The Rundown - Layoffs Surge on DOGE Cuts, Klarna IPO Expected as Early as Next Week

Episode Date: March 6, 2025

Stock market update for March 6, 2025.

Public.com presents the rundown. Your daily market update in five minutes. My name is Zaid Admani, and today is Thursday, March 6th. In today's episode, we'll give you the latest on the tariffs drama. There's some relief coming, but I expect more volatility in the coming days. We'll also tell you how Walmart is responding to these tariffs, and then give you the details on the latest tech company planning to IPO soon. Then stick around to the end of the show to find out how many people were laid off last month. The number hasn't been this high since 2020. All right.

Let's go. We got more volatility on Wall Street yesterday as investors try to figure out what is actually going on with tariffs. The White House announced yesterday afternoon that automakers would be getting a tariff exemption for 30 days. This exemption applies to automakers

that comply with the U.S.-Mexico-Canada trade agreement that Trump signed during his first term, which all three major automakers in the U.S., GM, Ford, and Salantis do. So they're going to get an exemption from these tariffs, and that announcement sparked a market rally. The S&P 500 jumped 1.1% yesterday, and the NASDAQ was up 1.5%. So the tariff roller coaster continues. In fact, this was the fifth day in a row. The S&P 500 has moved 1% in either direction.

Now, the automakers getting this tariff exemption is huge. We've talked all week how auto parts and cars are some of the biggest imports from Canada and Mexico into the U.S. But this exemption is only for a month. So I don't know what's going to happen after that. Like these automakers can't redo their entire supply chain in four weeks. So I'm still confused on what's going to happen long term. And to add to the confusion, Trump has also hinted at carving out even more exceptions,

but then he's also said that reciprocal tariffs are going to go into effect on April 2nd. So again, a lot of confusion right now. And I think everyone, especially Wall Street, is looking to get more clarity. Because right now it feels like the tariff policy changes depending on how Trump is feeling that day. So until we get some long-term clarity, I think we're going to continue to see more volatility in the markets. Now, to add to all the tariff drama, tomorrow morning the February jobs report comes out, and that report will tell us how many jobs were added or lost in the U.S. economy last month. You know, there has been some big job cuts at the federal government because of the Doge stuff.

So I wonder what impact that will have on the numbers? If we get weak numbers in the February report, I mean, that could cause even more chaos in the markets on Friday. The report comes out tomorrow morning. We'll recap the numbers and the market reaction to that report on tomorrow's episode. So make sure you guys are subscribed to the podcast to stay in the loop. Let's run through some headlines. Starting with Walmart. Walmart is already working on a plan to do something about tariffs.

You know, Walmart has said in previous earnings calls that tariffs would lead to high. prices for consumers. But they're trying to avoid that by asking some Chinese suppliers for a major price cut on items, according to a report from Bloomberg. Walmart is hoping the Chinese suppliers will eat the full cost of the tariffs, which is currently 20% for imports from China. That way, they don't have to pass along increased prices to U.S. consumers. But they're getting some pushback according to this report. The suppliers say they're already operating on thin margins. I'm talking like 2 to 3%, so they can't cut their prices by 10 to 20% without taking a major loss. So if Walmart can't convince these suppliers to cut prices to offset the tariffs, then Walmart

might have to raise prices. And that's something that economists and companies have warned about for months now, tariffs leading to higher prices. In fact, earlier this week, both Target and Best Buy say they expect prices to go up within days because of these tariffs. And because prices will go up, retailers are expecting a slowdown for their business this year. And that's why shares of Walmart, Target, and Best Buy have been down over the last month. We'll get a clearer picture on the impact of these tariffs in the next round of earnings,

which will start in May. So we have to wait a few months. And again, who knows what the tariff policy actually will be in the next week or two. All right, let's shift gears and talk about Calarna. The Buy Now Pay Later firm is expected to file for an IPO as soon as next week, according to a report from Bloomberg. Calarna is a pretty big company. They have 85 million customers.

and they're seeking a valuation of more than $15 billion. Kalarnat would be one of the highest profile tech companies to IPO in a while. And their valuation has swung pretty aggressively over the last few years. Like back in 2021, their valuation peaked at $46 billion in the private market and then plummeted all the way down to $7 billion just a year later. I'm telling you guys, 2021 just was not real. Now, the company has been cleaning up its balance sheet and cutting costs ahead of their planned IPO in an effort to get back to profitability,

something that it reached routinely until 2019 when it prioritized U.S. expansion. So yeah, we'll keep an eye out for Kalarna's IPO, and it'll be interesting to see how the IPO goes in such a volatile market right now. Let's talk about some stocks making moves today. Shares of Alibaba are rising this morning after the Chinese e-commerce giant

unveiled a new AI model called the QWQ-32B. Side note, guys, we gotta get better at naming these AI models, because it's just getting out of hand now. QWQ32B, R1, 40, O3 Mini-high, 3.7 Sonnet. What's going on here? I'm sure we can figure this out. If we got AI, we can figure out the naming stuff. All right, rant over. Now, this model is pretty special because Alibaba says its reasoning capabilities can compete against Deep Seeks

R1 model. Deep Seeks R1 model came out back in late January, so it took Alibaba like a month and a half to get an updated model going that matches the capabilities of deepseeks. So investors seem to be pretty excited about that and shares of Alibaba are up more than 2% this morning on this news. I feel like if the markets weren't so distracted by these tariffs, then Alibaba stock would have skyrocketed after news like this. Now sticking with the AI theme, let's talk about Marvell. Their shares are plummeting after the chip company reported earnings and provided a disappointing revenue guidance. The company admits their Q1 revenues would be in line with expectations. And I think the markets

wanted to see more. Marvell has been one of the big winners of the AI trade. Their data center revenues grew by 78% year over year last quarter. But I think investors just have higher expectations now from these AI companies. So despite Marvell beating on earnings and revenue estimates for the past quarter, shares are down more than 18%. Similar story happened with Invidia. Solid earnings. Stock still dropped. And finally, we have Macy's. They reported earnings this morning and their stock is falling after the company reported a revenue miss. The company has been trying to turn around the business. Macy's CEO, Tony Spring, who took over the job about a year ago,

is working on improving and investing in better performing Macy's locations while closing underperforming locations. The turnaround plan not going so well, and shares of Macy's are down more than 5% this morning. Let's wrap the show with the fun fact. Well, today's fact, not really fun, but worth mentioning. According to the latest data, layoffs surged in February to their highest level since 2020. And a lot of that is because of all the federal workers that were laid off by Elon Musk, the Department of Government Efficiency.

172,000 people were laid off last month, which is a 245% jump from January. More than the third of that came from government jobs. But there have been some high-profile corporate cuts, too. For example, Southwest Airlines laid off 1,700 workers, which is about 15% of its workforce. It was the company's first ever mass layoff. Meta also laid off 3,600 workers. So layoffs are unfortunately starting to happen, which is why the February jobs report tomorrow could be crucial.

Well, all right, guys, that's the rundown for today. Hope you guys enjoyed today's episode. We'll have a great episode tomorrow to wrap up the week, so definitely tune in for that. And if you guys enjoyed today's episode and have like 12 extra seconds, consider giving us a five-star rating on Apple and Spotify. Don't forget to vote in 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. Your real-time resource for news events and trends in the markets. All views presented in the show reflect the opinions of the guests.

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