An ugly, year-end stock-market selloff and the return of volatility has put the economic expansion, soon to be the longest on record, under the microscope. Cyclical sectors, such as housing, are slowing, as the Federal Reserve raises interest rates.

The risks to the economy seem to be multiplying, from trade tensions to national security threats to a president who prefers to conduct the nation’s affairs via Twitter.

The question everyone is asking is: Are the gut-wrenching ups and downs in the U.S. stock market just noise? Or is the flirtation with a bear market an early warning sign of what the U.S. economy can expect in 2019?

The Fed will be the ultimate arbiter of how things play out.

It is said that the stock market

SPX, +0.85%

 is not the economy, and that’s true. But the stock market does convey certain information and expectations about things that affect the economy, and are affected by it, such as corporate earnings. And those profit expectations have been tempered after the spectacular, double-digit gains in 2018. (Year-over-year comparisons become more challenging next year.)

In 2019 we will learn whether the Tax Cuts and Jobs Act, which reduced the corporate income tax rate to 21% from 35%, was truly a stimulus for productivity-enhancing capital investment or merely a stimulus for profits.

Business fixed-investment did accelerate in the first half of 2018, rising 11.5% in the first quarter and 8.7% in the second, before reverting to a 2.5% increase in the third. A good chunk of the tax cut went to stock buybacks, which exceeded a record $1 trillion in 2018.

The U.S. economy, meanwhile, is not sending out alarm bells just yet.

Available data point to an economy still operating near full employment. At 3.7%, the civilian unemployment rate sits at a 49-year low. Wages are finally rising at a 3% rate for the first time since the Great Recession. And consumers opened their wallets during the Christmas shopping season. The 5.1% increase in holiday sales was the biggest in the last six years, according to Mastercard SpendingPulse.

That doesn’t mean the economic outlook is without risks. The sharp widening in credit spreads over the last three months, both high-yield and investment grade, seems to be mirroring the stress in the stock market.

Housing, which has been a reluctant participant throughout this business cycle after overplaying its hand in the previous one, has peaked. Yet even at the high point for single-family housing starts earlier this year, builders were breaking ground on new homes at rates that paled in comparison to those of previous expansions over the last half century.

Global synchronized growth has turned to a synchronized slowdown, which means reduced demand for U.S. goods and services. Still, the overall decline in industrial commodity prices has been less scary than the dive in energy prices since October.

The geopolitical situation is replete with opportunities for disruption and chaos.

A trade war with China remains a distinct possibility. The terms of the U.K.’s exit from the European Union, or Brexit, have yet to be determined. France is dealing with anti-government street protests, triggered by an announced fuel tax, since abandoned, and a push for a higher minimum wage. Italy and the European Union, which were at loggerheads over Italy’s budget, have come to some kind of an agreement that will allow Europe’s fourth-largest economy to avoid sanctions for now.

In short, the liberal world order created after World War II and the institutions created to promote democratic ideals and international trade and prevent another outbreak of hostilities is being threatened by nationalist and populist movements across the globe.

The effect of any, or all, or these developments has the potential to rattle the stock market and disrupt the economic expansion. But none is as easy to identify as our own domestic provocateur, the Fed.

One of the many reasons cited for the stock market’s recent jitters was the Fed’s Dec. 19 rate increase and projections for additional hikes next year, along with continue balance sheet reduction.

While the stock market was having a hissy fit, over in the fixed-income market, federal funds futures pretty much removed the likelihood of any additional rate hikes in 2019. And if there is one thing that Fed policy makers’ pay attention, even cater, to, it is market expectations.

Based on the December 2019 fed funds futures contract, the market is placing a greater probability on a rate cut than a rate hike by the end of the year.

If the Fed defers to the market’s “forecast,” as it did in 2016, then it could engineer one of the rare soft landings in central bank history.

If, instead, the Fed persists is raising the funds rate to the point that it exceeds the yield on the 10-year Treasury note, a recession would be the likely outcome. The average lead time for the term spread at business-cycle peaks — that is, the time between inversion and onset of recession — is 13.5-14 months, according to the Conference Board, the proprietor of the Index of Leading Economic Indicators, of which the term spread is first among equals.

The stock market seems more concerned about what the Fed says. I, for one, am content to wear earplugs but plan to monitor closely what policy makers do with the funds rate relative to the long-term rate.

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Before I issue my 2019 Market Outlook in the days ahead I wanted to highlight some key practical lessons from 2018 as they will help set the stage for next year. See full story.

