The Rundown - Nvidia Stabilizes After Historic Rout, JetBlue Shares Tank 25%

Episode Date: January 28, 2025

Stock market update for January 28, 2025.

Public.com presents the rundown. Your daily market update in five minutes. My name is Zadadmani, and today is Tuesday, January 28th. In today's episode, we take a look back at the damage caused by Deepseek. Over a trillion dollars was lost in the stock market yesterday. We also recap earnings from Boeing, GM, and Royal Caribbean. Then stick around to the end of the show to find out how much Nvidia stock retail traders bought up yesterday. People were buying the dip.

All right. Let's go. Well, what a wild start to the week. I mean, markets got wrecked yesterday, thanks to a big drop in tech stocks after the emergence of the Chinese AI app, Deepseek. I mean, Deep Seek became a household name overnight, and for good reason, because this thing has straight up spooked investors. The S&P 500 was down 1.5%. The NASDAQ dropped more than 3%. I mean, over $1 trillion dollars were wiped out from the stock market yesterday. And you know what's crazy? I was shocked when I saw this, 70% of the stocks in the S&P 500 actually finished higher on Monday.

So this just highlights that yesterday's drop was mostly concentrated in tech stocks, and since these tech stocks are so big, they brought down the entire index with them. The hardest hit companies were AI chipmakers like Nvidia, which dropped 17% yesterday. They lost almost $600 billion in market cap, which is a record for a single day. It's hard for me to process a company losing more than a half trillion dollars in market. capping a single day. That's wild. Other losers include broadcom, Oracle, energy companies got hit like Vistra and Constellation. So yeah, U.S. stocks got clapped yesterday because of a Chinese AI app wiping out trillions of dollars in value in the process and we were out here worried

about TikTok. I mean, come on. What's interesting is that Deep Seek actually got hit with a major cyber attack yesterday. It was down for a while. So it looks like Sam Altman's not going down without a fight. We actually talked more about Deep Seek and why their breakthrough and AI spooked the markets so bad and potentially change the economics of AI on yesterday's episode. So if you want to learn more about that, go check that out if you missed it. Now the action pack week rolls on. The Fed meeting starts today and ends tomorrow with a decision on interest rates and a Jerome Powell press conference. You know, the markets aren't expecting the Fed to change rates, but the press conference could be a good one. It's going to be a lot of questions about Trump.

We're also getting a ton of earnings this week. We're going to talk about a few of them in today's show. but the major earnings are coming later in the week with Tesla, Meta, and Microsoft reporting on Wednesday after the close and then Apple reporting on Thursday after the market close. So we'll see if the markets can bounce back after the carnage from yesterday.

You know, I feel like the stakes for Microsoft and meta just got higher because I'm sure they're going to get a ton of questions about Deep Seek on their earnings call and questions about the billions of dollars they plan on spending on AI. I'm probably going to tune into the earnings call

to catch it myself. And I'll recap all the good stuff on the pod throughout the week. So make sure you guys are listening in to stay in the loop. Let's run through some headlines. And let's start with Boeing because they just reported earnings this morning and it's not looking so good for them. Boeing just reported a loss for the six straight year in a row.

The company lost $11.8 billion last year. It's the largest loss they've had since 2020. And what's crazy is that 2024 was supposed to be a turnaround year for the Jetmaker, but their business still hasn't bounced back from a series of crises that include safety, issues, manufacturing defects, and worker strikes. Now, just looking at Q4 alone, Boeing reported a $4 billion loss, and their revenues fell short of estimates for that quarter. The company said that results were impacted by the machinist strike that lasted nearly two months and caused delivery delays to customers. I mean, the company's trying to turn things around. They replaced their CEO back

in August, but the new CEO has inherited an extremely challenging situation. Boeing doesn't have a good reputation right now. There's a lot of concerns about their business. In fact, the last time they had a profitable year was back in 2018. They made a record profit that year. But since then, Boeing has lost more than $30 billion following the fatal crashes of their Boeing 737 Max Jets back in 2019. They just haven't turned things around since then. Let's shift gears and talk about Whole Foods. Whole Foods employees have officially voted to form the first ever union at the Amazon-owned grocery chain. The vote took place at a Whole Foods in Philadelphia where about 300 workers participated. The final count in that vote was 130 in favor and a

