The Rundown - Egg Prices Cause Inflation Plot Twist, Google Algorithm Dents Reddit's User Engagement

Episode Date: February 13, 2025

Stock market update for February 13, 2025.

Public.com presents the rundown. Your daily market update in five minutes. My name is Zadadmani, and today is Thursday, February 13th. In today's episode, we talk about the economic impact of rising egg prices and what it could mean for the future of rate cuts. We also recap earnings from Reddit, Dutch Bros, and Hertz. Then stick around to the end of the show to find out why Texas is one step closer to becoming the center of the finance universe.

We're going to call it Y'all Street down here. All right, let's go. Well, yesterday the stock market got off to a pretty bad start. Stocks tanked at the open after the hotter than expected inflation report initially freaked out investors. But stocks did climb higher throughout the day, and the NASDAQ actually finished the day in the green. The S&P 500, on the other hand, was down around 0.3%. Still, not too bad given how the day started. No, I have to mention meta because their win streak is now extended to 18 positive days in a row.

We might have to start having the dynasty question here. Like, where does this rank compared to the wind streak from the 2016 Warriors or the 07 Patriots? Sound off in the comments and let me know. Now, like I just mentioned, the big story yesterday was the hot CPI report. Well, we just got another inflation report this morning. This time, the PPI report, or some people refer to as the wholesale inflation report. And yeah, it's more bad news. Wholesale inflation was up 0.4% month over month in January,

which is higher than the 0.3% that was expected. So this is yet another sign pointing to inflation. starting to become a problem again. And something that could potentially make the inflation problem even worse are tariffs. Earlier this week, President Trump slapped a 25% tariff on all steel and aluminum imports. And it looks like the president's not done making tariff moves this week. Trump posted on Truth Social this morning that he intends to impose reciprocal tariffs against countries that have a tariff on U.S. goods.

And he's going to have a press conference today at 1 p.m. Eastern Time at the Oval Office to give us more details. So yeah, we'll recap that on tomorrow's episode. make sure you guys tune in. Might get a pretty choppy day in the markets today, depending on how that press conference goes. Honestly, though, given everything that's happened this week with the steel tariffs and the hot CPI print

and now these potential additional tariffs, the market's reaction hasn't been as drastic as I expected. Like, the S&P is still positive for the week, and it's within 1% of record highs. I mean, I'm not complaining, just a little surprised by that. Let's run through some headlines. And let's start with talking about eggs. Everyone feels it. The price of eggs have gone through the roof.

Egg prices soared to a record high $4.95 in January. That's up 15% from just a month earlier. That's up 55% from a year ago. And a lot of this has to do with the outbreak of the bird flu. The bird flu has wiped out more than 100 million egg carrying hens since 2022. But this isn't just about an expensive brunch. Higher egg prices is just one of many reasons that inflation is now becoming a problem again. The latest CPI reported that inflation was up 3% in January, with prices up 0.5% from a month earlier.

That's the biggest month-over-month jump since August of 2023. And the hot inflation print yesterday sent the 10-year treasury yield to 4.6%. I know we don't talk much about the bond market on this show, but the 10-year is kind of important because it acts as a benchmark to things like mortgage rate. So the higher the 10-year yield goes, the more expensive it gets to buy a house. And with Jerome Powell and the Fed indicating no signs of a future rate cut anytime soon, the odds of rates coming down aren't great. In fact, the market is now betting on just one rate cut in 2025.

And this could have an impact on President Trump's economic plan because he hasn't been shy of calling for rate cuts. Trump wants low interest rates to go hand in hand with his tax cuts and tariffs, which economic experts say could add to inflation. But lower interest rates could also make inflation worse. So there's a lot to figure out here. So we'll see how this all plays out. Let's shift gears and talk about Reddit.

