Good Evening. U.S. stocks ended a four-week winning streak on Friday as the summer rally lost steam and all three indexes closed lower for the session and the week.
The Nasdaq was down 2.01%, while the benchmark S&P 500 was down 1.29% and the Dow was down 0.86%.
CASHED OUT
Investors slammed Ryan Cohen’s sale of his stake in Bed Bath & Beyond Inc. (BBBY) on social media sites like Reddit on Friday, accusing him of assisting in a meme stock rally before leaving with a $60 million profit.
Who is he? Last year, he gained a following of devoted individual investors who staked their money on his turnaround of the video game retailer GameStop Corp. Some of these investors expressed rage and disbelief after they copied his strategy on Bed Bath only to witness him abruptly cash out.
The billionaire investor revealed on Thursday that, nearly five months after accumulating it and advocating for changes, he had sold his 9.8% stake in the struggling home goods retailer. In response to Cohen’s investment, the business fired its CEO, changed a few board members, and consented to consider selling off its baby products division.
How much did he earn? According to a review of regulatory filings by Reuters and a source familiar with the situation, Cohen is expected to make between $55 million and $60 million from the sale of the stock.
Going forward… Investor response raises concerns about Cohen’s ability to maintain strong control over meme stock devotees. Some investors bemoaned their losses and Cohen’s role on Wallstreetbets, the Reddit forum that these investors frequently visit.
SURGING RENT ACROSS THE USA
According to a new Bank of America report, rents have rebounded after dropping during the height of the pandemic and are now severely impacting consumers from coast to coast. The largest increases in rental prices occurred in major cities like Phoenix, Arizona, and Dallas, with median rent increases of over 10% from the previous year in July.
All income levels and demographics experienced increases, but the report found that middle-class and younger Americans are experiencing the largest rent increases. As a result of rising interest rates and high home prices, prospective homebuyers are being priced out of the market, which is expected to keep rents high this year.
“With rent inflation being one of the stickiest components of inflation and expected to increase further, consumers will continue to face the downward pressure to their financial situations, although elevated savings and wages may provide an offset for now,” the report said.
On top of that, the rental market has experienced intense competition as well. According to appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate, one in five Manhattan leases signed in New York this year involved bidding wars, and winning offers were accepted at a price that was roughly 13% higher than the asking price.