The Rundown - Congress Pushes to Ban DeepSeek, Zyn Powers Philip Morris Earnings

Episode Date: February 6, 2025

Stock market update for February 6, 2025.

Public.com presents the rundown. Your daily market update in five minutes. My name is Zaid Admani, and today is Thursday, February 6th. In today's episode, we tell you why gold prices keep climbing. We also tell you about a new law that would ban Deepseek in the U.S. Then stick around to the end of the show for an earnings recap of Peloton, Philip Morris, Ford, and Roblox. One of these companies is getting cooked right now. All right, let's go.

Wednesday was a bit of a chopy day in the stock market. Both the S&P and NASDAQ started the day in the red, but had a late rally to finish the day with a win. The S&P was up 0.4% and the NASDAQ was up 0.2%. AI stocks were some of the biggest winners yesterday. Nvidia, Broadcom, and Super Micro were some of the best performing stocks in the S&P 500. So I'm sure a lot of you guys that bought the Nvidia dip are relieved to hear that. And you know who's feeling really good right now?

Are gold investors because the price of gold keeps soaring. It's at record highs right now, trading it around $2,900 in ounce. I mean, personally, I've never really been a gold guy, but it's hard to ignore the Hodge street that gold has been on over the last two years or so. Gold was up 27% last year outperforming the S&P 500, and it's up more than 9% this year. You know, historically, when investors get nervous, they tend to buy up gold. And right now we have uncertainties around tariffs, and there's some geopolitical uncertainties as well.

So that might explain the run-up and gold prices. Now, we are going to learn more about the overall economy in the state of the job market tomorrow morning when the January jobs report comes out. Current estimates call for about 150,000 jobs added in January, but because of the LA fires and really cold weather, there's still some uncertainty on what the final numbers will be. But we'll break it all down in tomorrow's episode when the numbers officially come out. Oh, and we're also getting Amazon earnings tonight. That'll be pretty interesting. And it'll be a major milestone for the company because the forecasts are calling for Amazon passing Walmart in quarterly revenue for the first time ever. We'll get the official numbers tonight and talk about them in tomorrow's episode.

So be sure to tune in tomorrow to stay in the loop. We'll have a lot to talk about. Let's run through some headlines. Well, Deepseek might get banned in the U.S. soon. Lawmakers are planning to introduce a bipartisan bill that would ban the Chinese AI app on U.S. government devices on grounds of national security. Lawmakers are concerned that Deep Seek has a secret code built into their platform that can send user data to China Mobile, which is a company that's owned by the Chinese government, and it's been banned from doing business in the U.S., according to the Wall Street Journal.

Now, this sounds familiar. This is kind of what happened to TikTok. TikTok was banned from U.S. government devices in 2022, and eventually banned from the U.S. entirely earlier this year. Now, the TikTok ban is still in limbo, but I wonder if that's what's going to eventually happen to Deepseek. It's been a couple weeks since Deepseek took the world by storm by introducing their AI model that was just as good as OpenAI's model,

but significantly cheaper. It jumped to the top of the app. store charts and it's still near the top it's currently sitting at number three in fact they've gotten so popular the companies had to restrict the amount of people due to their server capacities being overwhelmed i mean i'm not going to lie i'm still using deep seek because the results are fantastic and it's free but yeah if tictock is any indication we're not going to be able to use deep seek for much longer, so enjoy it while you can. Let's shift gears and talk about another really popular Chinese app that's at the top of the

app store charts. Timo, they're having to change their business strategy in the wake of Trump's tariffs against China. The Chinese e-commerce giant was the most downloaded app in 2024, and they built their business entirely off of cheap goods being shipped from China to the U.S. Timo was able to sell products at very low prices by avoiding duty fees through a rule called the de minimis exception, which allowed goods worth less than 800. $100 to avoid paying fees or tariffs.

Well, Donald Trump has ended that rule, and on top of that, he's slapping a 10% tariff on all imports from China. So that's going to have a significant impact on Timo's business. We kind of talked about this on Monday's episode. So what Timo is doing now is they're promoting more local products in their apps. Timu has been building up their U.S.-based sales for a while now. They probably saw the de minimis exception going away at some point, and now 20% of their sales come from U.S.-based goods.

But still, the majority of products when you order them on T-MU. were being shipped directly from China. And that's why they were able to make it so cheap compared to Amazon and other sellers. So I wonder if they'll still be able to offer super low prices like a dress shirt for $8 and a full-on suit for $25 if the products are being shipped from the U.S. Timo's parent company is PIN Duo Duo, ticker symbol PDD. And their stock hasn't reacted that bad from these new rules. It's actually up for this week.

But yeah, definitely a stock to keep an eye on. Let's talk about some stocks making moves today. We're going to do a rapid fire of earnings. Starting with Peloton, their shares are up after the fitness company beat sales estimates, and they continue to get closer to profitability. The company's still not profitable yet. They lost $92 million in Q4, but that's down from the $195 million they lost in Q4 of 2023. So they're making progress, and the stock is up more than 10% this morning in a response to these earnings.

Honestly, I don't know anyone that still has a Peloton. I sold mine like two years ago, but good for them for keeping at it. Another stock having a big morning is Philip Morris, the cigarette maker, reported strong demands for their Zin nicotine pouches. The company shipped over 165 million cans of Zin pouches in the U.S. last quarter, which is up 42%, and they expect shipments to grow 41% next year. And this Zinnisance has investors hype and shares are up more than 8% this morning at the time of this recording. Now, on the flip side, Ford is not having a great morning. Shares of the automaker are down after the company warned they could say, a $2 billion drop in their profits this year because of potential tariffs against Mexico

and Canada. Tariffs are currently unpaused this month, but a long-term deal still hasn't been announced, which is making Ford executives and investors nervous. On top of that, Ford said they don't expect to make a profit from EVs for at least two years. So that has investors selling with Ford stock down more than 5% this morning in reaction to these earnings. And finally, Roblox is getting absolutely cooked.

Their stock is down more than 20% after the gaming platform reported fewer than expected the daily active users and soft bookings. Bookings is another measure for sales. That came in at $1.6 billion, which is below the $1.7 billion that Wall Street was expecting. Now, daily active users were up 19% from a year ago to $85.3 million, but that was short of the $88.4 billion that was expecting. So all of that has investors just freaking out right now. Let's wrap the show with the fun fact. Open AI is going to have an ad during the Super Bowl. Now, with Super Bowl ad cost like $6 million. So Open AI is going to spend more on one ad than DeepSeek did to train their entire

AI model. So there you go. I wonder if 2025 will be remembered as a year of AI ads. Remember back in 2022, every major crypto company was advertising during the Super Bowl? I think this year it's going to be every major AI company. We're going to see Gemini. Maybe Claude's going to be in there. Maybe perplexity.

So keep an eye out for that during the game. Well, all right, guys, that's the rundown for today. Hope you guys enjoyed today's episode. We're going to have an action-packed episode tomorrow to end the week talking job support, talking Amazon earnings. So make sure you guys tune in for that. If you guys enjoyed today's episode, consider giving us a five-star rating on Apple, on Spotify, voting today's Spotify poll, leave us a comment on Spotify. 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. 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. Run down guests are not financial advisors and are not affiliated with public holdings or subsidiaries. You should make your own financial and investment decisions or consult. Respected professionals.

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