The Rundown - Meme Stocks are Back, Biden Hits China with $18B in New Tariffs

Starting point is 00:00:00 Public.com presents the rundown your daily market update in five minutes. My name is Zadmani, and today is Tuesday, May 14th. In today's episode, we talk about meme stocks. They are back. This episode is going to give you flashbacks of 2021. And then stick around to the end of the show to learn how much money Roaring Kitty, aka Keith Gill, OG meme trader, made from GameStop back in 2021. I can see why they made a movie about this guy.

Starting point is 00:00:27 All right, let's go. Well, guys, stocks were off to a mixed start this week. The NASDAQ finished higher. The S&P was essentially flat, and the Dow finished in the red for the first time in eight trading days. But let's be honest, yesterday was all about meme stocks because they are back. We mentioned this briefly in yesterday's show that OG meme trader Roaring Kitty was back posting on social media for the first time in three years. You know, he was the main guy that was leading the charge for GameStop back in 2021 when it first started to pump. Well, it feels like 2021 again because.

Starting point is 00:01:00 the OG meme stocks were flying yesterday. GameStop and AMC both jumped 70% yesterday and that momentum seems to be carrying over into today as well. I'm looking at the pre-market right now. I double check this, but both of these stocks are up another 80% at the time of this recording. I'll be honest with you guys. I thought the whole meme stock thing was a zero interest rate phenomenon, you know? But no, I mean, interest rates are at the highest they've been in over 20 years, but yet a guy tweeting out of meme is adding billions of dollars. in market catch to these meme stocks. Crazy. And I wonder what Jerome Powell feels about this. We're never going to get rate cuts, are we? I wonder how long this meme stock rally is going to last this time.

Starting point is 00:01:39 Because remember, CPI report drops tomorrow morning. And what happens if that report is hotter than expected? I guess we'll find out. But until then, I guess we can enjoy the ride. Let's run through some headlines. Starting with the Biden administration, they're implementing new tariffs on $18 billion worth of Chinese imports. This move includes rates. raising tariffs on Chinese EVs from 25% to 100%, and the tax on solar cells went from 25% to 50%. The tariffs on semiconductors will double from 25% to 50% by 2025. The White House says the goal is to protect American businesses from unfair practices, and at the center of the new trade restrictions is the clean energy industry, which the Biden administration

Starting point is 00:02:21 has been investing heavily in. The tariffs are designed to block low-cost goods from China from flooding into the U.S. market and hindering the progress in the U.S. clean energy industry. Now, the impact on the economy is currently TBD and stirring up some debate about what the consequences could be on the GDP and inflation. Biden says that there's going to be no inflationary impact because the tariffs are on just a specific industry. But Goldman Sachs has estimated every percentage point increase in the effective tariffs rate

Starting point is 00:02:49 would send consumer prices up by 0.1% and cause inflation to spite. It'll be an important issue to watch as we head into election season and Biden and Trump try to one-up each other on who is tougher on China. Switching gears, let's talk about the earnings report this morning from Home Depot. And it wasn't great, thanks in part to a slowing housing market. Home Depot posted its sixth straight quarter of falling sales. Same store sales failed by 2.8%, which was a steeper drop than investors were anticipating. Now, higher interest rates and elevated inflation is causing consumers to hold off on big-ticket

Starting point is 00:03:21 items for home renovations. Plus, a ton of people renovated their homes back in 2021 when interest rates were cheap. But these days with mortgage rates above 7% and a low housing supply keeping prices higher, there's just not that many people who are looking to fix up their new homes. Home Depot, though, still a great vibe on Saturday mornings. And finally, we're also keeping an eye on Google I.O., which kicks off today. Google is expected to deliver news on Android 15 and their upcoming AI capabilities. AI has been the other hot topic this week along with meme stocks.

Starting point is 00:03:50 Open AI showed off their new AI model, GPT40. And some of these demos from OpenAI that have dominated my timeline, were incredible. So now everyone's waiting to see what is Google's response to that. I'm sure they're cooking up something good. If anything big comes out at Google I.O., we'll update you guys tomorrow. Let's talk about some stocks making moves today. Starting with Planet Fitness, shares are rising after JP Morgan upgraded the stock to overweight with a price target of $78 a share, citing an improvement in franchise economics. The move comes after Planet Fitness raised prices for its standard gym membership for the first time since 19,

Starting point is 00:04:27 The standard subscription now costs $15 a month off from $10 a month, and the plan gives you access to only your home gym and no other locations. It's a pretty significant price increase and restrictions, so we'll see how this works out. Get it? Oh, man. Planet Fitness stock is up 3% in trading north of $67 per share. Now, a stock not working out this morning is Alibaba. Shares are falling after the company reported an 86% drop in earnings from a year ago. The drop in profits was due to its investment portfolio taking a valuation hit, but despite the earnings dropped, the company beat revenue estimates for the quarter with customer management sales rising by 5% year over year and its international e-commerce business showing a 45% growth year over year. But still, it wasn't good enough for investors and shares are down more than 4% after its earnings release.

Starting point is 00:05:15 Let's wrap the show with a fun fact. We're sticking with the meme stock theme and making today's fun fact about Roaring Kitty, whose real name is Keith Gill. Gil was largely credited with starting the original GameStop rally back in early 2021. He initially invested $53,000 in Game Stock stock back in 2019. And at the height of the GameStop rally back in 2021, his stake was valued at over $48 million. And the reason we know this is because he would share screenshots of his portfolio and his stake on Reddit. So he became a legend overnight and even had a movie made about him called Dumb Money

Starting point is 00:05:52 that starts Seth Rogan. Now, there's no confirmation on if he, actually sold any of his GameStop stock or took any profits. I mean, for his sake, I really hope that he did, at least some of it. But man, turning 53,000 to 48 million is absolutely insane. I wonder if he's been buying any GameStop over the last few months. I'm sure we're going to find out pretty soon because why else would he start posting on social media again. Well, all right, guys, that's the rundown for today. Very meme stock heavy, but we had to talk about it. And it looks like we'll be talking about it more on tomorrow's show along with the CPI report, which is dropping

Starting point is 00:06:23 tomorrow morning. So make sure you guys are tuning in to stay in the loop of all the meme stock madness and staying up to date on all of the economic data. By the way, go check out the latest episode of the leading indicator podcast from public.com. They head on the CEO of an autonomous robot lawnmower company. Very interesting conversation. We'll put the link in the show notes. Thank you guys so much for listening. Shout out to Mike and Connor for all the hard work behind the scenes. 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 this show reflect the opinions of the guests.

Starting point is 00:06:55 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 its subsidiaries. You should make your own financial and investment decisions or consult. Respective professionals. Learn more at public.com disclosures. In partnership with Zayidemani, brokerage services for U.S. listed, registered securities are offered by Open to the Public Investing Incorporated, member FINRA and SIPC.

The Rundown - Meme Stocks are Back, Biden Hits China with $18B in New Tariffs

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