Semiconductor stocks fire up on industry leader TSMC's bullish outlook. US consumer sentiment soars to its highest since July 2021. Wayfair plans to layoff workforce. Terraform Labs files for bankruptcy. Spirits Airlines hopes for strong revenue. Macey's rejects $5.8 billion proposal to go private. All these and more in this edition of World Street.
Semiconductors power up
Stocks of semiconductor companies pushed the technology heavy NASDAQ 100 to greater highs last week. Chipmaker Advanced Micro Devices was the biggest highlight, surging over 14 percent to a record high following the bullish AI commentary and strong earnings of industry leader supplier Taiwan Semiconductor Manufacturing.
Positive news around semiconductors and the overall rise in the sector sparked a rally in other stocks such as Nvidia, KLA Corporation and Qualcomm and Applied Materials as well.
Consumer sentiment on a high
Consistent fall in inflation and rising hopes of a safe landing by the US Federal Reserve triggered a stark improvement in consumer sentiment levels, which surged to its highest level since July 2021. The University of Michigan’s Survey of Consumers released on Friday revealed a growing consumer confidence in the economy and a decline in inflation. The survey recorded a reading of 78.8 for January, its highest level since July 2021 and a 21.4 percent growth from a year ago.
Wayfair's layoff fears
Digital home goods retailer Wayfair announced plans to lay off 13 percent of its global workforce, which includes 19 percent of its overall corporate team. This move aims to streamline management layers and cut costs. This marks the company's third restructuring since 2022, with anticipated savings of approximately $280 million.
On sky high
Budget carrier Spirits Airline projects its revenue for the fourth quarter to come in on the high end of its earlier forecasts thanks to strong bookings. Spirit also estimated operating expectations to come in better than expected. The company is also exploring refinancing options for its 2025 debt maturities amid concerns over its balance sheet, reports Reuters.
Run for money
Terraform Labs, the entity behind TerraUSD, which collapsed and caused turmoil in cryptocurrency markets, has filed for Chapter 11 bankruptcy in the US Court documents submitted on January 21 reveal that the Singapore-based Terraform Labs disclosed assets and liabilities within the $100-$500 million range. Recently, a federal judge postponed the trial involving the US Securities and Exchange Commission (SEC) and the company, along with its co-founder Do Kwon, relating to an alleged $40 billion cryptocurrency fraud.
Proposal rejected
Department store operator Macy's rejected a $5.8 billion proposal from private equity firm Arkhouse Management and its partner Brigade Capital Management to take the company private. Macy's cited concerns about deal financing and valuation as reasons for the rejection.
Similar to other traditional department store operators, Macy's has faced challenges in competing with younger online rivals and peers with smaller physical store footprints. The intense competition woes faced by Macey's opened up an opportunity for Arkhouse, a real estate-focused investment firm, and Brigade, a hedge fund, to exert pressure on the company to explore a potential sale.
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