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

In what some are calling a “death spiral,” the value of several digital currencies plunged last week, shaking investors’ faith in crypto markets. The implosion was particularly devastating for TerraUSD, or UST, which is called a stablecoin, meaning it is pegged to a stable asset and its price should not fluctuate. But it fluctuated: A huge sell-off in a sister cryptocurrency sent UST to a low of 11 cents on Friday as Luna, a token closely tied to UST, fell to $0. Bitcoin has been falling alongside the Nasdaq, a benchmark that skews toward tech stocks, making an investment in crypto as risky as any other tech stock. The The crash highlights an ugly reality for investors: that an asset they hoped would be transformative hasn’t delivered on its promise.

Elon Musk said he was putting his $44 billion bid to buy Twitter “temporarily on hold” as he sought more details about the share of spam and fake accounts on the platform, which Twitter has estimated at around 5 percent. Musk made the announcement in a Friday morning tweet, followed by another saying that he was “still committed” to the deal. Although trying to discern the mercurial billionaire’s motivations may be futile, Musk may be implementing a tactic to lower the price of the acquisition or consider pulling out of the deal altogether. The latter would be expensive: Musk’s deal with Twitter includes a $1 billion breakup fee, as well as a clause that could force Musk to pay the deal if he still has the financing. His tweets came a day after Twitter’s chief executive fired two top executives, put a freeze on most new hires and said he was cutting costs. Earlier in the week, Musk said he would allow former President Donald J. Trump to rejoin the platform.

Annual inflation slowed in April for the first time in months, but the Consumer Price Index, which measures changes in the prices of consumer goods and services, still rose 8.3 percent. That number is uncomfortably high for households that have been battling rising prices for essentials like food, fuel and housing for months, and it’s unwelcome news for the White House and the Federal Reserve, which have been trying to stabilize the economy. The Fed may have been especially concerned to see core inflation, which strips out food and fuel costs, rise 0.6 percent. Policymakers are watching this measure closely to determine the path inflation may take in the coming months. Its acceleration renewed concerns that the Fed would take a more aggressive approach to raising interest rates.

After its sixth consecutive weekly decline, the S&P 500 is on the verge of a bear market, Wall Street parlance for a drop of 20 percent or more since the index’s last peak. Although the S&P 500 rallied on Friday, it was still just a handful of percentage points out of bear market territory. The Nasdaq Composite, which largely mirrors the performance of tech stocks, has been in that territory since early March. This steady decline in the markets shows how pessimistic investors have become about the economy. Concerns about inflation, interest rate hikes and the ongoing pandemic abound, and investors may find each new data point, such as last week’s Consumer Price Index report, another cause for concern. and a new reason to sell.

Retail sales are expected to return to growth for the fourth straight month as prices continue to rise across the country. In fact, economists will likely attribute much of April’s spending increase to inflation, which continues to advance at its fastest pace in decades. The March retail sales report showed that spending at gas stations rose 8.9 percent, and although prices fell in April, gasoline is likely to continue to account for a significant portion of Americans’ spending. Some companies have also passed on higher production costs to consumers, who they have found are largely willing to pay higher prices.

As employers continue to think about how to attract workers, a new survey provides some helpful and, some would say, obvious advice. Sixty-nine percent of women job seekers said child care benefits could shape their decision about where to work, according to a study by McKinsey & Company, the consulting firm, and Marshall Plan for Moms, a campaign focused on engagement. economy of mothers. mothers Nearly half of mothers with young children who left the workforce said they did so because of childcare problems.

Jerome H. Powell was confirmed for a second term as Chairman of the Federal Reserve. Instacart may go public. Disney said its streaming platform, Disney+, added subscribers, averting the meltdown Netflix experienced weeks ago.

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