The Rundown - Musk Unveils 'Grok 3' to Take on ChatGPT, Southwest Airlines to Cut 15% of Workforce

Episode Date: February 18, 2025

Stock market update for February 18, 2025.

Public.com presents the rundown. Your daily market update in five minutes. My name is Zadadmani, and today is Tuesday, February 18th. In today's episode, we preview an upcoming week, which includes earnings from Walmart and Alibaba. We also tell you about a potential takeover of Intel and why the iconic company might get broken up. Then stick around to the end of the show to find out

why gold traders are flying gold bars from London to New York. City. All right. Let's go. Well, guys, both the S&P and NASDAQ finally snapped their two-week losing streak last week. The S&P was up 1.5%. The NASDAQ was up 2.6%. Even the Dow was up up 0.5%. Now, I know I talk a lot of smack about the Dow, but it's actually been the best performing index out of the Big Three this year, but still don't care about the Dow. Now, we got hit with a lot last week. All right? The week started off with Trump slapping 25% tariffs on steel and aluminum. We got a hot CPI report midweek. But despite all of that, stocks still rallied to near all-time highs. And a big reason for that could be the strong earnings season so far. 75% of the companies in the S&P 500 have reported

earnings already. And it's been a pretty solid showing for fourth quarter earnings. Earning season rolls on this week. We got some noteworthy companies reporting this week like Walmart and Alibaba. Walmart earnings always get a lot of attention because it gives investors and insight of the overall health of consumers, since Walmart is the largest retailer in the world. And Alibaba is getting a lot of attention this year because their stock has been on fire. It's up nearly 50% for the year. So I'm sure investors are curious to hear what Alibaba has to report. We're going to be recapping those earnings and more throughout the week. I know we've got a short week coming up, but we'll have a lot to cover.

So make sure you guys are subscribed to the podcast to stay in the loop. And by the way, the audio sounds a bit different today. That's because I'm recording today's show from Cancun. You know, I decided to take the family on a quick, weekend vacay. I am flying back tonight, though, so the audio should sound normal tomorrow. But yeah, if you hear sound to the ocean in the background of today's show, now you know where that's coming from. Let's run through some headlines. Starting with Intel. The struggling chip company has become an acquisition target of both Broadcom and TSM. Each company is reportedly considering taking over separate pieces of Intel. According to the Wall Street Journal,

Broadcom is looking into Intel's chip design and marketing business, while TSMC is, of course, considering buying up some of Intel's chip plants. Broadcom and TSMC are not working together on this, but if each were to follow through on these moves, it would break up one of the most iconic and storied U.S. companies. Intel has fallen behind in the AI chip boom, even though it's just one of the handful of companies that designs and manufactures chips. Intel was one of the biggest beneficiaries of the Biden administration's Chips Act, which would have awarded the company nearly $8 billion in subsidies from the U.S.

government, but all that government funding hasn't really turned around the company. In fact, Intel's stock dropped around 60% last year. And that's why it's become an attractive acquisition target. Now, Intel is reportedly working on a plan with the Trump administration to offload its chip-making plans to TSM, which produces about 90% of the world's semiconductors. And this could be a politically charged event due to a foreign company taking control of assets of a storied U.S. company like Intel. And more importantly, there's the geopolitical implications and the tense relationship of Taiwan and China and the increased role that semiconductor chips are playing in national security. Now, talks of these deals are in the early stages.

Nothing is official. But if Intel does get broken up, it would be an end of an era. And Intel, as we know it, would essentially no longer exist. So we'll see how this all shakes out. Right now, investors seem to be celebrating this news. Intel stock is up more than 8% this morning at the time of this recording. Let's shift gears and talk about Elon Musk. Elon has been a pretty busy guide this year, to say the least.

But he was able to find time to announce the release of a new AI model. called GROC 3. GROC 3 was released by XAI, which is an AI company that Elon founded back in 2023. And the early reviews of this model seems to be promising. There was rumors that GROC 3 might not be that great or might not come out for a while. And that's why Elon made a $97 billion offer

to buy Open AI last week. But that doesn't seem to be the case. I haven't tried out GROC yet, but it is available to the public. You do need to have a premium plus Twitter or X subscription to try it out. And I think GROC having access to all the data from X or Twitter,

whatever you want to call it, could give it a competitive advantage compared to other models. It's being trained on real-time data. So yeah, AI wars are heating up, and this one is extra spicy because of the beef between Elon and OpenAI's CEO, Sam Altman. Let's talk about some stocks making moves today. Shares of Southwest Airlines are up this morning after the company announced plans to cut about 15% of their corporate workforce. Now, what's crazy is this is the first time in the company's 53-year history that they are, doing mass layoffs. The airline has come under pressure from activist investors to turn the company around as their business struggles to compete with Delta and United Airlines. Just to give you some

perspective here, Southwest's stock has dropped about 10% over the last 12 months. In the same time, United Airlines stock has gone up 130% and Delta stock has gone up more than 61%. So Southwest has a lot of work to do to turn around the company, and this is just the first in many steps to do that. Markets are liking that those shares of Southwest are up more than 2% this morning. in reaction to this news. By the way, I actually flew on Southwest from Houston and the Cancun, so do my part to help out. Still don't love the open seating thing they got going on. Now, speaking of United, shares of United Rentals are down this morning. United Rentals is the largest equipment rental company in the world. No relations to the airline,

and their stock is dropping today because they got outbid to take over a company by a smaller competitor. Hork equipment services made a better offer to take over H&E, and United Rentals shareholders weren't happy about that. Shares of United Rentals are. down around 2% this morning in reaction to this news. Quick fun fact, United Rentals has a higher market cap than United Airlines. United Rentals is worth about $48 billion at the time of this recording, while United Airlines is worth around $32 billion. So United Rentals, pretty big company. Let's wrap the show with a fun fact. The price of gold is about $20 an ounce cheaper in London than it is in New York City. And because of this price difference, people are flying gold bars on planes from

London to New York to take advantage of this price arbitrage. Gold prices are at record highs right now nearly $3,000 an ounce. The demand for gold has gone up because of economic uncertainties. But because of Trump's threats of blanket tariffs on all imports, the price of gold is cheaper in London compared to New York City. So people are now flying physical gold bars across the Atlantic to take advantage of this arbitrage. I mean, just doing some quick math here, it can be pretty profitable. Like if you bought 50 pounds worth of gold in London, stuffed it in a check bag and flew it to New York City and sold it, you could make around $16,000 in profit from the price difference. You know, as long as your bag arrives at the destination. Actually, you might want to put this in a

carry-on just in case. So yeah, you can see why people are doing this. Might need to make a quick trip to London soon. Well, all right, guys, that's the rundown for today. Hope you guys enjoyed today's today's show. If you did, consider giving us a five-star rating on Apple and Spotify. 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. Special shout out to Jack, a listener of the pod. I actually ran into him at the airport over the weekend, which was really cool. Thank you for supporting the show, Jack. And of course, 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 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. Respective professionals. Learn more at public.com disclosures. In partnership with Zayidamani, brokerage services for U.S. listed, registered securities are offered by open to the public investing incorporated, member FINRA and SIPC.