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Did Stock Markets Touch Bottom Today?

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This story originally appeared on Zacks

The market kept digging and digging… and then it stopped. Market indexes picked up Monday morning from where they left off Friday afternoon, which is to say: down big. The Dow was hoping to break a seven-session losing streak (with the S&P 500 and Nasdaq down five straight), but at its low point today, the blue-chip index dumped a frightening -1115 points. The Nasdaq was -5% at its session lows.
And then we saw the indexes come roaring back, particularly in the last hour of regular trading, which surged each major index into the green by Monday’s closing bell! The Dow ended the day +101 points, +0.30% — for an incredible 1200-point swing — while the S&P nearly matched: +0.29%. The Nasdaq reached positive territory ahead of the others, +0.63% on the day, while the badly beaten-down small-cap Russell 2000 outperformed the others: +2.29%.
It’s not like we’d just finally touched into correction territory, either — we’d been there for a while now, at least on the Nasdaq (-18%) and the Russell (-20%). Perhaps the trigger was pulled on a few key names that finally became too attractive to pass up, and as the leading algos switched course, the others followed suit. In any case, a happy ending to start what looked like another gruesome week in the market.
The one bit of good news this morning was regarding Kohl’s KSS, which had been mired in the middle of its five-year trading averages until a news report that private activist investor firm Acacia was looking to buy the department store retailer for $64 per share. Competition then followed from Sycamore, which offer $65 per share. This brought Kohl’s shares +33% on the day, with potentially more upside.
What either private firm would do with Kohl’s is not totally clear; however, by one account, the company has over $7 billion in real estate assets alone. The stock reached a record high in 2018 above $80 per share briefly. At this stage, Kohl’s trades at $63 and change. This story is developing.
After today’s close, IBM Corp. IBM reported Q4 earnings, in what amounts to the first bumpy quarter in recent history for the tech giant, which hadn’t missed earnings estimates in almost eight years. But with the spinoff of its managed infrastructure business Kyndryl, IBM earnings and revenues both came in light of Zacks consensus expectations.
That said, the company’s +6.5% sales growth in the quarter was the highest in the past decade. Higher-growth areas of IBM include Red Hat (+21%), Hybrid Cloud (+19%), Consulting (+16%) and Software (+10%), and are part of CEO Arvind Krishna’s vision for a faster-growing, higher-margin conglomerate of tech businesses. Shares are up +5.6% on the earnings release, swinging to positive value year-to-date. Guidance for 2022 is said to be provided in the upcoming conference call.
Tomorrow, we get a bigger helping of Q4 earnings reports, including General Electric GE, Johnson & Johnson JNJ and 3M MMM in the morning; Microsoft MSFT after the closing bell. For the next few weeks, we expect Q4 earnings to give shape to the overall economic view. We’ll also find out plenty as of Wednesday’s conclusion to the latest Fed meeting how monetary policy will transpire going forward.
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The FTC files suit to block Microsoft’s Activision Blizzard acquisition

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The Federal Trade Commission is suing to block the proposed acquisition of Activision Blizzard by Microsoft. It contends that the acquisition, if completed, would give Microsoft an unfair advantage over its competitors.

This morning, the four-person commission voted to issue the lawsuit. The three Democrat members (chair Lina Khan, Rebecca Slaughter and Alvaro Bedoya) voted in favor and the Republican (Christine Wilson) voted against. The commission allegedly met with Microsoft the day prior to discuss concessions, according to a report from The Washington Post.

If its news release is anything to go by, the commissioners weren’t convinced that Microsoft wouldn’t withhold Activision Blizzard’s popular games from competing services. The FTC cited Microsoft’s acquisition of Zenimax, and how games such as Starfield and Redfall became exclusive following its close.

Holly Vedova, director of the FTC’s Bureau of Competition, said in a statement, “Microsoft has already shown that it can and will withhold content from its gaming rivals. Today we seek to stop Microsoft from gaining control over a leading independent game studio and using it to harm competition in multiple dynamic and fast-growing gaming markets.”