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Less than a year after taking the helm as CEO of Chipotle Mexican Grill, Brian Niccol is still scoring big with investors, fueling the burrito chain’s best year since 2013.

Shares of Chipotle soared nearly 50 percent in 2018 — the stock’s best performance since its 80 percent surge in 2013.

But it’s struggled to regain customer trust after a series of foodborne illness outbreaks nearly three years ago. Ahead of those events, the stock peaked at $758.61 a share on Aug. 5, 2015.

While Chiptole’s stock is currently almost half of that price at about $431 a share, Niccol’s presence has reinvigorated confidence in the restaurant’s ability to turn itself around. The former Taco Bell CEO’s appointment has resulted in a more than 67 percent bump in the company’s stock since it was announced in February.

Since joining Chipotle in March, Niccol has championed upgrades to the company’s mobile app, its internal software and in-restaurant technology. His goal has been to remove friction in all aspects of the ordering and making process, so that food gets to customers faster.

Niccol’s strategy is as much about driving sales as it is about reminding customers who have left the brand what made them fall in love with Chipotle to begin with.

“It takes time to build a culture of accountability,” Niccol said on an earnings conference call in July. “We know that when the food is delicious, the feel of the restaurant is great and we remove the friction from the flow of the order processes, no matter the channel, we delight customers.”

While the Chipotle has been testing new menu items in limited markets across the U.S, it plans to be more focused in other areas of the business like improving its digital capabilities.

Chipotle has been updating its kitchens with a second-make line. These are buffets similar to the one at the front of the store, but are just for digital orders. The company is also rolling out digital order pick-up shelves, which are meant to prominently display online orders once they have been filled.

Additionally, Chipotle is testing drive-up windows just for guests to pick up digital orders.

These efforts, along with pricier burrito bowls and new marketing campaign which began in September, have bolstered sales. In the third quarter, same-store sales grew 4.4 percent.

Ahead of Chipotle’s food safety issues, same-store sales have skyrocketed as much as 19.8 percent as consumers flocked to the restaurant.

Sales took a hit in late 2015 and throughout 2016 in the wake of several outbreaks of Norovirus and E. coli, but rebounded in 2017. Easy comparisons boosted same-store sales growth dramatically, but those figures have since settled into more steady growth.

Chipotle is expected to report its fourth quarter earnings in February. Analysts currently expect same-store sales growth to be up 4.2 percent, according to data compiled by FactSet. For comparison, industry-wide same-store sales tend to rise an average of 1 to 2 percent.

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In any competition, there are winners and losers. And among retailers competing for customers, the winners of 2018 beat their rivals by providing faster delivery, better online and mobile shopping options, and the trendiest products.

Those who failed or were slow to adapt — Bon-Ton, Sears, Mattress Firm and David’s Bridal were among the slew of retailers that filed for bankruptcy in 2018. Toys R Us also closed all of its stores after filing for bankruptcy near the end of 2017.

U.S. department store chains are struggling more than ever headed into the new year. The products they sell from the likes of Nike or Coach can just as easily be bought directly from those brands’ own stores or online. Department stores accounted for 14.5 percent of all retail purchases in 1985 in North America. Last year, that fell to 4.3 percent and is still dropping, according to Neil Saunders, managing director of GlobalData Retail.

J.C. Penney, for instance, heads into 2019 with a bleak outlook; its stock fell below $1 per share for the first time last week. Meanwhile, Hudson’s Bay, the parent company of Lord & Taylor and Saks Fifth Avenue, has been shutting some of its flagship stores in the U.S. Separately, Neiman Marcus has significant debt coming due in 2020 and 2021.

“It’s a continual challenge for department stores … to define who they want to be in this new era,” Ryan Fisher, a partner in consultancy firm A.T. Kearney, told CNBC. “To me the pressure is on them in 2019 to push their online and in-store experiences.” And many department store operators still have too much bricks-and-mortar space that needs to be “rationalized,” he added, meaning more store closures by some of these businesses are inevitable.

An early look at sales data by Mastercard during the weeks leading up to Christmas Eve found overall transactions at department stores were down 1.3 percent from a year ago. Foot traffic at some malls — where department stores are anchor tenants — was also noticeably lighter during parts of the holiday season, including Black Friday weekend.

