The Rundown - Musk Emerges As Possible TikTok Buyer, Amazon Preps AI Upgrade for Alexa

Episode Date: January 14, 2025

Stock market update for January 14, 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 Tuesday, January 14th. In today's episode, we're talking TikTok. The band is coming up, but there's new rumors that Elon Musk might end up buying the app. We'll tell you more. We also discuss Amazon's plans to upgrade Alexa with AI. Then stick around to the end of the show to find out why Americans are choosing to buy lab-grown diamonds,

and the impact it's having on the largest jeweler in the world. All right, let's go. Markets finally showed some life yesterday. Unlike the Minnesota Vikings, the S&P 500 made a late comeback yesterday and finished 0.2% higher for the day. It was solid given the fact that the S&P was down nearly 1% at one point yesterday. Bitcoin also had a nice bounce back too. After dropping to under $91,000 on Monday,

the price bounced back to over $95,000. So that was nice to see. The NASDAQ, on the other hand, couldn't pull out a win. It finished the day down 0.4%. Tech stocks were having a tough day overall yesterday after new restrictions by the Biden administration were announced regarding AI chip exports. We talked more about those restrictions on yesterday's show

and Nvidia's response to those rules, so go check that out if you missed it. Now, on yesterday's show, we also talked about all the data that's expected to come out this week. We're getting multiple inflation reports. We're getting a ton of earnings. Well, this morning we just got the producer price index report which measures inflation.

at the wholesale level. Wholesale inflation was up 0.2% month over month in December, which is less than the 0.4% that was expected. So that's a pretty positive sign, and hopefully we get something similar in the CPI report tomorrow. The CPI report comes out tomorrow morning.

We'll be covering it in tomorrow's episode, so make sure you guys are subscribed on the podcast to stay in the loop. Let's run through some headlines. One of the biggest stories this week is the TikTok ban. Currently, TikTok is scheduled to be banned in the U.S. January 19th. The only way it doesn't happen is if the Supreme Court rules in favor of TikTok this week or if TikTok agrees to sell to a U.S. company. Well, there's a report last night from Bloomberg

saying that China is considering offloading TikTok's U.S. operation to Elon Musk if the app does get banned in the U.S. TikTok's parent company, Biden, is still holding out hope for the Supreme Court to rule in its favor so they don't get banned. But based on all the reporting, it looks like the Supreme Court intends to uphold the law that would ban TikTok. Remember, TikTok was a lot of originally banned because of national security concerns and the concerns of the Chinese government having an influence on TikTok's parent company, bite dance. So the only option to not get banned would be for the app to sell to a U.S. company. And I guess Elon Musk might end up being the buyer. Now, as crazy as it sounds, it kind of makes sense. For one, Elon already owns another social

media app, X.com. On top of that, Elon seems to have a relationship with the Chinese government because of Tesla's operations in the country. And he's also BFFs with President-elect Donald Trump. Now, TikTok was quick to call these reports pure fiction. But there are some experts saying that China would want Elon to buy TikTok because that would allow them to maintain some leverage over TikTok because of Tesla's massive business in China. Remember, China accounts for about 40% of Tesla's overall sales. So this is a pretty complex issue.

There's rumors flying around. I mean, the deadline is fast approaching. There's just so much that needs to happen over the next five days. So I don't know. It just looks more and more likely the app will get banned, at least temporarily. But I'm sure we're going to have more answers over the next few days. Let's shift gears and talk about Amazon. You know, at one point, I thought they might be a dark horse candidate to buy TikTok.

Well, right now it looks like they're focused on improving Alexa with AI. They want to turn Alexa into an AI agent. They're hoping that this makes Alexa smarter so we can help complete tasks, like finding a list of restaurant recommendations for dinner, or assisting with several aspects of a smart home like lights, security, and temperature. I feel like this was the original vision, but now with AI, they might be able to pull it off. The company hasn't been working on this upgrade since 2022, pretty much right when chat GPT dropped for the first time.

But it's taken some time to develop this because it's been a challenge to replace the old Alexa technology with the AI-LLM technology. So yeah, smarter Alexa is coming soon. I'm looking forward to it because I'll be honest, all I use Alexa for these days is to maybe play some music, set a timer here or there, maybe do some random Googling.

I mean, it's pretty useless beyond that. So if they can make it smarter somehow, I would love that. As of right now, though, there's no release date for the new Alexa. So it might be a few months. I think the bigger theme here is the potential for AI agents. That's the hot buzzword for this year. I've talked about it before, but you're going to see more and more tech companies bring it up. In fact, OpenAI CEO Sam Albin wrote a blog post saying that he believes that AI agents could enter the workforce this year.

So I guess the future is that our jobs get replaced with AI agents and we can just sit at home and order our groceries through Alexa and get it delivered through Whole Foods. What a future. Let's talk about some stocks making moves today. Now, speaking of Amazon, shares about it. Teledoc are rising this morning following a new partnership with Amazon. As part of this deal, Amazon will boost access and streamline the process for enrolling in Teledoc's programs that help patients manage chronic conditions such as diabetes and hypertension. Teledoc, which is a telehealth company, has had a dramatic fall from grace after becoming a pandemic favorite for investors.

Four years ago, the stock had reached nearly $300 a share. Today, it's hovering around $10 a share. The stock is up more than 4% this morning in reaction to this news. Still got a long ways to go, before they hit all-time highs. Now, on the flip side, shares of Signet Jewelers are down this morning after the company lowered their sales outlook for the holiday period. Signet Jewelers is the parent company

of K-jewelers and Zales. There's a largest retailer of diamond jewelry and they expect same store sales to decline by more than 2% last quarter. The company blamed the decline in sales on consumers, spending less on expensive, overpriced diamonds. Actually, you know what?

Let's talk more about diamonds. Let's wrap the show with a fun fact. Americans are choosing to go with lab-grown diamonds over natural diamonds. In a 2024 survey of the U.S. consumer by the online wedding planner platform, The Not, 52% of respondents said their engagement ring featured a lab-grown diamond as the center stone. That's up from 46% in 2023, and it was 12% back in 2019. So lab-grown diamonds have come a long way.

They're becoming very popular with consumers. And I guess it shouldn't be that surprising, because lab-grown diamonds have essentially the same chemical makeup as a natural diamond. I mean, the naked eye can't tell the difference between the two. And they're much cheaper than a natural rock. According to the Wall Street Journal, a lab-grown 1.5-carat diamond was about 80% cheaper than the equivalent quality natural diamond as of the first quarter of 2024. So it's no surprise that consumers are going with lab-grown diamonds.

Now, natural diamond producers are kind of freaking out. De Beers, one of the largest diamond miners in the world, reduced their diamonds price by 10 to 15%, which is very uncommon. Not going to lie, I really wish lab-grown diamonds were a thing when I got married, like almost a decade ago. It would have saved me a lot of money. All right, guys, that's the rundown for today. Hope you guys enjoyed today's episode.

Tomorrow's episode should be an absolute banger. We are getting the CPI report. We are getting a ton of earnings reports as well. So stay tuned for that. And if you guys enjoy the show, if you guys enjoyed today's episode, consider giving us a five-star rating on Apple, on Spotify. Vote in today's Spotify poll. Leave us a comment on Spotify.

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