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The FTC is not the only government body to express concern about the implications of the acquisition. The UK’s Competition and Markets Authority is currently investigating. It recently closed Phase One of the investigation, and expressed concerns in its issues statement.

The history of the planned acquisition

Microsoft announced its intention to acquire the publisher in January. Through this acquisition, it would become the regent of popular gaming franchises such as Call of Duty, Candy Crush, World of Warcraft and many others. Reportedly, it offered around $69 billion for Activision Blizzard.

The concerns about the scale of the acquisition emerged almost as soon as it was announced. The FTC reportedly moved to investigate the deal almost immediately. Niko Partners senior analyst Daniel Ahmad said at the time that Microsoft would have to pay Activision $3 billion if the deal was blocked.

The current focal point of the antitrust concerns is the Call of Duty franchise. Sony has repeatedly contended, in public statements primarily aimed at the CMA’s investigation, that Microsoft could undermine its competition via these popular and lucrative games. It could, according to Sony, either outright stop publishing them on Sony’s platforms, or it could offer them on its Xbox Game Pass subscription service. Sony claims Call of Duty on Game Pass would diminish demand for Sony consoles even if Call of Duty is still published on them.

Microsoft has, in turn, responded that its competitors have plenty of exclusive titles of their own. It’s also offered to sign 10-year deals with Sony, Nintendo and Valve (the company behind PC games store Steam) to offer Call of Duty titles on their platforms. It announced earlier this week that it has inked such a deal with Nintendo.

Brad Smith, Microsoft’s vice chair and president, said in a statement to The Verge, “We continue to believe that this deal will expand competition and create more opportunities for gamers and game developers. We have been committed since Day One to addressing competition concerns, including by offering earlier this week proposed concessions to the FTC. While we believed in giving peace a chance, we have complete confidence in our case and welcome the opportunity to present our case in court.”



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Airtable chief revenue officer, chief people officer and chief product officer are out • TechCrunch

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As part of Airtable’s decision to cut 20% of staff, or 254 employees, three executives are “parting ways” with the company as well, a spokesperson confirmed over email. The chief revenue officer, chief people officer and chief product officer are no longer with the company.

Airtable’s chief revenue officer, Seth Shaw, joined in November 2020 just one month before Airtable’s chief producer officer Peter Deng came on board. Airtable’s chief people officer, Johanna Jackman, joined Airtable in May 2021 with an ambitious goal to double the company’s headcount to 1,000 in 12 months. The three executives are departing today as a mutual decision with Airtable, but will advise the company through the next phase of transition, the company says. All three executives were reached out to for further comment and this story will be updated with their responses if given.

An Airtable spokesperson declined to comment on if the executives were offered severance pay. The positions will be succeeded by internal employees, introduced at an all-hands meeting to be held this Friday.

Executive departures at this scale are rare, even if the overall company is going through a heavy round of cuts. But CEO and founder Howie Liu emphasized, in an email sent to staff but seen by TechCrunch, that the decision – Airtable’s first-ever lay off in its decade-long history – was made following Airtable’s choice to pivot to a more “narrowly focused mode of execution.”

In the email, Liu described Airtable’s goal – first unveiled in October – to capture enterprise clients with connected apps. Now, instead of the bottom-up adoption that first fueled Airtable’s rise, the company wants to be more focused in this new direction. Liu’s e-mail indicates that the startup will devote a majority of its resources toward “landing and expanding large enterprise companies with at least 1k FTEs – where our connected apps vision will deliver the most differentiated value.”

The lean mindset comes after Airtable reduced spend in marketing media, real estate, business technology and infrastructure, the e-mail indicates. “In trying to do too many things at once, we have grown our organization at a breakneck pace over the past few years. We will continue to emphasize growth, but do so by investing heavily in the levers that yield the highest growth relative to their cost,” Liu wrote.

Airtable seems to be emphasizing that its reduced spend doesn’t come with less ambition, or ability to execute. A spokesperson added over e-mail that all of Airtable’s funds from its $735 million Series F are “still intact.” They also said that the startup’s enterprise side, which makes up the majority of Airtable’s revenue, is growing more than 100% year over year; the product move today just doubles down on that exact cohort.

