KEY TAKEAWAYS

• Hyatt Hotels reported higher-than-expected second-quarter profit as revenue per available room (RevPAR) gained.
• Comparable system-wide hotels RevPAR increased 4.7% year-over-year, higher than expectations of a 4.0% gain from analysts polled by Visible Alpha.
• Earnings per share (EPS) of $3.46 easily surpassed analysts’ estimates, but revenue of $1.7 billion missed and the company lowered the top end of its full-year RevPAR outlook.

Hyatt Hotels (H) reported higher-than-expected second-quarter profit as revenue per available room (RevPAR) gained.

Comparable system-wide hotels RevPAR increased 4.7% year-over-year to $149.31, higher than forecasts of a 4.0% gain from analysts polled by Visible Alpha.

Earnings per share (EPS) of $3.46 easily surpassed analysts’ estimates, but revenue of $1.7 billion missed and the company lowered the top end of its full-year system-wide hotels RevPAR outlook, now seeing growth of 3% to 4% from its prior forecast of 3% to 5%.

Hyatt Expanded Global Footprint During Q2

Hyatt said it added 18 new hotels, amounting to 3,251 rooms, during the second quarter, among them Park Hyatt Changsha in China and The Legend Paracas Resort in Peru. 

Hyatt shares edged lower to $133.33 as of noon ET Tuesday. They are 2% higher this year.

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KEY TAKEAWAYS

• Japanese stocks closed 10% higher after tanking 12% Monday, their worst day since 1987.
• U.S. stock futures are rising and paring some of their losses from Monday, when the potential recession fears and worries about the scale of AI spending by tech giants.
• Still, Wall Street’s “fear gauge,” the VIX index of implied stock market volatility, remains elevated.

Japanese stocks closed 10% higher Tuesday after tanking 12% yesterday, their worst day since 1987.

Japan’s Nikkei index, whose slide following Friday’s weak soft U.S. jobs report triggered Monday’s global rout, notched its best single-day performance in percentage terms since the average closed up more than 14% on Oct. 14, 2008.

U.S. stock futures also are bouncing back and paring some of their losses from Monday, when fears of a potential recession and worries about the scale of tech giants’ spending on artificial intelligence (AI) initiatives led stocks to post their biggest one-day declines in nearly two years.

Mag 7 Stocks Retrace Some of Their Losses

Magnificent Seven shares are also recovering somewhat in premarket trading, with chip maker Nvidia (NVDA) rising about 3% despite reports its latest generation Blackwell chip will be delayed and that Chief Executive Officer (CEO) Jensen Huang offloaded more stocks in July.

The 10-year Treasury yield has now risen to 3.84% after falling to below 3.70% on hopes of an aggressive rate-rising path by the Federal Reserve. Monday’s rout had increased investors’ bets that the Fed may enact an emergency rate cut before its next meeting in September, although many analysts said that was unlikely.

“We expect the Federal Reserve to continue on its expected path, with a panic-driven response being unlikely,” Bjoern Jesch, Global Chief Investment Officer (CIO) of asset manager DWS, said in a note Tuesday. “A 50 basis points (bps) cut or an inter-meeting cut would signal a significant shift in policy, which we believe the Fed will try to avoid.”

Volatility Remains Elevated

Still, Wall Street’s “fear gauge,” the VIX index of implied stock market volatility, remains elevated, showing investors remain nervous after Monday’s dramatic declines.

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KEY TAKEAWAYS

• Recent research revealed that three in five Americans believe the U.S. is in a recession and has been for quite some time, even though the economy hasn’t experienced a recession since 2020.
• Many cite financial troubles with their family and friends as to why they believe the economy is in a recession.
• Rising unemployment rates, downbeat economic activity reports and worrying consumer confidence levels do point to a slowing of the economy.

Recent research revealed that three in five Americans erroneously believe the U.S. is in a recession and has been for quite some time.

