The Rundown - Chipotle Approves 50:1 Stock Split, Intel Wins $8.5B from CHIPS Act

Starting point is 00:00:00 Public.com presents the rundown, your daily market update in five minutes. My name is Zadmani, and today is Wednesday, March 20th. In today's episode, we preview the Fed meeting. What will the Fed say today? What color ties Jerome Powell going to wear? Do investors even care about the Fed anymore? We're going to discuss. We also dive into some tech news like the $8.5 billion funding that Intel got from the U.S. government

Starting point is 00:00:23 to help build chips on U.S. soil, and how Microsoft continues to make AI moves by stacking the most AI talent in the world. And finally, we end the show highlighting some stocks making moves today, like why investors are loving Chipotle's latest move. All right, let's get into it. Well, guys, the stock market just hit a new record high. The S&B 500 closed at record highs on Tuesday for the 18th time this year. And the NASDAQ and Dow also had winning days yesterday.

Starting point is 00:00:51 I'm kind of surprised by this because we have a Fed meeting today. And typically leading up to the Fed meeting, investors tend to be a bit cautious because Because they don't know what Jerome Powell could say at the press conference, but this month, investors just don't seem to care. They're not bothered by anything. And the markets just keep chugging along to new all-time highs. And look, I'm not complaining. I mean, it feels good to see green whenever I open up the public app and see my portfolio. Now, just to get you guys ready for this press conference, there's not really a lot of surprises expected. The market thinks there's a 99% chance the Fed keeps interest rates the same. I think the biggest question right now

Starting point is 00:01:22 going into this meeting is, what color ties Jerome Powell going to wear? Because I think he's worn in purple like the last four or five months in a row. So I wonder if he's going to switch it up. But more importantly, what is the Fed going to say about when we should expect interest rate cuts? Are they going to change their stance at all? Because Jerome Powell and the Fed has said multiple times that interest rate cuts are coming soon. But remember, the Fed has two jobs, stable prices and maximum employment. And we've had hotter than expected inflation reports the last couple months and showing that inflation still isn't at the Fed's 2% target. And the job market continues to stay pretty hot. So the Fed doesn't really have a reason to cut rate.

Starting point is 00:01:55 anytime soon. Right now, according to the Fed watch tool, there's a 60% chance to Fed cut rates at the June meeting. But yeah, if you want to watch the press conference, it's at 2.30 p.m. Eastern, and the press conference usually lasts about an hour. And if you don't want to watch Jerome Powell talk about monetary policy for some reason, then that's all good. I'll be watching the press conference and I'll recap the most interesting stuff in tomorrow's episode of the rundown. All right, let's run through some headlines. We got some tech-heavy headlines to talk about this morning. Starting with Intel, the White House announced that Intel would receive $8.5 billion in funding to help bring chip manufacturing to U.S. soil. This funding is connected to the

Starting point is 00:02:31 Chips Act, which was passed back in 2022 to help lower the U.S.'s reliance on Asian-made semiconductors. Because a quick fun fact, only 12% of chips are made in America per the Wall Street Journal. The Chips Act was the government's respond to help build out more chip manufacturing here in the States. And Intel seems to make a lot of sense for this. Because unlike companies like Nvidia or AMD, which mostly focus on designing chips, but manufacturing them overseas in Taiwan from TSM, Intel actually designs and manufactures their own chips. Intel said they're going to be building factories and research centers in New Mexico, Oregon, Ohio, and Arizona. And investors seem to be liking this news because Intel stock is up more than 2% in pre-market

Starting point is 00:03:11 trading. And the other big tech news that a lot of AI people were freaking out about was Microsoft hiring Mustafa Suleiman to head its AI division. Now, most people don't know Silliman, but this dude is legit and has a stacked resume when it comes to AI. He previously founded the AI company DeepMind, which was acquired by Google back in 2014 and kind of set up Google's AI efforts today. And after leaving Google, Suleiman co-founded Inflection AI, which Microsoft was actually an investor along with NVIDIA, Bill Gates, former Google CEO Eric Schmidt. Well, Satya Nadella, CEO of Microsoft, was like, you know what, I'm just going to hire Suleiman and his entire team to come work for me. To lead Microsoft's consumer AI business. That is in

Starting point is 00:03:54 insane. Microsoft continues to make big moves when it comes to AI. It started with their big investment in Open AI a couple years ago. Now this, no wonder they're the most valuable company in the world, right? So shout out to Nadella and Microsoft just out here making things happen. Let's talk about some stocks making moves today. Chippole stock is up nearly 5% in pre-market trading because they announced a 50 to one stock split. That means that investors will receive 49 shares for every one share of Chipotle that they own. It's Chipotle's first stock split in its 30-year history. history. Chipotle's current stock price is around $3,000. And after the split, share prices will be around $60. Shares will be sent out at market close on June 25th. Typically, companies like

Starting point is 00:04:34 to do stock splits because it makes their stock price more approachable, because some people might get intimidated whenever they see a stock price in the thousands of dollars, even though these days you can kind of buy fractional shares, like on public.com. You know who really needs to do a stock split at this point? Is Nvidia? The stock is approaching $1,000. Actually, Jensen Wong, the CEO of NVIDIA, did an interview with Jim Kramer yesterday, saying, that they're going to think about doing a stock split. I don't know. Like, what are you guys think? Do you think the stock splits even matter anymore? Do you think that Nvidia should do a stock split? I mean, obviously, we're seeing a jump in Cepoli's stock price from the stock. So, it matters a

Starting point is 00:05:05 little bit. We'll make that the Spotify poll of the day. So if you're listening to this episode on Spotify, open up this episode and vote in today's poll. Okay, let's talk about a stock, not doing so good today. Caring. Caring is the maker of luxury brands like Gucci, and the stock is down more than 14% in pre-market trading. This fashion giant announced that they expect sales to drop more than 10% year over year in Q1. Not great news. They wanted that sales from its Gucci brand, which makes up like two thirds of its profits,

Starting point is 00:05:31 fell 20% in the first quarter. And a big reason for the slump is weakening demand from luxury shoppers in China. If you look at their Asian Pacific region, excluding Japan, it accounts for 35% of sales for caring last year. So it's a pretty big chunk. I'm not a big fashion guy,

Starting point is 00:05:46 but yeah, some drama in the fashion world. All right, let's wrap the show with a quick fun fact of the day. Today's fun fact is about chocolate. specifically cocoa. There is a cocoa shortage in the world, and it's sending the price of cocoa to historic highs. The price of cocoa has more than doubled this year to $8,400 a ton. Now, the reason for this is that extreme weather has caused a weak harvest in West Africa where most of the cocoa in the world is produced. Like the Ivory Coast in Ghana alone produced 60% of the world's output in 2023.

Starting point is 00:06:18 And this has caused companies like Hershey's and Mondalese passing the price to consumers for their chocolate products. Just can't catch a break. All right, guys, that's all I got for you guys today. Now, this is the part of the show where I show for five-star rating. So if you enjoy the show, please consider giving us a five-star rating on whatever podcasting platform you listen to. Apple, Spotify, we'll take all of it. Your support is really helping us grow the show. And these five-star ratings do matter a lot. Thank you for everyone that's already rated. We really appreciate it. Thank you guys again for listening today. And we'll see you back here tomorrow. This is the rundown, your real-time resource for news events and trends in the

Starting point is 00:06:50 markets. All views presented in this 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 Zaid Admani, brokerage services for U.S. listed, registered securities are offered by Open to the Public Investing Incorporated, member FINRA and SIPC.

The Rundown - Chipotle Approves 50:1 Stock Split, Intel Wins $8.5B from CHIPS Act

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