The Week in Business: Meta Changes
What’s Up? (May 29-June 4)
Sheryl Sandberg Leans Out
Sheryl Sandberg announced Wednesday that she was stepping down as chief operating officer of Meta after 14 years with the company. In that time, Facebook, as it was formerly known, grew into a behemoth, acquiring dozens of companies and extending its influence across the internet. Ms. Sandberg built her personal brand alongside the company, publishing “Lean In,” her best-selling 2013 book about how to succeed as a woman in the workplace. But Ms. Sandberg’s reputation suffered as Facebook faced backlash for its role in the spread of misinformation during the 2016 election, the data breach involving Cambridge Analytica and other scandals. And many of the women who once subscribed to Ms. Sandberg’s philosophy grew disillusioned as they discovered that “leaning in” did not bring about the raises and promotions she spoke of. Ms. Sandberg will remain on Meta’s board.
Increasing Oil Supplies
After announcing only modest increases in oil supplies at recent meetings, OPEC Plus agreed on Thursday to raise production by 648,000 barrels a day in July and again in August – about 50 percent higher than the monthly rise set under a program last year. Biden administration officials said on Thursday that President Biden would visit Saudi Arabia, the world’s largest oil producer and the de facto leader of OPEC Plus, in what appeared to be a move toward thawing relations (though he said on Friday that he had no direct plans at the moment ”to do so). The large increase in production is unlikely to cause gas prices to fall, but some analysts say OPEC Plus’s decision to break from its scheduled increases in output could be a sign of more cooperation from the Saudis and from other countries, like the United Arab Emirates, as Western sanctions on Russia continue to squeeze global supplies.
Another Strong Jobs Report
Jobs stretched into their 17th consecutive month of gains, with the Labor Department reporting on Friday that employers added 390,000 jobs in May. The report showed the unemployment rate hovering at 3.6 percent, while average hourly earnings for employees rose 0.3 percent on a monthly basis and were 5.2 percent higher than a year earlier. These are somewhat tricky numbers to parse. Because the Federal Reserve is looking for growth to slow – which would be an indication that its efforts to cool the economy and tame inflation were starting to work – another month of strong jobs is not so reassuring. May’s job numbers were lower than April’s, and wages eased slightly, which are both encouraging signs. But the new data suggests that Fed officials have much more work to do.
What’s Next? (June 5-11)
SPACs Fall Out of Favor
Special purpose acquisition companies, known best by their acronym, are no longer as hot as they used to be, and a recent spate of failed SPAC mergers have raised serious doubts about their future. Last week, Forbes Media became the latest company to reverse its plans to merge with a SPAC, a move that effectively creates a shell company for investors to buy shares as part of a shortcut to taking a company public. SPACs were appealing when prices were tame and interest rates low. But now that market conditions have shifted, a SPAC can seem more risky, and many investors have been pulling their money. SPACs were also attractive because they helped businesses avoid the scrutiny a company comes under when it has an initial public offering. Recently, however, regulators at the Securities and Exchange Commission have begun dozens of investigations into SPACs and are proposing stricter rules, which could further dampen enthusiasm.
New Apple Products?
Apple’s annual Worldwide Developers Conference will reconvene this week to showcase the company’s latest products. The keynote – always the most hyped part of the conference – will take place on Monday, and Apple is expected to unveil its next mobile operating system, iOS 16, which includes changes to notifications, messaging and the lock screen. Details about the new iPhone 14 have begun to leak in recent weeks, but Apple is not likely to discuss those at the conference – the company typically releases its latest iPhones in the fall. Some fatigue and skepticism have begun to surround Apple’s events as upgrades to products have become more modest and the company battles antitrust litigation and concerns about user privacy.
Fresh Inflation Data
After last week’s job report, Fed officials will be looking to the Consumer Price Index on Friday to create a fuller picture of where the economy is headed. In April, inflation showed some signs of slowing, but the takeaway was complicated: Though annual inflation moderated for the first time in months, a closely watched measure accelerated. In this week’s report, consumer prices are expected to continue their climb, with economists in a Bloomberg survey forecasting a pace of 8.3 percent over the year through June. But more so than this annual number, the Fed is keeping an eye on the monthly core inflation number – which strips out the costs of food and fuel because of their volatility – and economists are expecting a small deceleration in that measure.
The Biden administration announced that it would forgive 5.8 billion in student loans for borrowers who attended Corinthian Colleges. Elon Musk said employees at Tesla and SpaceX must return to the office a minimum of 40 hours a week. Facebook will change its stock ticker symbol to META this week.