The biggest reason cited for that belief by respondents in the survey, which was sponsored by buy now, pay later company Affirm (AFRM), was inflation and cost of living. Respondents also pointed to complaints from friends and family about money, as well as friends cutting down on spending or falling behind on credit card debt.

On average, survey respondents said they believe that the recession started in March 2023 and will last about another year, while nearly 70% of survey respondents said inflation is affecting their plans. Many have had to rethink their financial futures, such as the amount that they are able to save and if they can afford upcoming purchases, Affirm said.

US Hasn’t Been in Recession Since 2020

The U.S. hasn’t experienced a recession, as defined by the National Bureau of Economic Research (NBER), since early 2020 at the onset of the Covid-19 pandemic. The NBER defines a recession as “a significant decline in economic activity that is spread across the economy and lasts more than a few months.”

In the just-completed second quarter, a key measure of economic activity, gross domestic product, grew at an annualized rate of 2.8%, double the 1.4% rate of the first quarter and far above economists’ expectations.

Nonetheless, the fear that a paycheck isn’t going as far as it used to isn’t unfounded, as inflation has increased the cost of living by more than 21% since 2020, according to the Consumer Price Index. Meanwhile, other recent data has shown that economic activity is slowing, while unemployment is on the rise.

Indicators Point to Slowing Economy

On Friday the Bureau of Labor Statistics reported that U.S. employers added far fewer jobs than expected in July, while the jobless rate rose to 4.3%, its highest level since 2021. The jump in unemployment last month was high enough to trigger the Sahm Rule, a reliable warning sign that has predicted every recession since 1970.

Another recent indication of a possible recession was government data for July that that showed consumer feelings about the current economy hitting a three year low while their future expectations improved.

“More consumers expect future business and labor market conditions to deteriorate near term than the opposite,” wrote Moody’s Analytics’ Justin Begley. “As a result, consumers are indicating an intention to hold off on purchasing plans. If actualized, this could meaningfully cut into real consumption and economic growth.”

Other indicators in recent years have also pointed to a looming recession, only to be proven wrong.

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Recent Weakness May Have Presaged Monday’s Pullback in Stocks

Key Takeaways

• Prices for a wide range of commodities joined Monday’s global stock market freefall.
• Unlike stocks, commodity markets have declined broadly for the past month.
• The commodities market weakness reflects concerns about slowing global growth and weakening demand for physical goods.

Commodities ranging from oil to copper joined Monday’s global stock market freefall, extending recent weakness that may have foretold the current sell-off in equities.

Brent crude, the global oil benchmark, for September delivery fell as much as 2.1% to an eight-month low of $75.18 per barrel Monday morning before recovering somewhat in the afternoon. Brent has dropped about 14% in the past month.

Other commodities also declined Monday. Prices for copper, a key material used in construction and electronics, declined as much as 4% early in the day. Live cattle prices initially fell 3%, coffee prices dropped 4%, and even gold—long considered a safe haven for investors in times of financial turbulence—fell more than 2% before regaining some ground later Monday.

Did Commodities Forecast a Fall?

Unlike stocks, which spent the first half of July at record highs before slipping, broad commodity markets have been headed lower for the last month. The S&P GSCI Index, a compilation of 24 different commodity prices, has plunged nearly 10% in that period. The index recorded just nine positive days in July.

Simply put, concern about weakening demand for the physical goods that drive the world’s economy—fuel, industrial metals, agricultural products—explains falling commodity prices in recent weeks.

Economists often look to commodity markets as a leading indicator of the broader global economy’s health. Worries about slowing global growth, and that the Federal Reserve may have waited too long to cut interest rates, now finally have rattled equity investors.

Not coincidentally, commodities began declining after the U.S. government released its June employment report on July 5. That report revealed a softening U.S. jobs market and included downward revisions to job growth from the previous two months.

Concerns about slowing global economic growth intensified Friday with the release of July’s U.S. employment data, which showed that the nation’s unemployment rate unexpectedly rose to its highest level in three years.

