the US saw an uptick, primarily fueled by the most substantial increase in credit card balances in three months. Federal Reserve data released on Friday revealed a $14.1 billion rise in total credit, following a revised gain of $17.7 billion in January. The Bloomberg survey of economists had forecasted a $15 billion increase.
Specifically, revolving credit, which encompasses credit cards, surged by $11.3 billion in February, while non-revolving credit, covering loans for vehicle purchases and school tuition, saw a $2.9 billion increase. These figures are not adjusted for inflation.
Despite robust job growth propelling household spending, there’s a concerning trend of mounting credit card balances among consumers. Given that accounts with higher interest rates and larger monthly payments are consuming a larger portion of their paychecks, these borrowers could face risks should the economy or labor market weaken.
According to the Fed’s report, the interest rate for credit cards currently stands at 22.63%, significantly higher than the pre-pandemic rate of under 17%.
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6. Zegna Group Profit Doubled
Profits at the Ermenegildo Zegna group soared last year as demand for the Italian luxury company’s menswear and accessories surged, bucking the trend of a broader slowdown in the industry.
The Milan-based group, known for its brands including the eponymous Zegna, Thom Browne, and Tom Ford’s fashion arm, announced on Friday that its net profit in 2023 more than doubled to €135.7 million compared to €65.3 million in 2022. Revenue for the period rose by 27% to just under €2 billion.
The company attributed its strong profits primarily to the performance of its Zegna and Thom Browne brands. Key sellers included Zegna’s triple stitch luxury trainers, which start at over €800, and Thom Browne’s flagship short-trousered men’s suit.
Gildo Zegna, the company’s Chief Executive and the founder’s grandson, described it as a “milestone year”.
Source: Financial Times – Ermenegildo Zegna group’s profits double defying wider luxury slowdown
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7. Instagram Generated Almost 30% of Meta’s Revenue
According to court filings, Meta Platforms Inc. garnered nearly 30% of its revenue from Instagram in the first half of 2022, revealing, for the first time, the significant financial contribution of the popular photo and video service.
In 2020, Instagram generated $22 billion, accounting for 26% of Meta’s total sales, as per documents disclosed in the Federal Trade Commission’s antitrust lawsuit aimed at dismantling the company. By 2021, Instagram’s revenue surged to $32.4 billion, constituting 27% of Meta’s overall business. In the initial six months of 2022 alone, the app brought in $16.5 billion.
These figures underscore Instagram’s rapid growth compared to other segments within Meta’s social networking portfolio. They also highlight the financial success of Chief Executive Officer Mark Zuckerberg’s acquisition of the app for just $715 million in 2012.
On Friday, Meta requested a judge to dismiss the FTC’s case before trial, arguing that the agency has failed to demonstrate how its acquisitions of Instagram and WhatsApp have harmed consumers.
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The content of this article comes from various financial news media such as The Wall Street Journal, Financial Times, and Bloomberg.