Good Evening. U.S. equities had their largest one-day increase in two years on Thursday as Wall Street applauded lower-than-expected inflation figures and kept an eye on midterm election results.
While the Dow Jones increased by 3.70%, the S&P 500 gained 5.54%. The Nasdaq Composite rose a staggering 7.35%.
Also, better than Wall Street anticipated, the Consumer Price Index (CPI) for October showed a 7.7% increase over the previous year and a 0.4% increase over the previous month. Bloomberg questioned economists who predicted an annual increase of 7.9% and a monthly increase of 0.5%.
On learning that Chief Executive Officer Andy Jassy has started a review of spending as part of broader attempts to streamline the largest e-commerce company in the world, Amazon.com Inc. (AMZN) shares increased by 12%.
As it deals with a weakening economy, Amazon said in a statement to Bloomberg News that it will focus especially on cost-cutting in this year’s annual operating-plan review. According to an earlier article from The Wall Street Journal, the review is currently taking place, and employees in some divisions have been advised to look for work elsewhere within the organization because their teams are being suspended or shut down.
Amazon has already started to reduce costs by acting more forcefully. As it adjusts to a worse economy, the business announced last week that it was halting “new incremental” recruiting across its corporate workforce. Even in profitable divisions like its advertising business, Amazon has essentially halted hiring for new positions across the board.
Going forward…The employment ambitions of the majority of major tech companies are being put on hold, but Amazon is suffering particularly badly from the pandemic’s after effects. To manage an increase in orders from customers who were confined to their homes under Covid-19 limitations, the company practically doubled its personnel.
In the past year, Dutch Bros hiked the cost of its menu three times, yet customers didn’t object.
CEO and President Joth Ricci claimed that the team positioned the price increases carefully. The three include 4% in both May and June, followed by an increase of little more than 4% on September 1.
If you have been keeping up with inflation numbers, inflation affects every aspect of the business. The 30-year-old business reported an increase in product prices of about 10.7% year-over-year, and not just coffee is feeling the pinch.
In the end… the CEO asserts that Dutch Bros is cautious about passing price hikes on to customers and closely monitoring its rivals, such as Starbucks, which increased prices by around 5% over a 12-month period.