3. Mixed bag for retail
A slate of retail earnings reports has stocks swinging before the market opens Thursday, as some companies noted consumer weakness entering the spring season. Macy’s shares dropped as much as 10% after the department store operator slashed its full-year earnings and sales guidance. The company said it saw weaker discretionary spending starting in March and has had to mark down seasonal merchandise. Nordstrom’s stock, however, rose more than 3% after the company beat expectations on the top and bottom lines on Wednesday. While the retailer expects sales to fall this year, it reported sales improvements in April after a slow March. Shares of Chewy, meanwhile, soared more than 15% after the digital pet care retailer topped earnings and revenue estimates.
4. Alexa, pay up
Amazon has agreed to hand over more than $30 million to the Federal Trade Commission to settle allegations of privacy violations involving its Alexa and Ring products, according to filings out Wednesday. The FTC claimed in separate lawsuits that Amazon was improperly securing or holding onto video recordings and profile data of users, including children. In addition to the settlement charges, Amazon will be required to delete scores of data. And because, according to the FTC, “Ring failed to implement basic measures to monitor and detect inappropriate access before February 2019, Ring has no idea how many instances of inappropriate access to customers’ sensitive video data actually occurred.”
5. Coming home
More and more companies are looking to bring manufacturing operations home, pulling out of longstanding production powerhouses like China, in a trend called “reshoring” that could have massive implications for the global supply chain. According to Bank of America analysis, mentions of “reshoring” during S&P 500 earnings transcripts in the first quarter were up 128% over the same quarter last year, outpacing even the growth in mentions of “AI.” There’s a host of factors at play here: the Russia-Ukraine war, the aftereffects of the Covid-19 pandemic, U.S. and EU incentives for at-home production, and shifting demand due in part to the rise of TikTok. Still, remapping the global supply chain wouldn’t happen overnight.
— CNBC’s Jacob Pramuk and Sara Salinas wrote this newsletter. Yun Li, Christina Wilkie, Melissa Repko, Gabrielle Fonrouge, Lauren Feiner, Annie Palmer and Lucy Handley contributed.
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