The Rundown - CPI Comes in Hot, JetBlue Stock Takes Off

Episode Date: February 13, 2024

Stock market update for February 13, 2024.

Welcome to the rundown, your daily market update in under five minutes. My name is Zadadmani, and today is Tuesday, February 13th. In today's episode, we talk inflation. We got some new inflation data come out this morning, and it shocks some investors. We'll get into it. I also recap the earnings data from some big-time companies that you've heard of, and then we end the show with a fun fact about Super Bowl ratings. All right, let's get into it.

Let's start with a quick stock market recap from Monday. It was a mixed day on Monday. In the morning, it looked like the three major indices we're going to finish. at another record close, but that's not what happened. On Monday afternoon, stocks experienced a post-lunch slump, just like I did. The S&P and NASDAQ both dropped off and ended up finishing the day in the red. The Dow Jones, though, did finish in the green, marking another record high for the index. But things aren't getting any better today.

All three major indices are in the red at the time of this recording around noon-eastern, after some not-so-great inflation data came out this morning. So let's talk about inflation. CPI data for January was released this morning, and it came in a little too high. January's CPI was up 3.1% year over year, which is higher than the 2.9% that was expected. And it was up 0.3% when you compare it to December, which was also higher than expected. And if you look at core CPI, which takes out prices of food and energy because it tend to be more volatile, that was up 3.9% higher than the 3.7 that was expected. So this is definitely a step in the wrong direction.

Remember, the Fed's inflation target is 2%. So the fact that we saw inflation creep back above 3% is not very encouraging. That's one of the reasons why bond yields are rising and the stock market is selling off today. Because this significantly reduces the chance of a rate cut anytime soon. Like, it's hard to imagine the Fed cutting rates when inflation continues to be this sticky. The odds for the Federal Reserve cutting interest rates at the March meeting is now 5.5% according to the CME Fed Watch Tool. It was 16% on Monday and it was over 60% just a few weeks ago. It's just crazy how things can change so quickly.

All right, let's shift gears and talk about earnings. We had a ton of big companies report earnings this morning. so let's run through some of them. Spoiler alert, all of these companies' stock dropped after their earnings came out. Part of that has to do with the earnings. Part of that has to do with the overall market is just being down today. Let's start with Shopify. Shopify's Q4 earnings were actually pretty good, but the stock still dropped.

Shopify did $2.14 billion in revenue in Q4, higher than expected, and their earnings came in at 51 cents a share, also higher than expected. But yet the stock is still down more than 10% today at the time of this recording around noon eastern because of their forecast for Q1. The Q1 guidance came in lower than Wall Street estimates, mostly due to a higher than expected operating expense this quarter. Let's talk about Hasbro. They reported weaker than expected earnings. Q4 revenues dropped 20% to $1.29 billion missing estimates, and their earnings came in at $0.38 a share, which is also below estimates. Q4 earnings was clearly a miss here, and the company also expects another 3 to 5% revenue dip this year.

The investors did not like the sound of that, which is why the stock is down more than 5% today at the time of this recording around noon eastern. Talk Marriott. They reported Q4 revenues of $6.1 billion, slightly missing estimates of $6.2 billion, but they actually reported profits to be 27% higher than last year to $847 million, which actually came and hired than what Wall Street was expecting. But Marriott stock is still down more than 5% today because of their forecast for 2024 came in lower than Wall Street estimates. And finally, let's talk about Coca-Cola. Coca-Cola earnings meant expectations, nothing to get super excited about. The revenues in Q4 were $10.85 billion, higher than expected, and their earnings were 49 cents a share, which meant expectations.

But what I found to be most interesting about Coca-Cola's business was that their volumes actually dropped, meaning they sold less stuff, but they made up for it by increasing prices. The stock is down more than 1% today, though, at the time of this recording around noon Eastern. We just talked about four companies whose stock dropped. Let's talk about a company whose stock is up today. That would be JetBlue.

JetBlue airline stock jumped more than 15% today at the time of this recording on the news that activist investor Carl Icahn bought a 9.9% stake in. in the company because Carl considers the company to be undervalued. This is a classic case of a famous investor thinks the company's undervalued. The market gets excited and the stock jumps. By the way, JetBlue just got a new CEO, Joanna Garrity. She started on Monday. So what a way to start a new job.

Stock jumping 10%. All right, time to wrap up the show with a fun fact. Today's fun fact is about the Super Bowl. Of course it is. We can't stop talking about it. The ratings for the Super Bowl came out and more than 123.3.4 million people watch the Super Bowl on Sunday. That's up 7% from last year's 115 million, and it is now the most watched broadcast in history. Not super surprising this was kind of expected.

I do wonder, though, like, are we ever going to get peak Super Bowl? Like, is there ever going to be a time where the ratings for the Super Bowl go down and stay down? It seems so unlikely right now. All right, that's all I got for you guys today. Thank you guys so much for listening, and we'll see you guys back here tomorrow. This is Public Live, your real-time resource for news events and trends in the markets. All views presented in this show reflect the opinions of the guests.

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