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Key Takeaways

• Bitcoin briefly fell below $50,000 Monday as market sell-pff spread to crypotcurrencies leading to $1.2 billion in crypto liquidations.
• Ether, Solana, and other alternative crypto assets are down even more than bitcoin.
• Despite bitcoin’s aspirations to be a safe-haven asset, its recent price movements show that it’s still operating as a risk-on asset today.

Bitcoin (BTCUSD) briefly plummeted below $50,000 Monday for the first time since February as U.S. economic fears spread the market rout beyond stocks, leading to about $1.2 billion in crypto liquidations over the past 24 hours.

It’s been a roller-coaster ride for bitcoin investors. This morning’s low was nearly 30% below the $70,000 price level bitcoin hit exactly a week ago. The largest cryptocurrency by market cap recovered somewhat, trading above $54,000 early Monday afternoon.

Bitcoin ETFs, Altcoins, Crypto-Related Stocks Tumble

As the stock market began to crumble Friday, nervous investors fulled out $237.4 million from spot bitcoin exchange-traded funds (ETFs), according to data from Farside Investors.

As is usually the case during crypto price declines, alternative crypto assets are down even more than bitcoin. Ether (ETHUSD) is down 24% over the past week, while Solana (SOLUSD) is down 28%.

Crypto-related stocks felt the double whammy of selling pressure from both the stock and the crypto markets. Shares of MicroStrategy (MSTR), one of the largest corporate holders of bitcoin, fell 9% while those of Block (SQ) and Coinbase (COIN) declined 2% and 5%, respectively.

Bitcoin miner stocks traded lower, too. Cleanspark (CLSK) was 11% lower, Hut 8 (HUT) was down 7%, Marathon Digital (MARA) declined 5%, while Riot Platforms (RIOT) fell 3%.

Bitcoin Drawdowns Not Uncommon

It’s not uncommon for bitcoin to have multiple large price drawdowns in bull markets following halving events such as the one that recently took place in April. Despite bitcoin’s intention to operate as a safe haven, its recent selloff along with the equities market indicates it’s still trading as a risk-on asset during times of global market uncertainty.

Still, that’s not enough to shake the confidence of some long-term bitcoin bulls.

“People smash the sell button for liquid assets during broad-based panics,” Bitwise Chief Investment Officer Matt Hougan posted on X. “But from my seat, today’s events play into the long-term story for bitcoin.”

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Bitcoin Suffers Largest Weekly Decline Since November 2022

Key Takeaways

• Bitcoin selling continued over the weekend, with the cryptocurrency plummeting nearly 15% over the last week, its largest seven-day decline since the collapse of bankrupt crypto exchange FTX in November 2022. The sharp downturn carried over into Monday’s Asian session, taking bitcoin to its lowest level since February.
• Bitcoin liquidations have tallied nearly $200 million over the past two days, their highest level since early July.
• The cryptocurrency’s price has broken down from a wedge pattern early in Monday’s Asian trading session, indicating lower prices.
• Bitcoin’s price will likely gain interest at key chart levels including $56,000, $47,000, $40,000 and $35,000.

Bitcoin (BTC) selling continued over the weekend, with the cryptocurrency plummeting nearly 15% over the last week, its largest seven-day decline since the collapse of bankrupt crypto exchange FTX in November 2022. The sharp downturn carried over into Monday’s Asian session, taking bitcoin to its lowest level since February.

The digital asset has come under pressure over the last week as investors abandon risk-on bets amid escalating tensions in the Middle East and employment data indicating that the U.S economy may be slowing more than previously thought.

On the trading front, crypto analytics site Coinglass showed Bitcoin liquidations for long positions tallying nearly $200 million over the past two days, their highest level since early July, adding further downward pressure as brokers forcibly close over-leveraged trades arising from recent price fluctuations.

Below, we take a closer look the legacy cryptocurrency’s chart and use technical analysis to identify key price levels that may come into play amid ongoing selling.

