Stocks slump as central banks hike around the world. Plus: interviews with finance titans at Milken, the outlook for Wall Street bonuses, and more

Welcome to?This Week in Finance, your weekly roundup of the top news, conversations, and voices trending among financial professionals on LinkedIn. Publishing note: Following this edition, This Week in Finance will return in July. Click 'Subscribe' to be notified of each edition. This week:

Stocks slump in worst day since 2020

The stock market experienced one of its worst days since 2020 on Thursday. In "a stunning reversal," stocks across the board fell sharply, with the Dow Jones Industrial Average experiencing its largest decline of the year — 24 hours after its largest gain since 2020. Tech shares plunged; Tesla dropped 8.3% and Amazon 7.6%, while the Nasdaq Composite fell 5% to its lowest closing level in almost two years. On Wednesday, the Federal Reserve signaled it was taking a step to fight inflation, raising interest rates by half a percentage point — the most in 22 years.

• Stocks extended Thursday's loss at the open Friday.
• Companies that experienced a boom during the pandemic, such as Zoom, Peloton, and Teladoc Health, are seeing losses this earnings season.
• Here's what people are saying.
• Netflix hit with shareholder suit: The suit, which comes after Netflix revealed that it shed 200,000 subscribers during its most recent quarter, claims the company failed to disclose the impact of account sharing, increased competition from streaming rivals, and slower subscriber growth to investors.
• A buyer for Peloton?: The fitness company is hoping a buyer will want to come along for the ride as it attempts a turnaround from its post-lockdown slump. The Wall Street Journal, citing unnamed sources, reports Peloton is open to selling a 15% to 20% stake after it's lost nearly $45 billion in market value.
• Citi behind European flash crash: An inputting mistake at Citi led to an accidental transaction that sold off some Swedish stocks during a quiet period for European stock activity. European indices lost as much as 3% late Monday, or roughly $315 billion, though stocks later recovered.

Fed half-point hike may not be last

The Federal Reserve signaled it’s taking the fight to inflation, raising interest rates by half a percentage point — the most in 22 years — and announcing it would begin offloading the $9 trillion in assets it accumulated in a bid to bolster an economy slammed by the pandemic. The central bank, which slashed rates to near zero two years ago, began lifting them again by a quarter point in March. With the economy recovering rapidly, consumer prices have risen at the fastest pace in 40 years because of tangled supply chains and a historically tight labor market.

• Fed Chair Jerome Powell ruled out three-quarter point increases but said more half-point hikes could be on the table in coming months.
• Powell also said “inflation is much too high, and we understand the hardship it is causing.”
• The move to lift rates will boost the cost of borrowing for everything from mortgages to credit card debt.
• Here's what people are saying.

• Bank of Canada wants your trust: In her first speech since taking the second-in-command post at Canada’s central bank, senior deputy governor Carolyn Rogers said “our decisions take time and have to work through other parts of the economy before they directly affect Canadians.”

• Gulf central banks raise rates: The UAE, Saudi, Bahrain, and Qatar increased their interest rates by half a percentage point. Kuwait hiked its discount rate by 25 basis points.
• Impact of rate hike by RBI: India’s central bank announced an increase in the repo rate by 40 basis points to 4.4% in a bid to tackle rising inflation.
• RBA raises rates — what's next?: The Australian central bank has raised official interest rates for the first time in 11 years.

U.S. jobs surged again in April

The U.S. economy added 428,000 jobs in April, as the labor market rebounded for the 12th month in a row. The unemployment rate remained at 3.6%, one-tenth of a percentage point above its pre-COVID level. While the economy has recouped more than 90% of jobs lost during the virus-induced shutdowns, Friday’s report also showed 363,000 workers left the labor force last month. Given record-high job openings, that mismatch is likely to fuel wage pressure — which nevertheless lags the highest consumer-price inflation in 40 years. Hourly wages increased by 0.3% in April and have risen 5.5% from a year earlier. ?? Here's what people are saying.

• Worker output falls most since '47: Accelerating inflation and COVID converged last quarter to push worker productivity down by 7.5%, the biggest drop since 1947. Because the metric is a measure of how much employers pay workers per unit of output, surging labor costs accounted for much of the plunge.
• Canada's jobless rate at record low: The country’s job market has shaken off the effects of the pandemic and then some, hitting a new record-low jobless rate of 5.2% in April. Economists think the stage is set for another oversized rate hike.

Finance leaders on markets, economy at Milken

Watch Kamal Bhatia, Carlyle CEO Kewsong Lee, Apollo CEO Marc Rowan, and Daphne Kis on LinkedIn News Live this week here.

Watch Howard Marks on LinkedIn News Live this week here.

