The Rundown - Nike Announces Layoffs, Affirm Posts First-Ever Profit

Episode Date: August 29, 2025

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Public.com presents the rundown. Your daily market update in under 10 minutes. My name is Zad Admani, and today is Friday, August 29. In today's episode, we'll tell you what the latest inflation report just said and why it's unlikely to change Jerome Powell's mind about rate cuts. We'll also check in on Nike's turnaround strategy and the moves they're making to get their mojo back. Then stick around to the end of the show to find out a shocking fact about NVIDIA's latest earnings report and why it's making me a little bit nervous. We got a great show for you today. Let's go. Thursday was another record setting day for the stock market. The NASDAQ was up 0.5% and the S&P was up 0.3%, which was enough for another record closed. In fact, the S&P 500 crossed a 6,500 point mark for the first time ever.

I think the latest GDP data probably helped the mood a bit yesterday. According to the latest GDP report, the U.S.'s second quarter GDP was up 3.3%, which was a nice rebound from the 0.5% drop that we had in Q1. And investors also seem to be shrugging off Nvidia's earnings from yesterday. You know, Nvidia's earnings were pretty solid, but slightly underwhelming compared to the sky high expectations. We actually broke down the earnings in detail on yesterday's episode, so go check that out if you missed it. So yeah, maybe it's possible the stock market isn't just about NVIDIA anymore. Now, zooming out a bit, let's talk some macro economics because we did just get some inflation data this morning.

The PCE inflation report just dropped this morning. This is the inflation report that the Federal Reserve prefers to look at. It measures inflation slightly different than the CPI report, and it showed that inflation in July was 2.6% year over year. Now, that was in line with expectations, but it is slightly higher than the Fed's 2% target. But I doubt that this inflation report will implement. impact the Fed's decision on whether to cut interest rates or not at the September meeting. You know, based on Jerome Powell's Jackson Hole speech last week, the Fed seems to be more

worried about the softening labor market than the slightly sticky inflation. Markets are currently pricing in an 87% chance of a rate cut at the September 17th meeting. So unless something dramatically changes in the next three weeks, it's looking like the Fed is about to cut rates for the first time this year. And I think that optimism is what's keeping the markets near all-time highs right now. Let's run through some headlines, starting with Nike. Nike announced that they are laying off about 1% of their corporate workforce as part of CEO Elliot's Hill big turnaround play.

Nike's been going through a rough patch recently, so they brought in a new CEO, Elliot Hill, who took over the company back in October, and he's basically undoing everything that his predecessor did. The previous CEO, John Donahoe, he wasn't really a shoe guy, he was more of a tech guy, and he reorganized Nike around men's women's and kids categories and started focusing the company more on fashion and lifestyle instead of athletics. In hindsight, it seems like a pretty obvious bad idea. And I think that corporate strategy might be one reason why Nike kind of fell off in recent years, and the company started losing markets share to newcomers like On and Hoka.

Nike was essentially making clothes and shoes for people going to Pilates and yoga instead of athletes or even people pretending to be athletes. So Elliot Hill is undoing that playbook. He's reorganizing Nike back into being sports-obsessed teams, focused on running, basketball, soccer, you know, the stuff that Nike used to dominate. They're also trying to rebuild relationships with wholesalers like Foot Locker who weren't exactly thrilled with Nike's director-consumer push under the previous CEO. These wholesalers started giving shelf space to Nike's competitors,

and that might be one reason why Hokas and Ons really took off over the past couple years. Turnaround strategy makes sense, but investors aren't quite ready to buy into it just yet. Nike stock is up only 3% this year, which is underperforming the S&P 500, but they are outperforming their competitors like Hoka's parent company Decker's, which is down 40% this year, and on stock is down about 20%. So they are stabilizing the ship, but it is kind of wild to see how Nike's brand fell off so fast in the last few years. Now, sticking with the retail theme here, a lot of overseas retailers are about to be impacted with the latest rules from the Trump administration. The Diminimus loophole

officially ends today, and it's already causing chaos for online shoppers and international postal services. The de minimis rule allowed Americans to buy stuff from overseas without having to pay tariffs or filling out custom forms, as long as the package was under $800. And look, Americans took a big advantage of this rule. Last year, more than 1.3 billion packages came in through that exception. That's nearly 4 million packages a day. Chinese retailers like Sheehan and Timu were big beneficiaries series of that loophole. Now, the de minimis loophole actually ended for Chinese imports back in May, and now it's gone for all countries. So moving forward, even small packages coming from overseas face tariffs ranging from 10 to 30 percent, depending on where they're being shipped from.