Breakdown From Wedge Pattern

Since topping out in mid-March, the pioneer cryptocurrency has oscillated within a wedge-like pattern, a chart formation that consists of two converging trendlines connecting a series of respective lower highs and higher lows. Typically, a wedge represents consolidation in an asset’s price before a trending move in the direction of an eventual breakout.

Indeed, the price has broken below the pattern’s lower trendline early in Monday’s Asian session, a move that could lead to further falls in the week ahead. Moreover, the 50-day moving average sits poised to cross below the 200-day moving average to form an ominous death cross, a signal that predicts lower prices.

Monitor These Key Chart Levels Amid Further Selling

Amid further selling in Bitcoin, investors should monitor four areas on the chart likely to remain in focus.

Firstly, it’s worth watching if bulls can defend the wedge pattern’s lower trendline, which currently sits around $56,000. An intraday reversal to reclaim this level on Monday could suggest a possible bear trap.

However, a decisive volume-backed breakdown below the pattern could see a fall to $47,000, a location on chart where the price could encounter support near the January peak that formed as part of Bitcoin’s trending move between September 2023 and March this year.

Ongoing selling could see the price revisit $40,000, a location where buyers may seek entry points near the prominent January swing low.

Finally, a larger sell-off could trigger a drop to $35,000, where the cryptocurrency would likely find support from a period of price consolidation between late October and mid-November last year, shortly after the price climbed back above the 200-day MA.

The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more info.

As of the date this article was written, the author does not own any of the above securities.

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Key Takeaways

• Shake Shack’s earnings earlier this week showed its sales surged from a year ago.
• A number of its burger-selling rivals like McDonald’s, however, have struggled with customers pulling back on spending and introduced value meals to drive sales in recent months.
• Shares of Shake Shack have climbed along with its sales, up 30% from the start of the year through Friday’s close, while shares of McDonald’s, Wendy’s, and Burger King parent Restaurant Brands International slumped.
• Analysts and Shake Shack executives cited the narrowing price gap between fast-food and “fast-casual” chains like Shake Shack and Chipotle as a contributing factor driving sales to the latter.

Shake Shack’s (SHAK) sales have surged this year, boosting its stock price, while some of its burger-selling rivals like McDonald’s (MCD), Wendy’s (WEN), and Burger King of Restaurant Brands International (QSR) have struggled with customers pulling back on spending.

Shake Shack reported earlier this week that its sales jumped 16% in the second quarter from a year earlier, in another strong quarter for the burger chain after posting a double-digit jump in sales in the first quarter.

By contrast, McDonald’s reported last week that its same-store sales dropped year-over-year, as the company said it has continued to see a pullback in discretionary spending by consumers.

The fast-food giant and others have leaned into value in recent months to boost sales, with some success. Wendy’s recently reported a small increase in same-store sales, though its revenue missed estimates. Meanwhile, Burger King’s results have started to improve amid a turnaround campaign of advertising and restaurant renovations.

Value Proposition of Dining Out Shifts in Shake Shack’s Favor

Analysts have suggested that fast-casual chains with traditionally higher prices like Shake Shack, Chipotle (CMG), and Sweetgreen (SG) are benefitting from improving perceptions of the value of their offerings after a faster rise in fast-food prices narrowed the price gap between the two categories.

That trend could persist, with Baird analysts writing Thursday that Shake Shack reported positive same-store sales and foot traffic for the start of the third quarter in July amid “extreme discounting activity” by competitors like McDonald’s.

Shares of Shake Shack soared on its strong earnings results earlier in the week, before a weaker-than-expected jobs report and concerns about the economy drove a broad-based sell-off Friday that sent Shake Shack shares nearly 6% lower in a single session.

However, even with Friday’s losses, Shake Shack shares have gained 30% from the start of the year through Friday’s close. Shares of McDonald’s have lost close to 7% over the same period, while Burger King parent Restaurant Brands International fell 10%, and Wendy’s dropped over 13%.

