The Rundown - Biden Issues New AI Trade Restrictions, iPhone Sales Slump in Q4

Episode Date: January 13, 2025

Stock market update for January 13, 2025.

Public.com presents the rundown. Your daily market update in five minutes. My name is Zaid Admani, and today is Monday, January 13th. In today's episode, we preview this stacked week coming up. We got earnings, we got inflation, so much to look forward to. We also tell you about new AI rules from the Biden administration that has Nvidia upset. Then stick around to the end of the show to find out why Moderna shares are down and why Tim Cook got a raise last year. All right.

Let's go. Well, the stock market is coming off a down week, and Friday was particularly brutal. Last week, in just four trading days, the S&P 500 lost 1.9% and the NASDAQ dropped 2.3%, which was the worst weekly decline since November. Now, the reason for the big sell-off on Friday was the strong jobs report that came out Friday morning, showing that the labor market is pretty strong and unemployment rate is going down. And you would think that would be good. Well, investors are worried that a strong job. labor market means the Fed won't cut rates anymore, and that had investors selling their stocks. I wanted to more detail about the jobs report on Friday's show, so go check that out if you missed

it. But yeah, overall, investors are feeling pretty shaky right now, despite the economy being on solid footing. Now all the attention turns to this week. We got five trading days this week, finally, and it's a stacked week. We are getting inflation data this week. On Tuesday morning, the PPI report comes out, which measures wholesale inflation. And then on Wednesday morning the CPI report comes out, which is the most well-known inflation measurement. That is expected to come in at 2.9%. So we'll see what the official numbers are on Wednesday. On top of the inflation stuff, we are getting a ton of earnings this week.

JP Morgan, Wells Fargo, Goldman Sachs, and BlackRock are just some of the companies to report on Wednesday. And then on Thursday, we have TSM, Bank of America, and United Healthcare. So yeah, we are officially kicking off earnings season. Favorite time of year. Oh, and I should also mention the Supreme Court is likely to rule on the TikTok ban case sometime this week. It might happen on Monday.

And I'll be honest, it's not looking good right now for TikTok. All indications are pointing to the Supreme Court upholding the ban. But we should get an official ruling pretty soon. If the Supreme Court does uphold the ban, TikTok will officially go dark on January 19th, unless there's a last minute deal to save the company. So for those of you guys that were relying on TikTok to get your finance news, it's a great time to subscribe to this podcast. I'm going to miss TikTok.

Let's run through some headlines. President Biden's got about a week left at the White House, but that's not stopping him from making moves. The Biden administration released new rules regarding AI chip exports, and it's making some people pretty upset. The Biden administration wants to keep these advanced AI chips out of the hands of China and Russia. And the way they're doing that is by restricting the export of these AI chips. Essentially, these rules divide the world into three categories. The first category is the United States and 18 of its closest partners. Those countries will have no restrictions on importing AI chips.

chips. Then you have countries with the strictest restrictions like China and Russia. And then everyone else is somewhere in the middle. These countries will have a cap on the number of AI chips that they can import. But they can increase that number by entering into a special agreement with the U.S. government. See, the Biden administration was worried that countries would import AI chips and then turn around and sell them to China. So with these new rules, they're hoping that that doesn't happen anymore. Now on top of that, they want the U.S. to remain the center of the AI industry. There's money flowing into a lot of parts of the world like the Middle East to become the center of AI, but that's going to be pretty hard to do if there's a restriction on chip imports.

As you can imagine, not everyone is happy about these rules, especially chipmakers, like Nvidia. They are pretty upset about these new rules, and they came out with a response not holding back. They said that these new rules threatened to derail worldwide innovation and economic growth, and they actually are hoping that the Trump administration might change that. So we'll see what happens when Trump takes over the White House and if he decides to change these rules or not. According to the New York Times, the Biden team has been in contact with the new administration,

about these rules. Open AI is also in talks with the Trump administration. The maker of ChatGPT laid out a plan called AI in America. They're hoping that policymakers can help improve the development of AI and the U.S., but they also believe that America should allow Middle East investments and participation in AI. They want the U.S. to allow Middle Eastern countries to make investments in AI because if they're blocked, then those wealthy countries will just turn to China. So yeah, something to keep an eye on as the new administration enters the White House in one week. Let's shift gears and talk about Apple and iPhones. According to the report from Bloomberg this morning,

iPhone sales slipped by 5% in the holiday quarter. It looks like the release of Apple Intelligence didn't seem to do much for iPhone demands. According to this report, Apple's worldwide market share dropped to 18%, which was down from 19% from earlier, and the company sold 2% less phones in 2024 than I did the year before.