But that doesn’t mean consumers weren’t whipping out their wallets and filling their shopping carts ahead of the new year. Many headed in throngs to off-price retailers like T.J. Maxx and big-box chains like Walmart. Here’s a better look at some of the winners in retail to round out 2018.

Discount retailers are thriving as many shoppers still enjoy seeking out bargains even when they have more money to spend. T.J. Maxx, Ross Stores and Burlington Stores continue to see sales grow at stores open for at least 12 months, as other companies struggle. Off-price retailers are also especially well-positioned to benefit should the U.S. economy slow and force consumers to budget more cautiously.

In good times and bad, “the consumer loves a value,” Marie Driscoll, managing director of luxury and fashion for Coresight Research, said. She said millennials are also seeking out off-price channels more and more, making this category of retail’s growth prospects even better as that generation of shoppers gains more spending power.

At a time when other retailers like Gap and L Brands are shutting some of their stores, discounters are still growing. TJX, which owns HomeGoods, is now opening stores across the U.S. under a new banner called Home Sense; Ross opened 100 stores last year.

And, ironically enough, luxury department store chains like Nordstrom continue to try to copy this model to use it as a way to grow sales where their full-priced shops are struggling. The latest push is by Macy’s with its Macy’s Backstage banner, which it’s putting inside existing Macy’s stores. Nordstrom has Nordstrom Rack, and Hudson’s Bay owns Saks Off 5th.

Walmart and Target both stood out as winners in retail in 2018, as these two companies continue to pour money into their businesses to keep pace with Amazon.

Target reported unprecedented traffic at its stores — many of which have been remodeled — in 2018, as Walmart has been focused on buying various online sellers to grow digital sales, its latest acquisition being Art.com. Walmart is targeting e-commerce sales growth of 40 percent for 2018. Its online sales grew by 43 percent in the third quarter. Target CEO Brian Cornell, meanwhile, has said he sees “no sign” of consumer spending slowing down anytime soon.

Both companies have been trying to keep prices low to stay competitive without sacrificing too much profit. Both have been pushing customers to buy online and pick up in the store, saving on delivery expenses and hopefully enticing shoppers to buy more once inside to retrieve online orders. They’re also adding more of their own in-house brands, which generate fatter profits.

“The common elements among [Walmart and Target] is they have stepped up their game in apparel,” Customer Growth Partners owner Craig Johnson said. That’s in addition to their grocery businesses, and it’s what’s helping drive same-store sales, he said.

In the new year, analysts will be looking to see if these two companies can keep the momentum going. Walmart is expected to continue to acquire more e-commerce brands, as Target plans to remodel more of its stores and open additional smaller-format locations across the U.S. in urban markets, including New York.

The apparel industry is going through somewhat of a renaissance, and it’s largely thanks to a lift in sales of athleisure, or clothes than can be worn to the gym and to run errands.

The trend has gained in popularity as players like Lululemon, made famous for its yoga pants, Nike, Adidas and more recently Gap‘s Athleta brand have opened more stores and pushed new products. There are also a slew of e-commerce brands including Outdoor Voices, Alo and Rhone that are built around athleisure and are gaining momentum among younger consumers especially. Shoppers increasingly are opting for comfort and casual over fitted and formal.

“Lululemon still looks exceptional, and Nike is still the clear winner in the space … with product innovation and customization,” Stacey Widlitz, president of consulting firm SW Retail Advisors, said.

In Nike’s latest earnings report, which topped expectations across the board, the company said revenue grew in nearly every category, with footwear and apparel seeing double-digit growth across the globe. Nike has, meanwhile, made headlines for two recently opened stores, one in New York and one in Los Angeles, that offer customized sneakers and other experiences through its mobile app.

As Lululemon heads into 2019, it will expand its test of a loyalty program that costs $128 per month and allows members to select a pair of pants or shorts, in addition to offering workout classes and free expedited shipping.

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A little post-Christmas love from Santa Claus to end 2018 won’t be enough to turn the tide for an ugly December and a brutal 2018 that cut across a broad swath of Wall Street, ranging from stocks to commodities.

Indeed, while investors had spent much of the long-running bull market in stocks arguing that “there was no alternative” to equities, the past year saw investors lament that there was “nowhere to hide” as asset classes across the board came under pressure.

The table below from CFRA, using data through Friday’s close, offers an illustration:

CFRA

No matter the investment, “investors likely experienced declines in annual returns. Indeed, even though U.S. REITs and the dollar recorded total returns in excess of 4.5%, declines were seen in bonds, gold, oil, preferred stocks and U.S. equities, along with developed international and emerging market indices,” said Sam Stovall, chief investment strategist at CFRA, in a Monday note.

