Wall Street analysts have largely cheered the cost-saving measures that have been announced by Carvana and Beyond Meat, making them the latest company to be rewarded by investors.
The cost cuts were largely applauded by analysts.
Despite the plant-based foods maker reporting dismal quarterly revenue and profits, investors seem to be optimistic about the company's plans to save costs by laying off 4% of its workforce.
Carvana's stock jumped 40% on Friday, a day after it said that it is aggressively reducing costs as consumer demand takes a hit from high inflation and the possibility of a recession.
Wall Street analysts cheered the cost-cutting measures that the company took after it reported dismal second-quarter earnings.
Since warning of lower consumer spending and announcing layoffs on July 26, the stock of e- commerce platform Shopify is up roughly 30%.
The stock of Ford was up 2% on the day in July when it was reported that the company would be cutting 8000 employees.
After the company announced a small wave of layoffs on July 12th, the company's stock regained some of its lost value.
Even as businesses increase layoffs to cut costs, the U.S. economy is not in a recession, according to Jeffrey Roach. Following two consecutive 75-basis-point increases from the Federal Reserve, interest rates areweighing heavily on business investment, according to him.
The Bureau of Labor Statistics reported on Friday that the U.S. economy added 528,000 jobs in July, far exceeding expectations. Despite fears of a recession, the unemployment rate fell back to February 2020 pre-pandemic levels.
It is difficult to reconcile the jobs report with other data and anecdotal reports from companies where the number of layoffs has been increasing.
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