The Week in Business: Crypto’s ‘Death Spiral’

In what some are calling a “death spiral,” a number of digital currencies plunged last week, rattling investors’ faith in crypto markets. The implosion was particularly shattering for TerraUSD, or UST, which is called a stablecoin, meaning it is pegged to a stable asset and should not fluctuate in price. But fluctuate it did: A big sell-off in cryptocurrency sent to UST for a low of 11 cents on Friday as Luna, a token closely tied to UST, cratered to $ 0. Bitcoin has been falling along with the Nasdaq, a benchmark that weighted toward technology stocks, making an investment in cryptocurrency just as risky as any other tech stock. The Crash drives home an unpleasant reality for investors – an asset they hoped would not be fulfilled in its promise.

Elon Musk said he was placing his $ 44 billion bid to buy Twitter “temporarily on hold” as he sought out more details about the sharing of spam and fake accounts on the platform, which has estimated Twitter to be about 5 percent. Mr. Musk made the announcement in an early morning tweet on Friday, following it with another that said he was “still committed” to the deal. Though trying to discern the motivations of the mercurial billionaire can be futile, Mr. Musk may be planning a tactic to drive down the cost of acquisition or thinking about backing out of the deal altogether. The latter would have been costly: Mr. Musk’s deal with Twitter includes a $ 1 billion breakup fee as well as a clause that could force Mr. Musk should pay out if he is still financing. His tweets came a day after Twitter’s chief executive fired two top executives, hiring the most new hires and saying he was spending slashing. Earlier in the week, Mr. Musk said he would allow former President Donald J. Trump to rejoin the platform.

Annual inflation has slowed in April for the first time in months, but the Consumer Price Index, which measures changes in prices for consumer goods and services, still increased 8.3 percent. That number is uncomfortably high for households that have been struggling with rising prices for essentials like food, fuel and housing for months, and it’s unpleasant news for the White House and Federal Reserve, which has been trying to stabilize the economy. The Fed may also be particularly concerned that core inflation – which strips out costs for groceries and fuel – has picked up 0.6 percent. Policymakers closely watch this measure to determine the path that inflation may take in the coming months. Its acceleration renewed concerns that the Fed would take a more aggressive approach to raising interest rates.

Coming off of its sixth consecutive weekly decline, the S&P 500 is on the edge of a bear market, with a drop of 20 percent or more from the Wall Street jargon to the index’s last peak. Although the S&P 500 rebounded on Friday, it was still just a handful of percentage points from bear market research. The Nasdaq Composite, which largely reflects the performance of tech stocks, has been well into that language since early March. This steady slide into the markets shows just how gloomy investors are about the economy. Concerns about inflation, interest rate increases and the ongoing pandemic abound, and investors may find in every new data point – like last week’s Consumer Price Index report – another reason to worry and sell to a new cause.

Retail sales are expected to rise again for a fourth consecutive month, as prices continue to climb across the country. Indeed, economists will probably attribute much of the increase in spending in April to inflation, which is still moving at its fastest pace in decades. March’s retail sales report showed that spending on gas stations increased 8.9 percent, and though prices fell in April, gas was still expected to account for a significant share of Americans’ spending. Some companies also have increased costs of producing to consumers, which they have found are largely willing to pay the higher prices.

As employers continue to think about how to attract workers, a new survey provides some helpful – and, some would say, clear – advice. Sixty-nine percent of women looking for a job said child care benefits could determine their decision on where to work, according to a study from McKinsey & Company, the consulting firm, and Marshall Plan for Moms, a campaign focused on economic participation. mothers. Almost half of mothers with young children who left the work force said they did so because of problems with child care.

Jerome H. Powell was confirmed for a second term as chair of the Federal Reserve. Instacart may go public. Disney said its streaming platform, Disney +, added subscribers, avoiding the collapse that Netflix saw weeks ago.

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