The Rundown - Investors Shrug Off Steel & Aluminum Tariffs, McDonald's Posts Worst U.S. Sales Drop Since Pandemic

Episode Date: February 10, 2025

Stock market update for February 10, 2025.Follow us on Instagram@therundowndaily

Public.com presents the rundown. Your daily market update in five minutes. My name is Zadadmani, and today is Monday, February 10th. In today's episode, we preview this upcoming week, including new tariff's threats from the president. We'll break it all down. We also recap earnings from McDonald's and tell you about opening eyes plans to be less reliant on Nvidia. Then stick around to the end of the show for some fun facts and a mini rant about the Super Bowl commercials. All right.

Let's go. Well, guys, the markets are coming off a wild week. You know, last week we had tariffs, we had earnings, there was a mixed jobs report, which sent the markets on a roller coaster, and ultimately finished last week in the red, thanks to a big sell-off on Friday. For the week, the S&P was down 0.2% and the NASDAQ dropped 0.5%. Now, we're starting this week off like we did last week, talking about tariffs. President Trump on Sunday announced that he plans to impose a 25% tariff

on all steel and aluminum imports. He also announced that he would issue retaliatory tariffs on countries that tax U.S. imports. So yeah, we got more tariffs drama this week, and I wonder if we're going to get the same kind of whiplash that we had last week. I think the market is still trying to figure out what kind of impact these tariffs will have on the economy.

Now, beyond just the tariffs drama, we're also getting more earnings this week. We got some big-time names like McDonald's, Shopify, Coca-Cola, Supermicro, DoorDash, Lyft, Reddit, Coinbase, and Airbnb are just some of the names to report earnings this week. We're going to be covering a ton of those earnings on the podcast this week, along with the CPI report, which comes out on Wednesday morning. That report will tell us what kind

of inflation there was in January. So there's a lot to talk about this week, and it's a great time to subscribe to the podcast if you haven't already. Let's run through some headlines. Starting with McDonald's. They just reported earnings this morning, and just like their ice cream machine, it was kind of hit or miss. Let's start with the good stuff. First, the company did meet earnings expectations. But the revenue for the quarter was dragged down by weak performance in the U.S. Same store sales in the U.S. dropped 1.4%. That's the steepest decline in nearly five years. And a key reason for that was the E. coli outbreak back in October that was linked to the McDonald's quarter pounder burgers. That E. coli outbreak caused hundreds of customers to get sick. Unfortunately,

one person also died. And that caused traffic at restaurants to drop because of the CDC investigation into the incident. On top of the E. coli issues, the customers that are coming to McDonald's are spending less when they visit. Now, this is likely because the company is starting to offer more deals, like they have the $5 value meal. So customers are taking advantage of that, but that means less revenue for the company. Now, the good news is outside of the U.S., sales were pretty strong. McDonald's global same store sales were up 0.4%, which ended a streak of back-to-back quarterly declines. So like I said, it was a mixed bag, some good, some not so good. Investors seem to be focusing more on the good parts because McDonald's stock is up around 3% this

morning in reaction to these earnings. All right, let's shift gears and talk about OpenAI. No, I'm not here to talk about their terrible Super Bowl commercial. I'll probably talk more about that in a bit. I want to talk about how Open AI is working on their own AI chips. According to reporting from Reuters, in a few months, the AI giant is going to be sending their design over to TSM to manufacture the chip. This is all in efforts to shift away from relying on Nvidia chips. Now, the process of getting a working chip made in-house might take longer than just a few months. Like it usually takes TSM six months to create a new chip, and if OpenAI's first set of chips has flaws,

it could take longer for the final product. But at some point, Open AI's plans is to scale up their chip manufacturing. You know, I mentioned in the deep dive episode over the weekend that Nvidia has been the biggest winner of the AI boom over the last two years because of the crazy demand for their AI chips. But the biggest threat to their business is companies like OpenAI and other big tech companies working to create their own chip. Invidia currently dominates 80% of the AI chip market.

that might not be the case much longer. Invita investors don't seem to be super worried about this, though, because Nvidia's stock is up more than 2% this morning, so they just totally ignored this news. Maybe the markets don't think the opening eye can pull off a successful chip design. Let's talk about some stocks making moves today. Shares of the telehealth company, him and hers, are up slightly this morning, following their controversial Super Bowl ad last night that had some critics and politicians calling them hypocritical and misleading.

