Last Week’s Biggest Tech News
Markets flat after Fed rate hike
Investors were wary last week as the Fed hiked rates for the fourth time in 18 months by 25 basis points to the range of 1.0%–1.25%. The NASDAQ composite index dipped by 0.11% while the S&P 500 Index (SPY) was flat. Amazon’s announcement of its imminent takeover of Whole Foods also took markets by surprise. Amazon stock rose 1.2% on Friday.
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Top movers for the Week Ended June 16
Infinera (INFN) stock was the top performer in the tech sector in the week ended June 16, 2017, returning 9.5%. The stock has been bleeding due to weak earnings. Groupon (GRPN) surged 5.9% last week. Meanwhile, Alliance Data Systems (ADS) saw its shares rise 5.6%.
Amazon to take over Whole Foods
Amazon (AMZN) announced on June 16 that it’s buying Whole Foods for $13.7 billion. The tech giant has the deep pockets to survive in the online grocery business. The company has expertise in delivery as well. It also has the necessary infrastructure, which means that its cost of delivery is likely to be low.
The one sector of the retail market Amazon didn’t have a significant stake in was the grocery market, which changed on Friday.
Another advantage for the company is that it can spread its fixed costs over all its other businesses. This ability puts Amazon in a really good position as other companies may not be able to compete for delivery charges.
Other news of note in the previous week
IBM (IBM) is teaming up with automaker BMW to provide cloud-based data management for the latter’s recently launched connected car initiative. IBM seeks to take advantage of the great growth potential in this field.
Meanwhile, Verizon (VZ) finally took over Yahoo’s core assets. CEO Marissa Mayer resigned, accepting the $23 million “golden parachute.” Yahoo will merge with AOL, which Verizon also bought back in 2015.
Sprint (S) is providing freebies to customers who are willing to move to the fourth-largest carrier from Verizon. Sprint wants to attract more subscribers in the midst of stiff competition.
Apple to step into the original content business
Apple (AAPL) has recruited two Hollywood television executives—Jamie Erlicht and Zack Van Amburg—from Sony in an effort to get into the original-programming business. They managed big hits on Sony productions such as The Crown and Breaking Bad. They’ll join Apple in new positions as co-heads of video programming worldwide.