100 against. So this means these workers are now part of the United Food and Commercial Workers Union, pushing for better salaries and benefits. Workers at the Philly location are hoping this sparks a movement. They're hoping this inspires employees at the other 500 Whole Food stores to unionize as well. Now, it's not the first time that Amazon has found itself in the crosshairs of organized labor. Some of its drivers and warehouse workers have already joined forces with the Teamsters Union, which represents over a million workers. Union still represent a small percentage of Amazon's workforce. It's about 1% overall. But between the teams, Teamsters Union and now the United Food and Commercial Workers Union, Amazon is starting to face

growing union pressure on multiple fronts. Definitely something to keep an eye on. I wonder if Amazon executives will make a comment about this on their earnings call next week. Let's talk about some stocks making moves today. Shares of Royal Caribbean are up this morning after the cruise operator raised its profit outlook due to strong travel demand. It looks like massive investments by the company to turn its boats into floating amusement parks are starting to pay off. The company also invested a lot into a private island called Cocoa K in the Bahamas, which has sparked a surge in ticket sales. And now all other cruise lines are starting to copy that playbook. Investors are loving it. Shares of Royal Caribbean are up more than 5% this morning at the time of this recording. People just can't

get enough of cruising right now. Now on the flip side, shares of JetBlue are crashing as investors react to expectations of increased costs and lower revenue per available seat mile. That's a key metric for the airline industry. The airlines say they anticipate operating fewer flights in the first quarter of 2025, projecting a decline of 2 to 5%. The airline is facing a ton of challenges and rising concerns about the company's near-term profitability and growth prospects, and it's hitting the stock hard. Shares of JetBlue are down more than 15% this morning at the time of this recording. I feel bad for JetBlue, man. They should have been allowed to merge with Spirit Airlines, and now both these airlines are getting cooked. Speaking of getting cooked, shares of GM are down

this morning, despite the automaker reporting solid earnings. The revenues and profits came higher than expected and they also delivered a rosy profit outlook for 2025. It looks like their decision to call it quits on their self-driving car unit cruise is a key reason for the positive guidance. Cruise itself was responsible for a $3 billion operating loss last year. But the move to wind down to that division is expected to save GM about a billion dollars a year. But the company is still struggling in China as they try to compete with domestic competition there. On top of that, there might be potential tariffs on Canada and Mexico, which could inflate their costs. And that's why shares of GM are down around 5% this morning in reaction to these earnings.

GM is the first automaker to report earnings. Tesla is reporting earnings tomorrow after the market close. If you want to call Tesla an automaker, Tesla earnings are always highly anticipated. I can't wait to see what they report. We're going to be recapping those numbers on Thursday's episode. So make sure you guys are tuning into the rundown this week. Let's wrap the show with a fun fact. Retail traders bought a record $562 million worth of Nvidia shares on Monday.

day during the sell-off. It's the largest amount on record going all the way back to 2014, according to Vanda Research. We put up a poll on Spotify yesterday, and 75% of you voted that the deep-seek sell-off in Nvidia was a chance to buy the dip. And it looks like some of you put your money where your mouth is. I'm really hoping that it works out. All right, guys, that's the rundown for today. Hope you guys enjoyed today's episode. I'm still processing everything that happened on Monday, and it's going to be interesting to see where the markets go from here. I'm really looking forward to the Fed meeting, and we've got some big earnings coming up, so we're going to have a lot to talk about throughout the week.

So if you're new here, it's a great time to get subscribed. And if you enjoyed today's episode, consider giving us a five-star rating on Apple or Spotify. Vote in today's Spotify poll. Leave us a comment on Spotify. All that engagement really helps 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.

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