And the fallout and the economic impact of this is going to be interesting. I mean, first of all, the rollout has been pretty messy. Foreign post offices have no clue how to handle the new rules. The postal services are the ones that calculate and pay the tariffs, but most aren't set up for that. So now a ton of them, just aren't shipping anything to the U.S. right now? In fact, more than two dozen international postal services, including Germany, Canada, and Hong Kong, have stopped shipping to the U.S. for now

until they can figure out all the paperwork. The Trump administration claims that the de minimis loophole going away will bring in about $10 billion in tariff revenue for the U.S. government. But right now, it's mostly bringing confusion and angry customers wondering where their packages are. Let's talk about some stocks making moves today. A firm shares are ripping higher this morning after the buy now pay later company finally hit profitability for the first time ever.

Now, on top of turning a profit, they also beat on revenue and earnings for Q2, with revenues jumping more than 30%, and gross merchandise volume climbing over 40%. A big part of that growth came from their mega partners like Amazon and Shopify. The gross merchandise volume is the total dollar amount of all the stuff that people buy using a firm. And the GMV from a firm's top five merchants was up 41% last quarter. And customer growth was strong too, up 24% to 23 million active users. So more people are using buy now, pay later to buy more stuff. And that's why investors loved it. A firm stock is up nearly 16% this morning on this news. Now sticking with the winners here, let's talk about Alibaba. Their shares are also moving higher this morning after the Chinese e-commerce giant posted big gains in their cloud division.

which is home to their AI products. Cloud revenue was up 26% and AI is becoming a bigger part of their sales. Alibaba even unveiled a new homegrown AI chip aiming to fill some of the void left by Nvidia's absence in the Chinese market right now. Now, the company also beat on profits for the quarter, but it's not as good as it seems. The profit beat was largely because they sold off some equity investments. Without that, profits would have dropped 18% year over year.

Still, it seems like investors are willing to look past all the negative stuff in the earnings, and are betting on the cloud story, shares of Alibaba are up almost 7% this morning at the time of this recording. Now, on the flip side, Dell's shares are down this morning after the company gave a weak profit outlook for Q3. The miss is due to Dell's storage business, which holds data for clients related to AI and other categories. Their storage business saw sales drop 3% and missed estimates. But beyond the storage business, Dell actually beat on earnings and revenues for Q2. The revenues were up 19% thanks to its AI server business, which surged 69%. No, Dell buys a ton of Nvidia chips and uses it to build AI servers, which they sell and rent out to

enterprises, and the demand for that is booming right now. So Dell's AI future is looking pretty bright, but investors are hung up on the weakness and storage, and that was enough to send the stock down more than 6% this morning. Let's wrap the show with a fun fact. Just two customers made up 39% of Nvidia's Q2 revenues, according to an SEC filing by the company. Now, Nvidia didn't say who these customers were, but referred to them as customer A and customer B in the filing. Customer A made up 23% of sales, and customer B was 16%. The only other hint that Nvidia gave was that these are direct customers, which Nvidia says are not end users of Nvidia's chips. These companies instead buy chips in bulk to build into complete systems and then sell

that to data centers, cloud providers, and end users. So that means that, Customer A and customer B are unlikely to be the big tech companies like Google, Meta, or Amazon, because they tend to buy their chips in complete packages. A couple of companies that could be considered direct customers for Nvidia are Dell and Foxcon. So yeah, I wonder who the two mystery customers are. If you guys have any ideas, let me know in the comments. Also, should we be a bit concerned that Nvidia gets almost 40% of their sales from just two companies? That just seems like a lot, you know?

By the way, if you want more Nvidia content, you should check out our interview that we're going to post on Sunday. I actually talked to a Wall Street analyst about his thoughts on Nvidia and their latest earnings. This analyst just raised his price target for the company. He's bullish on them. I tried to push back a little bit in the interview. Overall, very fun conversation. We'll drop that interview on Sunday morning. I mean, I can't imagine a better way to start a Sunday than listen to two dudes talk about Nvidia.

Well, all right, guys, that's the rundown for today. That's the rundown for this week. As a reminder, the stock market is closed on Monday for Labor Day, so no show. from us, but we are going to post a deep dive episode tomorrow and the interview on Sunday. So if you guys are traveling for Labor Day and need some finance content to listen to, keep an eye on your podcast feed. Thank you guys so much for listening and watching. Shout out to Mike and Connor for all the help behind the scenes.

And we'll see you guys back here tomorrow for the deep dive.