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Warren Buffett’s Berkshire Hathaway (BRK.A, BRK.B) updated investors on its second-quarter financial results Saturday, revealing its cash pile rose to a record high as it made more cuts to its stake in Apple (AAPL), while its operating profit surged as its insurance underwriting business made gains, and more.

Berkshire’s Cash Pile Rises to a Record $276.9 Billion

Berkshire’s cash and U.S. Treasury holdings rose to another record high in the second quarter at $276.9 billion, with $234.6 billion of that in Treasury bills. In the first quarter, the company’s cash pile totaled $189 billion. 

Buffett has been a longtime fan of Treasurys, calling them “the safest investment there is” at Berkshire’s annual meeting in May, though the massive size of Berkshire’s growing reserve has raised speculation about how the company might eventually deploy it—or keep adding to it, with Treasury bill yields over 5%. 

While the firm could move to expand its portfolio, Buffett suggested earlier this year that few candidates in the U.S. satisfy Berkshire’s criteria, with “essentially no candidates” elsewhere, saying “things aren’t attractive.”

The rise in Berkshire’s cash pile came as it said it sold $75.5 billion worth of stock in the quarter. The company used $345 million to buy back Berkshire stock. 

Berkshire Slashes Its Stake in Apple Further

After trimming its stake in Apple by about 13% in the first quarter, Berkshire cut its stake further, reporting that its Apple holdings were valued at $84.2 billion at the end of the second quarter, suggesting it sold about 390 million shares or nearly half its stake. 

Berkshire also lowered its stake in Bank of America (BAC). While not reflected in Saturday’s report, Berkshire continued trimming its stake in Bank of America in July, recent filings showed. 

Berkshire retains significant stakes in Apple and Bank of America despite the cuts, with the two stocks still representing its top holdings, though Berkshire’s selling spree over the last few quarters has raised speculation Buffett may be concerned about the market becoming overheated or raising cash for successors. 

Back in May, Buffett had suggested earlier sales of Apple stock came as Berkshire was building its cash position, and said it’s “extremely likely” Apple would still be Berkshire’s largest holding at the end of 2024. 

Operating Income Surges Over 15% as Insurance Business Improves

Berkshire’s operating income, which Buffett has said provides a better picture of the health of the company’s businesses than net income, came in at $11.6 billion, up from $11.2 billion in the first quarter, and $10 billion a year earlier. 

Nearly half of the gains in Berkshire’s operating income came from underwriting and investments in Berkshire’s insurance businesses as claims costs and catastrophe claims eased. Berkshire’s BNSF Railway and Berkshire Hathaway Energy utility businesses weighed on results. 

Berkshire Hathaway’s Class B shares have outperformed the S&P 500 so far this year, up about 20% since the start of the year, at $428.36 as of Friday’s close.

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Investors Are Looking for Signs That AI Spending Is Paying Off

Key Takeaways

• Reactions to earnings from Meta, Amazon, Microsoft, and Apple in recent days suggested it may be getting more difficult for big tech companies to impress investors eager to see clear signs that spending on artificial intelligence is paying off.
• Meta shares gained after the social media giant highlighted how early gains from AI to optimize user engagement benefit its ad business, along with its plans to boost investments in the tech.
• Microsoft’s cloud-growth miss sent shares lower, with investors seemingly unimpressed by the company’s potential for future AI gains.
• Amazon shares tumbled on its weak sales outlook, while the e-commerce giant, like its cloud provider peer, Microsoft, outlined its position to benefit in the AI era.
• Reception to Apple’s earnings beat was lukewarm amid anticipation for the iPhone 16 and AI release expected in the fall.

Artificial intelligence (AI) was a key focus of earnings reports from big tech companies over the past week, with reactions to results from Meta Platforms (META), Amazon (AMZN), Microsoft (MSFT), and Apple (AAPL) suggesting it might be getting harder for big tech to wow investors with their AI plans.

