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Russia delays gas deliveries for Europe

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Last Week’s Highlights

Delay in European gas deliveries

Nord Stream 1 is advancing under the Baltic Sea and supplies gas to Germany and other European countries. Its work was interrupted for three days due to maintenance on Saturday at 01:00 GMT. However, Russia canceled Saturday’s deadline to resume gas flow through this pipeline because it claims to have found a fault. Gazprom, the state-controlled company that has a monopoly on Russian gas exports, clarified that they are unable to resume gas deliveries because of an oil leak, this affects a turbine on the pipeline and it could not operate safely. This situation aggravates the situation and presents difficulties for the European nations to supply themselves with gas and secure fuel for the winter.

Layoffs make Snap stock price jump

Snap Inc. announced a 20% cut in its workforce of 6,400 employees. The company’s CEO, Evan Spiegel, informed employees that after disappointing results in the second quarter of 2022, the company must take drastic measures to manage its financial challenges. Snap already scrapped projects such as third-party apps Snap Minis, Snap Games, the Pixy photo-taking drone, a line of premium Snap Originals software, the Voisey music feature, and Zenly mapping products. Its strategic priorities are geared toward “community growth, revenue growth, and augmented reality.” With the layoffs and project cancellations, Snap claimed that the company will be able to save $500 million in annual expenses. Investors welcomed the news and as a result, shares of the U.S. camera and social media company ended Friday up 8.7% at $10.88.

Coming Up This Week

Starbucks gets backup

Starbucks has found its next CEO and claims he is a “proven leader”. Laxman Narasimhan, a consumer goods expert who currently heads U.K.-based Reckitt Benckiser Group PLC, has been tapped for the position at the U.S. coffee chain. Narasimhan announced his departure from Reckitt, but will remain in the position until Sept. 30 and will join Starbucks on Oct. 1. There, he will assume full CEO responsibility and join the company’s board of directors on April 1, 2023. His starting base salary will be $1.3 million and he will have the opportunity to earn an annual cash incentive of 200% of his base salary based on the company’s performance. Narasimhan is expected to gain a deep understanding of the coffee giant’s business operations and master the craft that was Howard Schultz’s, who will continue to play a “special role” at the coffee shop according to The Wall Street Journal.

The Meta & Qualcomm partnership

The chipmaker, Qualcomm, and social networking giant, Meta Platforms, have reached a multi-year agreement to produce custom chips. The announcement came Friday in Berlin, Qualcomm will provide custom chips for Meta’s Quest VR headset and the two companies will work together to develop chips that will use Qualcomm’s Snapdragon XR platforms. Mark Zuckerberg, founder and CEO of Meta said, “Unlike cell phones, building virtual reality poses new multi-dimensional challenges in terms of spatial computing, cost, and form factor. These chipsets will help us continue to push virtual reality to its limits and deliver incredible experiences.” None of the financial terms of the agreement were disclosed.

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Market News

During a very active week, major US indices closed lower. Stocks fell as an employment report showed a labor market that may be starting to lose, and this caused concern to grow over the gas crisis in Europe.

Another factor that was key to the indexes’ decline was thin trading volume ahead of an extended holiday weekend; the markets will be closed on Monday for Labor Day. The Dow Jones index and the S&P 500 fell by 1.07% each, while the Nasdaq Composite fell by 1.31%.

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