Wall Street bonuses may return to Earth

Wall Street bonuses may take a hit this year, says Axios, citing a report by consulting firm Johnson Associates. While last year's bonuses were "massive," those working in finance may see smaller end-of-year numbers as markets trend lower and companies tighten their belts. The asset management sector could see bonuses that are 10% to 15% less than in 2021, while deal makers could see "dramatic" losses. Hiring may also take a hit. ?? Here's what people are saying.

Goldman's first Bitcoin-backed loan

Cryptocurrency is officially on Wall Street. Goldman Sachs has issued its first Bitcoin-backed loan to crypto exchange Coinbase, a move that could further legitimize the use of digital currencies in traditional finance. While smaller banks have previously structured similar crypto loans with other companies, Goldman is one of the first major firms to take the step. Crypto hedge fund Arca said the Coinbase loan is likely Goldman’s way of “testing the waters before making a bigger splash.” ?? Here's what people are saying.

• Forget plastic — stores want crypto: If you’ve been eyeing that Gucci bag, get your crypto wallet ready. The luxury giant will soon accept cryptocurrencies as payment at stores in New York, Los Angeles, Miami, Atlanta, and Las Vegas in a bid to attract younger customers.

Musk lures equity partners, set to be interim Twitter CEO

Elon Musk is preparing to temporarily commandeer the top job at Twitter "for a few months" if his $44 billion takeover of the company is successful, reports CNBC, citing unnamed sources. The news comes after the Tesla CEO raised over $7 billion in recent days to help him pay for the acquisition — with help from his (very wealthy) friends.

• The financing comes from a group of 19 investors that includes Oracle co-founder Larry Ellison, Chinese-Canadian billionaire Changpeng Zhao, and a Saudi prince.
• It halves the amount of money Musk needs to borrow against his Tesla stock to cover the deal.
• In a filing, Musk said he will continue conversations with existing Twitter shareholders, including co-founder Jack Dorsey, to contribute shares to help close the deal.
• Here's what people are saying.

Debating NFTs' future

Hard-core crypto fans are taking issue with The Wall Street Journal's headline declaring non-fungible token sales as "flatlining." The Journal cites figures from the data website NonFungible, which shows sales taking a 92% dive this week from a peak of roughly 225,000 in September, while the number of active wallets in the NFT market plunged 88% from November highs. But Forbes has a different take, suggesting "good news is on the horizon" after the drop-off: It argues the NFT market is simply maturing and consolidating around the strongest brands. ?? Here's what people are saying.

• Be wary of these NFT scams: CBC News broke down the top three forms of NFT scams people should be careful to avoid.

Africa banks on mobile money

Africa continues to be the leading market for mobile money banking, research by industry insider GSMA shows. The continent now accounts for at least 70% of the world's $1 trillion in mobile money transactions, with the value of transactions rising from $495 billion in 2020 to $701 billion in 2021. There are now more than 184 million mobile money accounts in Africa, and that number is expected to keep growing as more companies introduce digital payments. Kenya and Senegal are currently the leaders in digital payments, while more firms in Nigeria are entering the space. ?? Here's what people are saying.

• Africa's fastest growing companies: Firms experiencing the fastest growth are those trying "to tap Africa's unbanked population."
• New African insurance giant: Sanlam and Allianz have agreed to combine their current and future operations across Africa to create the largest non-banking financial services entity on the continent.

Beat inflation, Warren Buffett style

While we can't control steep grocery tabs and gas prices, we can control our own success. “The best thing you can do is to be exceptionally good at something,” Warren Buffett insisted at the annual shareholders meeting of Berkshire Hathaway. Working hard and striving to be at the top will always be the best protection against inflation, he said, because “skills, unlike currency, are inflation-proof.” ?? Here's what people are saying.

• Buffett, Munger talk market mania: At Berkshire's annual meeting, Buffett confirmed deeper stakes in Apple and oil, and Munger sounded off on the stock market as "almost a mania of speculation" right now. Munger said he wasn't surprised by Robinhood's "unraveling," and he still suggests that investors "just say no" to crypto. Buffett echoed the sentiment, warning investors against "new forms of money."

The numbers behind Goldman's RTO bid

Between 50% and 60% of Goldman Sachs U.S. employees are working in offices rather than remotely, CEO David Solomon told CNBC. The rate is a slight increase from the 50% attendance rate Goldman reported in February, preceding its latest return-to-office push. Among other measures, Goldman offered employees free car rides to and from the office and lined up food trucks outside its NYC headquarters for complimentary lunches — before later rolling back each of those perks. ?? Here's what people are saying.

With Jessica Hartogs, Kelli Nguyen,?Melissa Cantor, Ruiqi Chen, Cate Chapman,?Jessy Bains, Lynn Chouman, Dipti Jain, Natalie MacDonald, Laura Entis,?Jake Perez, Ben Cousins, Solange Uwimana, Winifred Okocha, and?Alessandra Riemer.

What's your take on the week's news and other developments impacting you or your business? Join the conversation in the comments below.