Many of the companies have ramped up spending on AI, raising concerns about AI’s costs, and stock moves after the latest earnings this week indicate some have had greater success than others in convincing investors.

Meta’s Early AI Gains Ease Worries About Spending

Meta shares gained after the company announced better-than-expected results and CEO Mark Zuckerberg highlighted its advances in AI.

This week, the company lifted the lower end of its capital expenditures (CapEx) guidance for the full year to $37 billion from $35 billion, while maintaining the high end at $40 billion. Meta also said it plans to increase CapEX further in 2025. Last quarter, Meta shares had tumbled after the company reported earnings amid worries about overspending to invest in AI.

However, investors seemed less concerned with Meta’s multi-billion dollar AI spending as Zuckerberg reported early gains from the tech. The company said it is leveraging AI to improve recommendations for social content and ads on its platforms to optimize user engagement and make ads “more effective,” benefitting Meta’s ad business.

Microsoft, Amazon Shares Fall Amid Growth Concerns

By contrast, weaker-than-expected growth in Microsoft’s cloud segment overshadowed its earnings beat, sending shares lower.

On the company’s earnings call, CFO Amy Hood said AI-related capacity falling short of demand held back Microsoft’s cloud gains. CEO Satya Nadella said that the company is investing in AI based on demand signals, and expects AI spending will help Microsoft raise capacity to meet demand in the second half of fiscal 2025.

Amazon shares also fell after the e-commerce giant missed revenue estimates and issued weak guidance for the coming quarter. Company executives highlighted Amazon’s position to gain from Amazon Web Services (AWS) customers preparing their cloud infrastructure for generative AI (GenAI) opportunities, but it wasn’t enough to boost enthusiasm for the stock.

Apple Investors Waiting on iPhone 16 and Apple Intelligence Launches

Apple shares made slight gains Friday, a day after its earnings beat estimates as investors wait for the expected release of the iPhone 16 and Apple Intelligence in the fall.

CEO Tim Cook said that Apple’s AI features, which were unveiled in June, will come to users in staggered launches, rather than in one software update, with ChatGPT integration coming to iPhones by the end of the calendar year.

Apple’s introduction of AI features has raised expectations they could spur an accelerated upgrade cycle as the company’s record-high install base could upgrade to newer devices to access Apple Intelligence.

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Key Takeaways

• A U.S. District Court judge threw out a jury’s award of $4.7 billion in damages against the NFL.
• The lawsuit alleged the NFL inflated prices of its “Sunday Ticket” package, which is fans’ only option to watch out-of-market games.
• The judge found that certain expert witness testimony was inadmissible and thus could not be considered.

A federal judge has nixed a jury’s verdict against the National Football League that found the league overcharged customers for its “Sunday Ticket” package.

Los Angeles-based U.S. District Court Judge Philip Gutierrez ruled Thursday that the jury’s $4.7 billion award to subscribers should be thrown out due to inadmissible expert witness testimony, without which “no reasonable jury” could have reached a verdict against the NFL. 

“Sunday Ticket”—for decades distributed by satellite provider DirecTV and since last season carried by streaming service YouTube TV, a division of Alphabet’s (GOOGL) Google—is the only option for viewers to watch NFL games outside their local broadcast market or on national television. DirecTV was not party to the lawsuit, which covered the 2011-2022 seasons.

‘Irrational Damages’

Gutierrez said the court would have vacated the jury’s award anyway, calling it “irrational damages.” The jury awarded $4.6 billion in conjunction with 24.1 million residential “Sunday Ticket” subscriptions and another $96.9 million related to 506,788 commercial subscriptions during the 12 NFL seasons covered in the suit. 

“We are grateful for today’s ruling in the Sunday Ticket class action lawsuit,” the NFL said Thursday night. “We believe that the NFL’s media distribution model provides our fans with an array of options to follow the game they love, including local broadcasts of every single game on free over-the-air television.”

The judge’s decision can be appealed to the 9th U.S. Circuit Court of Appeals in San Francisco.

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