You see, the part of the reason for that decline is that Apple still hasn't rolled out Apple intelligence for iPhone 16s in China, which is opening the door for Chinese smartphone rivals to capture more that market. It's not a good sign that the most valuable company in the world's flagship product is having declining sales. What's funny is that Mark Zuckerberg also threw some shaded Apple over the weekend on the Joe Rogan podcast. He said that Steve Jobs invented the iPhone and they're kind of sitting on it 20 years later. Now personally, I would disagree with

Zuck there a bit. I like clowning on Apple all the time, but Apple has released pretty popular products. You know, they have the AirPods, which are incredibly popular. Their Apple Watch is popular. And to me, the best invention they've had recently have been the Apple Silicon M-chips that are on all their new computers. Those are incredible. So, yeah, I feel like Zuck is a little out of pocket there, but I see what he's saying, and Joe Rogan seemed to agree with him. In fact, Joe Rogan said that he's switching from Apple to an Android phone.

So Joe Rogan is now part of the Green Bubble gang. But you know what, though, I'm enjoying this beef between Zuck and Apple. And I'm looking forward to seeing how Apple responds back. Tim Cook has to be cooking something up. Let's talk about some stocks making moves today. Shares of the pharma company intercellular therapies are, up this morning on the news that they're being acquired by Johnson and Johnson. This $14.6 billion deal will give Johnson and Johnson access to intercellular's oral drug, Capulita, which is approved

to treat schizophrenia and bipolar depression. Capulata brought in $675 million in sales last year and has potential to reach $5 billion, according to Johnson and Johnson. As a result, shares of intracellular are up more than 30% this morning, and this deal is the largest in the biotech sector in over a year. Now, sticking with the pharma theme, Moderna shares are tumble. after the company lowered its 2025 sales outlook. The company said it's losing market share in COVID vaccines, and the rate of vaccinations are down 7% from last year. The majority of Madonna shares will come from its COVID vaccine

and its new respiratory virus shot. Shares of Madonna are down more than 20% this morning on this news. I think Madonna should probably start looking beyond just COVID for growth. They are planning to release 10 new products over the next couple years. So we'll see what happens. Also, I wanted to mention Abercrombie. Their shares are falling. Despite the company raising its outlook after the holiday,

season. This one is kind of confusing for me because Avercromby reported a 21% sales growth in Q4 of last year. And they expect sales growth in this quarter to be between 7 and 8%, which is higher than expected. But I guess that wasn't good enough for investors and shares of Abercrombie are down more than 15% this morning. Let's wrap the show with a fun fact. Apple CEO Tim Cook got a pretty nice raise last year, about 18%. Now his base salary stayed the same. $3 million a year. It's been that way for the last three years. But that's just a small friend. of his total comp package. My man made more than $74 million last year, and $58 million of that came from his equity compensation. Now, Apple says that the reason Tim Cook got a raise in

24 was because his deal was on the low end compared to other CEOs. Now, look, I like Tim Cook. I think he's an underrated CEO, but he's had some duds over the last couple years. Apple's revenues haven't really grown much. And on top of that, you add in the disaster that was the Apple Vision Pro, like no one's talking about that. So maybe Zuck was right. Apple's got to figure some stuff out. All right, guys, that's the rundown for today. Hope you guys enjoyed today's episode. We have an action-pack week coming up, so I'm really looking forward to it.

The next few weeks should be very interesting. We got earnings. We got a new president coming in. We got the FOMC meeting. We got inflation data. We got a TikTok ban. I mean, there's going to be so much stuff to talk about. I'm so hyped about it.

So make sure you guys are tuning in every day to stay in the loop of everything that's happening. By the way, if you guys enjoy the show, consider giving us a five-star rating on Apple and Spotify. Leave us a comment on Spotify, vote in today's Spotify poll. Follow our Instagram account for clips and bonus content. All that engagement really does help us out and it helps other people find the show. Thank you guys so much for listening. Shout out to Mike and Connor for all the help behind the scenes. And we'll see you guys back here tomorrow.

This is the rundown, your real-time resource for news events and trends in the markets. All views presented in the show reflect the opinions of the guests. You should not take any mention of a publicly traded security as recommendation to buy, sell or hold that security. Rundown guests are not financial advisors and are not affiliated with public holdings or its subsidiaries. You should make your own financial and investment decisions or consult. respective professionals. Learn more at public.com disclosures. In partnership with Zayidimani, brokerage services for U.S. listed, registered securities are offered by Open to the Public Investing Incorporated, member FINRA and SIPC.