They reported earnings last night and their shares are dead. and they're blaming it on algorithm changes at Google. The company says that routine algorithm changes at Google resulted in less search traffic to their website. As a result, Reddit missed expectations for daily active users in Q4, specifically for the logout users, people that don't have a Reddit account, but find Reddit through Google. That being said, their daily active users did grow by 39%

and nearly 102 million people, but it just missed estimates, which was 103 million. Now, Reddit says that engagement has since recovered and that it's working on convincing logged out users to create an account because it'll reduce traffic volatility. And also, logged in users are more profitable for Reddit. Outside of that, the finances of Reddit were pretty positive. Revenue was up 71% and the company forecasted Q1 sales above analyst estimates. Now, the stock is down around 5% this morning in reaction to the earnings, but despite the pullback, Reddit shares are up more than 30% year to date and up nearly sixfold

from their IPO last year. Not a bad return for investors who bought the stock when it went public last March. A lot of that excitement is coming from AI. Reddit has struck content licensing deals with OpenAI and Google, which allows those tech giants to use Reddit's content to train their AI models. Those deals now account for about 10% of their total revenue. So it's funny how Reddit's fortunes are tied so much to Google, not just for revenue, but also search traffic. Google really is a kingmaker. Let's talk about some stocks making moves today. Dutch Bros. Stock is soaring this morning after the coffee company beat earnings estimates with their revenues growing nearly 35% year over year. On top of that, Dutch Bros added 156 new locations in the U.S. in

2024, and their same shop transactions growth reached the highest level in two years, growing 2.3% year over year. Now, I don't know if you guys have heard of Dutch Bros. They started off in the West Coast offering good coffee through drive-thrus only, and they've been expanding like crazy. I feel like down here in Texas, I see a new location pop up like every other week. There's one that opened up near my house a couple years ago, and I got addicted to it. I'm not going to lie. They got good. great coffee, they got energy drinks, the staff is always great, so I can see why they're catching on. I'm personally a big fan, and so are investors, because shares are up more than

26% this morning in reaction to these earnings. Now, the same can't be said for Hertz. Shares of the rental car company are plummeting this morning after they reported a $2.9 billion loss in 2024 due to their bet on electric vehicles. You know, Hertz bought a ton of EVs a few years ago, including Teslas, and that hasn't really worked out so far. Hertz is now shifting away from the EV play selling more than 30,000 of their electric vehicles. I guess those Tom Brady commercials weren't getting the job done to boost demand. Hertz recorded a wider earnings missed for the quarter and their stock is down around 11% this morning in reaction to these earnings. If you are looking to buy some EVs, check out Hertz's car sales page because you might be able to score some

good deals. Let's wrap the show with a fun fact. The New York Stock Exchange is coming to Texas, y'all. The New York Stock Exchange announced they're moving to Chicago operations to Dallas and and rebranding it as the NYSE, Texas. I mean, Texas is starting to become a serious finance hub. According to the NYSE, Texas has the largest number of New York Stock Exchange listings with over $3.7 trillion in market cap. And more corporations are moving to Texas too, with META and Tesla thinking about reincorporating in Texas.

So Texas is starting to make some moves in the finance space. In fact, this is the second exchange to announce plans to open up in Texas. Last year, a new venture called the Texas Stock Exchange, backed by Black Rocking Citadel. announced plans to open up an exchange in Dallas. So there might be multiple exchanges operating in Dallas in the next year or so. Honestly, the Dallas City Council needs to rename some street in downtown until y'all street and just go full into the branding.

Well, all right, guys, that's the rundown for today. We got one more show for you to tomorrow to recap the week. And depending on how this tariff press conference goes with Trump today, it could get pretty choppy. So we'll probably have a lot to talk about in tomorrow's episode. Make sure you guys tune in for that. And if you have like 15 extra seconds, consider giving us a five-star rating on Apple, on Spotify, voting today's Spotify poll. Leave us a comment on Spotify. Follow our Instagram account for bonus content and clips of this show.

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 a recommendation to buy, sell, or hold that security. Rundown guests are not financial advisors and are not affiliated with public holdings or it's subsidiaries. You should make your own financial and investment decisions or consult.

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