Current and former Airtable employees can reach out to Natasha Mascarenhas on Signal, a secure encrypted messaging app, at 925 271 0912. You can also DM her on Twitter, @nmasc_. 



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Kubernetes Gateway API reality check: Ingress controller is still needed

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No doubt the new Kubernetes excitement is the Gateway API. One of the more significant changes in the Kubernetes project, the Gateway API is sorely needed. More granular and robust control over Kubernetes service networking better addresses the growing number of use cases and roles within the cloud-native paradigm.

Shared architecture — at all scales — requires flexible, scalable and extensible means to manage, observe and secure that infrastructure. The Gateway API is designed for those tasks. Once fully matured, it will help developers, SREs, platform teams, architects and CTOs by making Kubernetes infrastructure tooling and governance more modular and less bespoke.

But let’s be sure the hype does not get ahead of today’s needs.

The past and future Kubernetes gateway API

There remains a gap between present and future states of Ingress control in Kubernetes. This has led to a common misconception that the Gateway API will replace the Kubernetes Ingress Controller (KIC) in the near term or make it less useful over the longer term. This view is incorrect for multiple reasons.

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Ingress controllers are now embedded in the functional architecture of most Kubernetes deployments. They have become de facto. At some point, the Gateway API will be sufficiently mature to replace all functionality of the Ingress API and even the implementation-specific annotations and custom resources that many of the Ingress implementations use, but that day remains far off.

Today, most IT organizations are still either in the early adoption or the testing stage with Kubernetes. For many, just getting comfortable with the new architecture, networking constructs, and application and service management requirements requires considerable internal education and digestion.

Gateway API and Ingress controllers are not mutually exclusive

As we’ve done at NGINX, other Ingress maintainers will presumably implement the Gateway API in their products to take advantage of the new functionality and stay current with the Kubernetes API and project. Just as RESTful APIs are useful for many tasks, the Kubernetes API underpins many products and services, all built on the foundation of its powerful container orchestration engine.

The Gateway API is designed to be a universal component layer for managing service connectivity and behaviors within Kubernetes. It is expressive and extensible, making it useful for many roles, from DevOps to security to NetOps.

As a team that has invested considerable resources into an open source Ingress controller, NGINX could have chosen to integrate the Gateway API into our existing work. Instead, we elected to leverage the Gateway API as a standalone, more open-ended project. We chose this path so as not to project the existing constraints of our Ingress controller implementation onto ways we might hope to use the Gateway API or NGINX in the future. With fewer constraints, it is easier to fail faster or to explore new designs and concepts. Like most cloud-native technology, the Gateway API construct is designed for loose coupling and modularity ­— even more so than the Ingress controller, in fact.

We are also hopeful that some of our new work around the Gateway API is taken back into the open-source community. We have been present in the Kubernetes community for quite some time and are increasing our open-source efforts around the Gateway API.

It could be interpreted that the evolving API provides an invaluable insertion point and opportunity for a “do-over” on service networking. But that does not mean that everyone is quick to toss out years of investment in other projects. Ingress will continue to be important as Gateway API matures and develops, and the two are not mutually exclusive.

Plan for a hybrid future

Does it sound like we think the Kubernetes world should have its Gateway API cake and eat its Ingress controller too? Well, we do. Guilty as charged. Bottom line: We believe Kubernetes is a big tent with plenty of room for both new constructs and older categories. Improving on existing Ingress controllers —which were tethered to a limited annotation capability that induced complexity and reduced modularity — remains critical for organizations for the foreseeable future.

Yes, the Gateway API will help us improve Ingress controllers and unleash innovation, but it’s an API, not a product category. This new API is not a magic wand nor a silver bullet. Smart teams are planning for this hybrid future, learning about the improvements the Gateway API will bring while continuing to plan around ongoing Ingress controller improvement. The beauty of this hybrid reality is that everyone can run clusters in the way they know and desire. Every team gets what they want and need.

Brian Ehlert is director of product management at NGINX.

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