Opinion: Every investor was humbled in 2018, so it’s wise to figure out what happened and why

U.S. stocks moved to the upside on Monday, building on a rebound that saw major indexes on Friday post their first weekly rises of the month. But the S&P 500

SPX, +0.85%

 and Dow Jones Industrial Average

DJIA, +1.15%

 still logged their worst monthly declines since February 2009 and their worst December performances since 1931, while the Nasdaq Composite

COMP, +0.77%

  which fell into bear-market territory earlier this month, saw its worst December since 2002.

For the year, the S&P 500 fell 6.2%, the Dow dropped 5.6% and the Nasdaq Composite shed 3.9%, marking the worst annual performance for all three since 2008.

For a detailed breakdown of 2018 U.S. stock market performance, check out: Dow industrials and S&P 500: The best- and worst-performing stocks of 2018

Major equity markets outside the U.S. largely suffered even more. China’s Shanghai Composite

SHCOMP, +0.44%

 fell 24.6% in 2018, the biggest annual fall since 2008, while Hong Kong’s Hang Seng Index

HSI, +1.34%

 shed 13.6% for its biggest fall since 2011, according to data compiled by Dow Jones Market Data.

Japan’s Nikkei 225 Index

NIK, -0.31%

 fell 12.1%, for its biggest fall since 2008.

In Europe, the Stoxx 600

SXXP, +0.42%

 fell 13.2% for 2018, its biggest decline since 2008.

Emerging-market stocks were punished in part by a stronger dollar, with the iShares MSCI Emerging Markets ETF

EEM, -0.46%

 falling over 17%, its worst performance since 2015, according to FactSet.

As noted, a down year for stocks was uncharacteristically also a down year for bonds. The yield on the 10-year U.S. Treasury note

TMUBMUSD10Y, +0.00%

 rose 27.6 basis points, its largest annual rise since 2013. Yields and debt prices move in opposite directions. The iShares Core U.S. Aggregate Bond ETF

AGG, +0.25%

 fell 2.6%, its biggest decline since 2013.

On the commodity front, gold futures

GCG9, +0.13%

 ended the year on a strong note but were still poised to log a nearly 2% annual loss, based on the most-active contract. Crude futures tumbled sharply in the fourth quarter, slumping into a bear market after hitting nearly four-year highs in early October. The U.S. benchmark, West Texas Intermediate crude

CLG9, +1.06%

 , was down around 40% from its high and saw a 2018 fall of 24.8%, the largest annual drop since 2015.

As for the dollar, the ICE U.S. Dollar Index

DXY, -0.26%

which tracks the currency against a basket of six major rivals, fell 1.2% in December, trimming its 2018 gain to 4.3%, still its strongest rise since 2015.

Looking at stocks, Stovall said investors might take comfort from a look at the gap in performance between the sectors of the S&P Composite 1500 Index, which is made of up of the large-cap S&P 500, MidCap 400 and SmallCap 600.

Through Friday, the gap between the return for the top-performing sector, health care (up 5%) and the worst-performing sector, energy (down 18.5%), was 23.5 percentage points, well below the long-term average gap between top and bottom sectors, stretching back to 1970, of 41 percentage points.

In years following a below-average differential, the S&P 500 saw a positive full-year total return 91% of the time, he noted, versus a positive run only 60% of the time when the spread was above average.

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Happy New Year, MarketWatchers! Check out these top stories as we ring in 2019.

Personal Finance
This was MarketWatch’s most popular Moneyist advice column of 2018

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MOSCOW — Russian authorities said Monday they had detained a U.S. citizen for alleged spying, setting the tone for more confrontation between the two countries in the new year.

American Paul Whelan was arrested on Dec. 28 while “carrying out spying activities,” Russia’s main security agency, the FSB, said in a brief statement without providing further details.

The State Department said Monday that the U.S. is aware of the detention of a U.S. citizen in Russia, but didn’t comment on his identity or occupation, citing privacy considerations. A spokeswoman said the U.S. has received formal notification of the detention from the Russian Ministry of Foreign Affairs, and has requested access to the American, in accordance with the 1963 Vienna Convention on Consular Relations. Whelan could face up to 20 years in jail if he is convicted of spying.

