Last week, the financial market was a tale of mixed fortunes for American companies. While Apple hit $3 trillion market value and Tesla surpasses delivery targets due to price cuts, Lordstown Motors filed for bankruptcy as Walgreens closes 450 stores globally.
Perhaps the biggest news is the 6-3 decision by the US Supreme Court to strike out Biden’s student loan relief plan. Let’s have a look at the biggest news that made headlines in the financial markets last week.
Apple hits $3trn trillion in capitalization
Apple became the first U.S. company to close with a $3 trillion market valuation, as its shares finished above the threshold of $190.73 on Friday.
The tech behemoth’s stock has been on the rise in recent days, closing at record highs. The jump in its shares makes Apple worth more than five of the S&P 500’s 11 sectors, per Dow Jones Market Data.
The company previously touched the milestone intraday in January 2022, but failed to close above that level.
Lordstown Motors files for bankruptcy
One of America’s most widely celebrated electric-vehicle startups has sputtered out. Lordstown filed for bankruptcy protection, the company said Tuesday.
The filing came after talks fell through on a plan for investment partner Foxconn Technology to buy $170 million in shares of the electric-truck maker, Lordstown said.
The company was once one of the most high-profile startups to go public during the SPAC boom and was celebrated by former President Donald Trump as a savior for a closed General Motors plant in northeast Ohio. Lordstown sold the factory to Foxconn in November 2021, after the startup ran into production issues.
Walgreens to close 450 stores
Pharmacy chain Walgreens plans to close 150 of its locations in the U.S. and 300 more in the United Kingdom.
This continues ongoing cost-saving initiatives at the company, including more than 500 corporate personnel jobs being cut, Walgreens Boots Alliance Executive Vice President and global CFO James Kehoe said during the company’s third quarter earnings call Tuesday.
Store closings which are expected to occur before the end of Walgreens’ 2024 fiscal year in May 2024 are just some of the company’s cost-saving measures which the pharmacy chain is implementing.
Tesla beats Q2 delivery target
Tesla’s Q2 production and delivery numbers easily surpassed expectations as the electric vehicle (EV) company’s strategy of price cuts, combined with federal EV tax credits boost sales.
Tesla announced 479,700 worldwide deliveries and 466,140 global deliveries for the quarter. The delivery number easily exceeded Wall Street expectations of 448,599 units and the total for the previous quarter of 422,875. The second quarter’s production and delivery totals for Tesla set all-time highs.
The company’s price reductions are still boosting sales both domestically and internationally, as evidenced by Tesla’s second quarter delivery record. How severely the cuts have impacted overall profitability is still unclear, though.
Supreme court turns down Biden’s student forgiveness plan
The US Supreme Court struck out the Biden administration’s plan to forgive student loans held by 40 million Americans, ending a $430 billion program the White House considers a crucial way to cement the president’s support among younger Americans.
The 6-3 decision by strikes down a major tenet of the Biden administration’s program, with the 2024 election quickly approaching.
The court found that the state of Missouri, one of the states suing the Federal Government, at least had standing — a legal requirement that a case must demonstrate harm to the plaintiff — to file a lawsuit.
The Missouri Higher Education Loan Authority (Mohela), is one of the biggest holders and servicers of educational loans in the US.
The court determined that the debt forgiveness scheme would “cut into Mohela’s revenue, impairing its effort to aid Missouri college students” in its judgment, which was written by Chief Justice John Roberts.
US home prices post first annual decline in since 2012
In April, home prices registered their first annual price decrease in 11 years as rising mortgage rates increased the cost of home ownership for buyers.
Home prices across the country were measured by the S&P CoreLogic Case-Shiller National Home Price Index, which decreased 0.2% in April after increasing by 0.7% annually the previous month. The index experienced its first annual fall since April 2012.
According to the National Association of Realtors, the median price of an existing home decreased 3.1% from a year earlier in May to $396,100. On a seasonally adjusted basis, the index increased by 0.5% in April compared to the previous month, marking the third consecutive month of growth.
Mortgage rates spiked sharply in 2022, which led to a significant drop in home sales as purchasers withdrew from the market. According to the Federal Reserve Bank of Atlanta, the affordability of home ownership in April decreased to its lowest point since November.
Flight delays and cancellations mar 4th July celebration for United Airlines travelers
Thousands of Fourth of July travelers were once again plagued by flight delays and cancellations on Friday, with passengers of United Airlines taking the most hit.
More than 4,800 flights within the United States had delays due to thunderstorms along the East Coast, which cut off air traffic routes and caused some of the nation’s busiest airspace to become clogged, were the start of the issues.
While the majority of airlines were able to recover, United’s issues persisted throughout the week, infuriating passengers as well as staff. The airline has responded by saying it was giving travelers affected by the mass flight disruptions 30,000 MileagePlus points.
The difficult week was also among the busiest, with Friday holding the single-day record for daily screenings since the pandemic.
The Transportation Security Administration expects to screen 17.7 million people from June 29 through July 5, peaking on Friday at more than 2.8 million people.