Stock Market Heads for Weekly Gains, Crypto Thieves Steal $100 Million

The stock market is finally on track for some weekly gains. Meanwhile, Netflix is getting crushed by low subcriber numbers. Elsewhere, hackers have stolen $100 in crypto from the Horizon blockchain bridge.

The three major stock indexes are on track for weekly gains Friday as investors digest comments from Fed chair Jerome Powell. Powell testified before Congress this week, reiterating the central bank’s policy goals for combating inflation by raising interest rates and shedding its previously-bloated balance sheet. The S&P 500, Dow Jones, and Nasdaq indexes are all up around 1% this morning on the back of Powell’s comments.

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Stocks have been turbulent this week as analysts argue over whether the current inflationary pattern can be stopped without a full-scale recession. Some market experts say that demand needs to fall to recessionary levels for inflation to fall, while others argue that higher interest rates and more abundant supply should be enough to stabilize the economy. One of these outcomes will have to come to pass soon, as American consumers are slowing their spending to account for pressure from inflation.

Read More: Check out the latest Mind Your Dollars stock and financial news.

Meanwhile, a group of hackers has stolen $100 of cryptocurrency from a “blockchain bridge” called Horizon. This is only the most recent hacking attack on a blockchain bridge, following schemes that saw $600 million removed from the Ronin Network and the $320 million Wormhole heist. These heists are coinciding with a major sell-off in the crypto industry, spurred by cautious investors who have seemingly grown tired of crypto’s turbulent nature. 

Indexes Rise

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The S&P 500 finally looks set to shake a three-week losing streak. This year has been extremely choppy for the stock market, and the S&P 500 slipped into a bear market last week after consistent losses brought it 20% below a recent high. Now, with Jerome Powell confirming that the Fed will do everything in its power to curtail inflation, investors seem more confident in the market’s future performance.

“Really, investors want the chair to understand that inflation is a significant problem and that dealing with it earlier is actually better for the long-term,” explains TCW Group managing director and senior portfolio manager Diane Jaffee. “So I think investors are taking heart that the Fed is going to do whatever it takes.”

There are still some inherent challenges to overcome, though. Most economists don’t see a “smooth landing” for the economy in light of consistent interest rate hikes and worsening inflation. Retailers and entertainment companies alike are feeling the squeeze as consumers cut their spending. For example, Netflix, once thought to be a rock-solid investment, has struggled to keep its subscriber numbers high.

Netflix Feels the Inflation Squeeze

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Popular streaming platform Netflix has seen its share price fall dramatically in 2022, owing to surprising revenue misses and dwindling subscriber numbers. The company finds itself at the nexus of several market pressures. There’s more competition in the streaming space, and Netflix has consistently raised prices while canceling popular shows after one or two seasons. This has all coalesced with outcry on social media disparaging the company for continuing to work with transphobic content creators like comedian Dave Chapelle. 

Now, with these pressures all pushing in on the company, it has decided to lay off 300 employees to reduce its operating costs. “Today we sadly let go of around 300 employees,” a spokesperson explained in a recent statement. “While we continue to invest significantly in the business, we made these adjustments so that our costs are growing in line with our slower revenue growth. We are so grateful for everything they have done for Netflix and are working hard to support them through this difficult transition,” the statement went on.

Shares of Netflix have fallen 70% so far this year, and the company expects to lose as many as two million subscribers this quarter. Many economists have moved their outlook on Netflix’s stock to “underperform,” and Bank of America has slashed its expectation for the company’s share price from $240 to $196. 

Hackers Steal Millions in Crypto

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Hackers somehow stole $100 worth of cryptocurrency from a blockchain bridge called Horizon. Blockchain bridges allow users to move their digital assets from one verification system (called blockchains) to another. Horizon is a subsidiary of tech startup Harmony, which confirmed the attack on Twitter earlier today. Moreover, the company says it has singled out the digital address used by the hacker, isolating the funds.

Blockchain bridges are very attractive targets for thieves because they hold vast sums of liquid assets. “In order for individuals to use bridges to move their funds, assets are locked on one blockchain and unlocked, or minted, on another,” says blockchain analyst Jess Symington. “As a result, these services hold large volumes of cryptoassets.”

This is just the latest in a stream of terrible news for the crypto industry. Earlier this week, crypto lenders Celsius and Babel Finance put freezes on withdrawals as they experienced a devastating liquidity crisis amid dropping cryptocurrency values. Moreover, crypto firm Three Arrows Capital might soon default on a $660 million loan, further signaling the alarming state of the crypto industry.

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