“The law of retaliation states, ‘An eye for an eye or a tooth for a tooth,’ ” Russian President Vladimir Putin told reporters earlier this month when asked how his government would respond to politically motivated arrests. “But we will not arrest innocent people simply to exchange them for someone else later on.”

An expanded version of this report appears on WSJ.com.

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Facebook is bidding farewell to a year plagued by privacy scandals and internal turmoil. On the last trading day of 2018, the stock closed at $131.09 per share, down 25.7 percent for the year. The stock ended the year lower than the previous one for the first time since its debut on the public market in 2012.

In 2018, a series of events soured public opinion on a company that has long prided itself on connecting people to one another. A movement to #deletefacebook trended on rival social media platforms, the company’s top executives were asked to testify in front of legislators from around the globe and the heads of two of Facebook’s most successful brands, Instagram and WhatsApp, stepped down. Investors took notice. Facebook’s market cap closed 2018 around $376 billion compared to nearly $513 billion the previous year.

Prior to some of the major privacy revelations, Facebook’s stock hit its first speed bump of the year in January after announcing changes to its News Feed that would prioritize content from users’ friends and family over brands they follow. Facebook’s stock plunged 4 percent the day after the announcement after CEO Mark Zuckerberg warned investors to expect engagement to decline slightly as a result of the change.

The stock really began to tumble in March when a whistleblower revealed that U.K.-based political consulting firm Cambridge Analytica collected the data of more than 50 million Facebook users without their permission and used it to target voters for Donald Trump’s campaign in the 2016 U.S. presidential election. The reports, which would prove to be the first of many privacy stumbles for Facebook, sent the stock crashing 7 percent on March 19, with its market value cratering nearly $36 billion.

Many users, feeling burned by Facebook for failing to protect their data, pledged to delete their accounts. Brian Acton, the co-founder of WhatsApp who joined Facebook by way of acquisition and announced his departure in 2017, tweeted to his 21,000 followers, “It is time. #deletefacebook.”

Tweet

Acton’s departure from Facebook was followed by 10 more top executives including his own co-founder, Jan Koum. The stock fell almost 1 percent when Koum announced his departure. In September, Instagram’s co-founders Kevin Systrom and Mike Krieger announced that they would leave Facebook, sending the stock down about 0.3 percent the next day.

Facebook’s leaders, Zuckerberg and Chief Operating Officer Sheryl Sandberg, each testified in front of U.S. Congress in 2018 to explain their missteps and appeal to legislators who may be keen on regulating the social media giant. Facebook shares fell nearly 5 percent on March 27 when reports said Zuckerberg agreed to testify in front of Congress. In September, Sandberg appeared before lawmakers, sending the stock tanking close to 8 percent between Aug. 31, the trading day Sandberg released her opening statements, and Sept. 6, the day after the hearing. Facebook’s market value fell by $38 billion over that same period.

Just before Thanskgiving, Facebook was hit with another blow when the New York Times reported that Facebook used a PR firm called Definers to target liberal financier George Soros after suspecting him for funding an anti-Facebook group. After the report came to light, Facebook said it cut ties with Definers. Facebook’s share price slid share close to 9 percent from its close on Nov. 14 to its close on Monday following the report.

Zuckerberg has a tradition of making public his New Years Resolutions. In the past, he’s chosen to wear a tie every day and to only eat meat that he’s killed himself. This year, he took on a more sober challenge in a post on his public Facebook page.

Link

“For 2018, my personal challenge has been to focus on addressing some of the most important issues facing our community — whether that’s preventing election interference, stopping the spread of hate speech and misinformation, making sure people have control of their information, and ensuring our services improve people’s well-being. In each of these areas, I’m proud of the progress we’ve made,” Zuckerberg wrote, listing out a number of initiatives the company has taken on to tackle these issues. “I’m committed to continuing to make progress on these important issues as we enter the new year.”

Subscribe to CNBC on YouTube.

Watch:
Social media detox — why quitting Instagram and Facebook made me happier

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At the start of 2018, the so-called FAANG stocks — Facebook, Amazon, Apple, Netflix and Google-parent Alphabet — were top picks.

Four of the five tech stocks had gained roughly 50 percent the year before, excluding only Alphabet, which rose more than 30 percent in 2017. Facebook was on the heels of its best year since 2013, and Apple was having its best year since 2010.