The ad showed the healthcare company as the good news, guy in the complicated U.S. health care system. The ad painted the system rigged against its patients, designed to put profits over people. The ad claims the system is built to keep us sick and stuck, and that the $160 billion weight loss industry feeds

on that failure. But the ad ends with him and hers promoting their own weight loss product. So that had a lot of people calling them hypocrites. Now, a spokesman from him says the message is meant to raise awareness about the obesity health crisis and highlight the lack of access to treatment. But health experts

are criticizing the company for not disclosing the possible risks associated with these compounded weight loss medications and also for being part of the problem. Hems sells compound weight loss drugs, which are basically copycat versions made by the brand names like Nova Nordisk and Eli Lilly. There's been an insanely high demand for these drugs. As a result, Hymns has benefited from this. Their stock is up more than 300% over the past year, and the revenue has jumped more than 50% year over year in the months following the release of their obesity drug.

And I think investors think this ad is going to help them sell more. weight loss drugs because their stock is up around 2% this morning. Now on the flip side, shares of Semtech are plummeting after the semiconductor company revealed that its copper edge product would sell less than previously expected. The lower sales has to do with their change in architecture. They expect net sales to be around $50 million with no expected ramp up. So a drop in copper edge products could have a big impact on the company. And shares of Semtech are down more than 30% this morning on this news. Let's wrap the show with a fun fact. And let's talk about the Super Bowl, specifically Super Bowl ads.

Nike aired its first Super Bowl commercial in 27 years. And in typical Nike fashion, the ad had star-studded athletes, including WNBA star Caitlin Clark. There was also track stars to Carrie Richardson. And I think this is a sign that Nike is ready to double down on marketing. We know, we've talked a lot about Nike over the last few months. They're losing market share to their rivals like Hoka and On. But their new CEO, Elliot Hill, who took over back in the fall, he's a Nike lifer. started to work in there back in the 80s, and I think he's ready to take Nike back to the glory days,

where Nike was kind of known for their marketing. The company increased their marketing budget by 6% in 2024 to $4.3 billion, and I got a feeling they're going to spend even more in 2025. Now, I'm still not sure if making cool commercials matters anymore, like it did 10, 15, 20 years ago. Most people don't watch TV commercials. Everyone's just consuming social media now. So I guess we'll have to see if this increased marketing spend will make Nike cool again

and help increase their sales. Also, I want to rant about the Super Bowl a little bit. Obviously, the game was really bad, right? The Chiefs got blown out. The Eagles are Super Bowl champs. It wasn't a great game. The halftime show also, I think, was kind of underwhelming. I was hoping for Kendrick to bring out more bangers.

But what I really want to rant about is the Super Bowl commercials. Is it me or were the Super Bowl commercials just way better back in the day? I just feel like the commercials were just way more creative 10, 15, 20 years ago. But this could just be a sign that I'm turning into a boomer. Speaking of which, one of my favorite ads that I liked was the one from Google. That one got me choked up a bit, all right? I also like the Stella commercial with Dave Beckham and Matt Damon. That was pretty good.

But beyond that, there wasn't that many that I liked. Opening eyes, Super Bowl commercial, like, didn't make any sense. It's like, dude, you have Chad GPT. Like, show off how cool chat GPT is. Why are you showing dots? Anyways, rant over. Shout out to the Philadelphia Eagles and all their fans for winning the Super Bowl. This is going to be a very insufferable next 12 months.

But you guys are champs. I do want to point out that whenever a Philadelphia sports team wins a championship, stocks don't typically do that well. The last time the Eagles won the Super Bowl back in 2018, the stock market had its worst performance in a decade. Well, all right, guys, that's the rundown for today. Should be another fun week. We're going to have a lot to talk about, including tariffs, more earnings. We got a CPI report.

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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 its subsidiaries. You should make your own financial and investment decisions or consult. professionals. Learn more at public.com disclosures. In partnership with Ayedimani, brokerage services for U.S. listed, registered securities are offered by Open to the Public Investing Incorporated, member FINRA and SIPC.