The Rundown - OpenAI's Secret Plan for a New Device, Nike Agrees to Sell Shoes on Amazon

Episode Date: May 22, 2025

Stock market update for May 22, 2025. This video is for informational purposes only and reflects the views of the host and guest, not Public Holdings or its subsidiaries. Mentions of assets are not recommendations. Investing involves risk, including loss. Past performance does not guarantee future results. For full disclosures, visit Public.com/disclosures.

Public.com presents the rundown. Your daily market update in under 10 minutes. My name is Zadadmani, and today is Thursday, May 22nd. In today's episode, we'll tell you why the bond market continues to freak out investors and why the new budget bill in Congress isn't helping. We also tell you about OpenAI's plans to take on Apple. They just paid $6.5 billion to bring on one of Apple's legendary product designers. Then stick around to the end of the show to learn about BYD's push into Europe and why it's a real threat to Tesla.

We got a great show for you today. Let's go. Well, guys, the stock market had its worst day yesterday in over a month, with the S&P 500 dropping 1.6% and the NASDAQ losing 1.4%. And I think we can blame the bond market for this one. We talked a bit about this on yesterday's show. The bond market is where all the drama is right now. Treasury yields continue to climb with the 10-year yield now above 4.6% and the 30-year breaking above 5.1%. And look, we haven't seen levels like that in nearly two decades.

And again, the reason this matters is that rising yields means the U.S. government has to pay more interest to borrow money. And if you take a look at the U.S. government's debt load already, it's not great. The government already has $36 trillion in debt. And to make matters worse, this new budget bill working its way through Congress is expected to add even more to that deficit, which is a stark contrast from all the cuts and savings promised by Doge earlier this year. This big, beautiful tax bill like Trump calls it, cleared the House of Representatives this morning, and it's now headed to the Senate. But let's just say the bond market is sending a signal that they aren't a big fan of this bill. So I'm going to continue

keeping an eye on the bond market because right now, it's flashing warning signs, and that's bringing the stock market down as well. I got to say, between the bond market and the New York Knicks collapsed last night. Investors in New York have a lot to be stretched out about right now. I had to get a Nix joke in there. You know, while the bond market has been melting down, Bitcoin on the other hand seems to be doing the exact opposite. Bitcoin hit all-time highs on Wednesday, topping $110,000. In fact, it's currently trading over $11,000 this morning. Honestly, I'm kind of surprised by the lack of hype around this one. It's been relatively quiet compared to previous times that Bitcoin has hit a record high or major milestone. And I honestly think that's a good thing.

It's like another sign that Bitcoin is now a somewhat mature financial asset. And it's actually starting to act as a hedge to the overall market. So shout out to everyone that bought the Bitcoin dip last month. Bitcoin dropped below $75,000 at one point in April. And it's up almost 50% since. Let's run through some headlines. Starting with Open AI. Open AI made a big splash yesterday by announcing a $6.5 billion acquisition

of an AI device startup called I.O., which was founded by Johnny Ive. Johnny Ive is a Silicon Valley legend. He's like the LeBron James of product design. He worked at Apple for decades really close with Steve Jobs and helped design iconic consumer products like the iPod, iPhone, and MacBook. Johnny Ibe was the dude with a British accent in Apple's marketing videos back in the day. He somehow made a slab of metal sound like a religious experience, talking about aluminum and harmony.

And now he's teaming up with Sam Altman and OpenAI to build what they're calling the next generation of AI devices. Now, this is a secretive project. No one really knows what it's going to be. They dropped some hints of what it might be in a video yesterday. According to the Wall Street Journal, it's not going to be a phone or smart glasses, which is what I was kind of hoping for.

There are rumors that it might be an AI companion device that's context-aware and it sits on your desk or in your pocket and it becomes like another core product that you carry around with your phone. Not really sure how I feel about that. But the tech community, man, they are super hyped about this. And some are saying that this is a huge L for Apple,

which is still trying to figure out how to make Siri functional. But personally, I'm a little skeptical about this whole thing. First of all, Open AI paying $6.5 billion for a secretive startup that has zero products. I mean, that's a lot of money to bet on Johnny Ive, who hasn't shipped a major product since leaving Apple, back in 2019. I like this analogy. Someone on Twitter said that it was like paying $6.5 billion for

2025 LeBron. Like sure, he might be the goat, but how much does he have left in his bag? So that's what we'll have to see with Johnny I. Does he still have some innovative products left in his bag? Maybe he cooks up something truly revolutionary, but I'm trying to temper my expectations here. But let me know what you guys think in the comments. Maybe I'm being too skeptical here. We are going to have to wait a little bit for this product though. The Wall Street Journal says the first product is expected to drop by late next year. It would be funny, though, if this is what finally lights a fire under Apple and gets them to actually get serious about AI and start innovating again. I'm sure Tim Cook and the Apple executives don't want to lose to Johnny Ive.