But the tech stalwarts stumbled in 2018, amid widespread calls for regulation and industry privacy scandals. Rocky trade negotiations with China dragged the overall market lower and opened up profit-taking opportunities among the highest-flying, high-valued tech stocks.

Here’s where each of the FAANG stocks stands heading into 2019:

Facebook ended the year 25 percent down for 2018, well into bear market territory. The plunge makes for Facebook’s worst year of trading, and its only down year since going public in 2012.

The company hemorrhaged market valuation and investor clout as privacy scandals weighed on user metrics and the platform’s ad-based business model. Facebook’s top executives were grilled by Congress and raked over the coals in public domains.

Facebook will have to face questions from the FTC and ongoing challenges to its user base in 2019, leaving the stock vulnerable to more dips.

Amazon ended 2018 more than 28 percent up, making it one of the better performing FAANG stocks for the year.

The e-commerce giant continued to expand its reach into other industries, delving further into health care and media. It launched new brick-and-mortar stores to ground its retail presence. And it launched a nation-wide search for a second headquarters, ultimately announcing significant economic investments in three new locations outside of Seattle.

Amazon stock took a beating in the fourth quarter of 2018, weighed down by market turmoil and weaker than expected guidance for the holiday season. The stock has shed more than 20 percent since September.

Amazon, like Facebook, has been at the center of calls for regulation. Experts and lawmakers, including President Donald Trump, have called for antitrust reviews of the company. Any significant action on that front in 2019 could hit the stock.

Apple closed almost 7 percent down for 2018, making for the stock’s worst year of trading since the 2008 financial crisis. That comes after the stock passed a historic $1 trillion market cap, as the first publicly traded U.S. company to do so.

Apple now trades well below the benchmark, and at a lower valuation than Microsoft.

Apple battled uncertain sales figures and smartphone market saturation, with too little momentum in wearables and home devices to make up the difference. The stock’s worst day of trading in 2018 came after its fiscal fourth quarter earnings report, during which Apple announced it would stop reporting individual unit sales and revenue figures for the iPhone and its other biggest product lines.

Apple largely avoided the scandal and regulatory pressure the other FAANG stocks felt during 2018. But its slowing growth, uncertain future and proximity to volatile stocks dragged its value lower — and could continue to do so into 2019.

Netflix outperformed its FAANG peers in 2018, gaining nearly 40 percent during the year.

The company upped its original programming spend to fend off competitors like Hulu, Amazon, HBO and the soon-to-launch Disney+ streaming service. Netflix saw success with more original TV shows and movies, across more countries, than in past years, and announced notable content partnerships.

The company continues to burn through cash, though, which could hang over the stock in 2019.

Alphabet ended the year practically flat, down just under 1 percent in 2018.

The company suffered its own privacy and content moderation reckoning, though arguably to a lesser degree than Facebook’s, and defended its business practices before Congress. Google also faced backlash from its own employees around the company’s handling of misconduct and discrimination and answered to EU antitrust regulators to the tune of several billion dollars in fines.

Despite all of that, the company’s ad revenue continued to grow and its “Other Bets” like self-driving car company Waymo made notable strides.

A minimal loss for the year, alongside painful losses among other FAANGs, could bode well for Google going into 2019.

WATCH:
Tech had a rocky 2018. Here’s what 2019 might look like.

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Activision Blizzard shares moved down 1 percent in after-hours trading on Monday after the company said that it has informed its chief financial officer, Spencer Neumann, that it plans to let him go. For now he has been placed on a paid leave of absence.

While Activision Blizzard made those assertions in a regulatory filing, Reuters reported that a source familiar with the matter told the news wire Neumann had been poached by Netflix to become the steaming giant’s new CFO. The video game company declined to comment on that report.

The news comes after a rough year for the gaming company, whose shares have fallen 26 percent in 2018. Last month the company’s stock fell 10 percent after it reported a decline in its number of users.

The plan to terminate Neumann, who joined in 2017 after a stint at Disney, is “unrelated to the Company’s financial reporting or disclosure controls and procedures,” according to the filing. Neumann will have a chance to argue that there isn’t reason to terminate his employment. But effective Tuesday, the company’s chief corporate officer, Dennis Durkin, will take on CFO responsibilities.

Neumann, 48, received $9.47 million in total compensation in Activision Blizzard’s most recent fiscal year, a filing says. He sits on the board of the nonprofit Make-A-Wish Foundation of America.

The company declined to comment.

WATCH: Activision Blizzard sinks after reporting decline in monthly active users

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