The daily business briefing: July 27, 2023

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1. Meta shares surge after strong earnings report
2. Fed announces 11th interest rate hike despite cooling inflation
3. Carmakers join forces to nearly double EV fast chargers
4. Stock futures rise after Meta shines, Fed hikes rates
5. Gap names Mattel executive as CEO

published 27 July 2023

1. Meta shares surge after strong earnings report

Meta Platforms shares jumped by 8% in pre-market trading Thursday after the Facebook and Instagram parent reported better-than expected revenue after the bell on Wednesday. Meta said its revenue totaled $32 billion for the quarter, beating the $31.06 billion analysts expected. Meta also projected $32 billion to $34.5 billion for the current quarter, exceeding expectations of $31.2 billion. Meta said crucial ad impressions jumped by 34% on a yearly basis, although the price per ad fell 16%. Facebook's daily active users also were strong at 2.06 billion, just above expectations. "We had a good quarter," Meta CEO Mark Zuckerberg said in a statement.

The Federal Reserve on Wednesday raised its benchmark short-term interest rate a quarter percentage point, its 11th rate hike in 17 months under an aggressive campaign to slow the economy and bring down high inflation. The change put the rate in a range between 5.1% and 5.3%, a 22-year high. That could further push up rates on mortgages and other loans. Inflation in the last month eased to its slowest pace in two years but remains above the Fed's 2% target. Consumer confidence has jumped to its highest level in two years. Fed Chair Jerome Powell left the door open to another rate hike in September and said that given the economy's resilience the central bank's economists "are no longer forecasting a recession."

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Seven major automakers — BMW Group, General Motors, Honda, Hyundai, Kia, Mercedes-Benz Group, and Stellantis — on Wednesday announced plans to build 30,000 charging ports on major highways and other key locations across the United States and Canada. The companies will spend at least $1 billion initially on the project, which will nearly double the 36,000 fast chargers already available. These ports can replenish a depleted battery in 30 minutes or less, and are considered crucial to wider adoption of electric vehicles, because the fear of not being able to find a charger on long trips remains an obstacle for EV purchases, according to The New York Times. Sales of electric cars have risen sharply but U.S. demand has softened recently.

U.S. stock futures rose early Thursday as Meta shares jumped after a strong earnings report and the Federal Reserve raised interest rates to the highest level since 2001. Futures tied to the Dow Jones Industrial Average and the S&P 500 were up 0.1% and 0.6%, respectively, at 7 a.m. ET. Futures connected to the tech-heavy Nasdaq were up 1.2%. The Dow gained 0.2% on Wednesday, extending its winning streak to 13 days, its longest since 1987. If it closes higher Thursday, the blue-chip index will equal its longest winning streak ever. More major companies, including McDonald's, Honeywell, Intel, and Ford, report earnings on Thursday. Eighty-one percent of the companies that have reported so far have beaten Wall Street's expectations, according to FactSet.

Gap is hiring Richard Dickson, president and chief operating officer at toymaker Mattel, as its new chief executive, ending a yearlong search for a new leader to restore the fortunes of the struggling apparel retailer, which owns Gap, Old Navy, Banana Republic, and Athleta. Mattel announced the news on Wednesday. Dickson, 55, is best known for restoring the Barbie franchise, now experiencing a PR bonanza from the blockbuster "Barbie" movie, after years of declining sales. Although he has spent much of his career at Mattel, Dickson has apparel experience after starting his career at Bloomingdale's. He also worked at the owner of Nine West for several years.

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Harold Maass is a contributing editor at The Week. He has been writing for The Week since the 2001 debut of the U.S. print edition and served as editor of TheWeek.com when it launched in 2008. Harold started his career as a newspaper reporter in South Florida and Haiti. He has previously worked for a variety of news outlets, including The Miami Herald, ABC News and Fox News, and for several years wrote a daily roundup of financial news for The Week and Yahoo Finance.