Now, speaking of LeBron, let's talk about his longtime sponsor Nike. For the first time since 2019, Nike will start selling their products on Amazon. See, six years ago, Nike pulled all their products from Amazon to build their own direct-to-consumer business because they didn't want to have to deal with a middleman like Amazon. They also cut ties with a lot of retailers like Foot Locker and Dick's sporting goods. But let's just say that Direct to Consumer Strategy didn't work out for Nike. Nike sales have struggled to compete with newer brands like OnCloud and Hokas. So then Nike fired their old CEO last year who was pushing this Direct to Consumer Strategy pretty hard. And they put an Elliott Hill in charge to right the ship.

And since taken over, Elliott Hill has been making peace with retailers, including Foot Locker, Dick Sporting Goods, and now Amazon. So it's a full 180 from their previous strategy. Nike is trying to get their shoes back in front of as many shoppers as possible. Now, I think Nike came to the realization that consumers don't really care too much about brand experience when it comes to buying shoes. It's not like you're buying like a luxury handbag here. People just want a good shoe at a solid price with fast shipping. And obviously, Amazon has that.

Now, Nike has previously complained about Amazon not doing enough about counterfeits and shady third-party sellers. But I think Amazon has made some progress in that over the last couple of years. So I say this is a win-win for everybody. Nike's back on Amazon, which is hopefully going to result in more sales, and Amazon now has a premium brand selling on their platform again. And this might result in even more premium brands coming back onto the platform. Let's talk about some stocks making moves today. Advanced auto parts stock is skyrocketing this morning after the company beat earnings and said that it would meet its profit projections for the year. This was kind of a shock to the market

because advanced auto parts gets much of its products from Mexico, China, and other places that are heavily involved in the global trade war. But the company said they went back and did the calculations on the cost of tariffs, and they still think they're going to meet their profit projections for the year. In fact, the tariffs might actually end up helping advance auto parts since tariffs have pushed up the price of cars, so people are holding onto their old cars for longer, which means more oil changes, more brake pads, more windshield wipers, basically more business for advanced auto parts, and that's why shares of the company are up more than 33% this morning on this news. Now, on the flip side, the same can't be said about solar stocks. They are getting

cooked after the new spending bill that was passed by the House of Representatives would cut funding for a bunch of clean energy subsidies, including the 30% federal tax credit homeowners got for installing solar panels on their roof. With that incentive going away, solar stocks look a lot less sunny, no pun intended, and investors have been dumping shares across the board. Solar companies like First Solar, M-Phase Energy are down more than 20% and Sun Run is down more than 30% just to name a few. Let's wrap the show with a fun fact. For the first time ever, BYD outsold Tesla in Europe. In the month of April, BYD registered 7,231 cars in Europe, while Tesla came in at 7, and 65. That's a difference of about 65 cars, less than 1%. So it's not a huge gap, but it's pretty

symbolic, though. It's yet another sign that Tesla continues to struggle when dealing with competition out of China. The company's already dealing with its first annual decline in deliveries, and they were hoping that their revamp Model Y would help with sales, but that doesn't seem to be doing the job so far. It also doesn't help that BYD's cars are cheaper. BYD launched a compact EV in Europe called the Dolphin Surf, and its starting price is $28,000. So I think if Tesla wants to regain the lead, they're going to have to stop teasing this low-cost model they've been talking about for years and actually release it. Otherwise, BYD just might end up dominating the rest of the world.

Well, all right, guys, that's the rundown for today. Hope you guys enjoyed today's episode. We got one more episode for you to wrap up this week, and then we're heading into the long weekend. Remember, Monday is Memorial Day. the stock market will be closed, so no show for us. But we will be back on Tuesday, and next week we're going to get earnings from Nvidia. So that should be a good one.

Thank you guys again for listening. Shout out to Mike and Connor for all the help behind the scenes. And we'll see you guys back here tomorrow.