← The Rundown
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Public.com presents the rundown, your daily market update in under 10 minutes. My name is Zaydad Mani and Today is Tuesday, April 7th. In today's episode, we'll tell you why health insurance stocks are surging this morning. Also, break down the latest deal between Broadcom and Google, then stick around to the end of the show for an Update on the Artemis 2 mission and what it means for space stocks. We got a great show for you today. Let's go. Stocks kept the rally going on Monday with the S&P 500 jumping 0.4% while the NASDAQ gained half a percent. Stocks have now gone up for four days in a row, which is the best winning streak we've had since May of last year. So it's been a while. Part of the optimism was because of the jobs report that came out on Friday that showed there was 178,000 jobs added to the US economy in March. The that was way better than expected. We covered that report in more detail on yesterday's show. So go check that out if you missed it now. The real story hanging over the market continues to be the Iran war. President Trump gave Iran a deadline of 8pm tonight to agree to a deal to reopen the Strait of Hormuz or else Trump has threatened to attack Iranian infrastructure including bridges and power plants. The stock market is choosing to be optimistic. Investors seem to be betting that some kind of delay or extension or last minute de escalation is still on the table before tonight's deadline. If investors really thought that a major escalation was going to happen tonight, I doubt that stocks would be acting so chill right now. Oil traders are a lot more nervous. Oil prices continue to tick higher, trading over a hundred and twelve dollars a barrel. Now speaking of elevated oil prices and the impact of that, we're getting the March CPI report on Friday morning. That will tell us what kind of impact the jump in oil prices are having on inflation. Economists are expecting the biggest jump in inflation since 2022. So we'll break down those numbers on Friday morning. Overall, I expect another volatile week in front of us. So make sure you guys are subscribed to the podcast and tuning in every day. To stay in the loop, let's run through some headline starting with health insurance companies. Health insurance stocks are surging today because of rules pertaining to Medicare. See Medicare is the US government's health care program for people over 65. Now what used to happen with Medic is that the federal government would pay doctors directly for care of the patients. But over the last decade plus, more and more seniors are getting their Medicare through private insurance companies like UnitedHealth Group, Aetna, Humana and others. The federal government then just pays these health insurance companies directly a fixed amount per patient to manage everything. This program is called Medicare Advantage, and it has about 35 million people enrolled. And it had been a massive growth engine for these health insurance companies over the last decade or so. Now, what happens here is that every year the federal government decides how much money it's going to pay these insurance companies per patient for the following year. And that number matters a lot to Wall street because it determines how much additional revenue these health insurance companies are going to make. Well, on Monday night, the government released its final rates for 2027, and it was way better than expected. Instead of the flat rate increase which was previously reported, insurance companies will now get a 2.48% increase, which works out to about $13 billion in additional payments. And that's why shares of UnitedHealth, Humana, CVS, Aetna and others are up 7 to 10% today. Now, to be clear, the 2.48% isn't a huge increase because medical costs have gone up 7 to 9% over the last year. So insurance companies are still getting squeezed, but compared to the near 0% increase they were staring at back in January, it's a big sigh of relief. And that's why these stocks are surging. This morning. Let's shift gears and talk about Broadcom, because the chip maker announced a couple major deals that has investors pretty excited. First up, Broadcom signed a long term agreement with Google to develop and supply future generations of Google's custom AI chips called TPUs through 2031. TPUs are Google's in house answer to Nvidia's GPUs. They're the chips that power Google's own AI models and also their cloud business. Google has been developing these chips in a partnership with Broadcom. And now Broadcom is locked in to continue developing these chips for the next five years. And Google isn't the only company planning to use these TPUs. Anthropic just announced a deal to buy 3.5 gigawatts worth of capacity of Google's TPUs from Broadcom. So not only is Broadcom helping develop Google's new chips, but they're also helping distribute them. You know, of course Nvidia GPUs are the leader in this space, but it can be hard to get your hands on Nvidia GPUs. And right now Anthropic needs as much capacity as they can get. You know, Anthropic has recently seen a huge surge in users and usage of Claude that they're constantly running into compute constraints. You know, I've become a heavy Claude user over the last couple months and I'm constantly running into usage limits. Now going back to Broadcom, they've been one of the big winners of the AI boom over the last few years. Broadcom generated nearly $64 billion in revenue last year and they're expected their AI chip sales alone to exceed $100 billion in revenue by 2027 as the stock did have a rough start to the year, down around 10%, but shares are up around 3% this morning. In reaction to the Google News, let's talk about some stocks making moves today. Universal Music Group shares are up after hedge fund manager Bill Ackman made a buyout offer north of $60 billion for the company. Universal Music Group is the world's largest record label, home to Taylor Swift, Bad Bunny, Kendrick Lamar, Billie Eilish and a lot more. In fact, they control More than 30% of the global recorded music business. Well, Bill Ackman's hedge fund Pershing Square actually owns 4 1/2% of the company and he thinks the company is undervalued. Shares of the company have dropped around 20% in the past six months and Ackman says that the music business itself is fine. The problem in his view is that Universal is listed in Amsterdam. His plan is to buy the company and merge Universal with a new entity and move the listing to the New York Stock Exchange. Now this acquisition is far from a sure thing. It actually needs a two thirds version vote from shareholders to pass. But markets like the attention the company is getting right now and shares are up around 10 this morning at the time of this recording. Now on the flip side, let's talk about another Dutch company, asml. Their shares are trading lower after new legislation from the U S Congress proposed blocking foreign chip manufacturing equipment makers from selling equipment to China. ASML is a critical part of the semiconductor supply chain. They make the super complex lithography machines needed to manufacture chips. And the thing is, ASML has already been banned from selling its most cutting edge EUV machines to China. But they've still been allowed to sell some of their older duv machines which are used to make less advanced chips like memory. Well now this new bill in the US Congress called the Match act would ban all of ASML's DUV lithography machines from being sold to China. It would also stop ASML and other foreign companies from sending engineers to service equipment and at restricted Chinese facilities, something that US Companies have already been prohibited from doing. So this could end up being a big hit to ASML's business. Now, ASML's China sales have declined in recent years already. They're expected to drop to around 20% of their total sales this year, down from 33% in 2025. And if these new restrictions pass, I mean, the numbers could fall even further. Now, to be fair, the bill is still at its early stages and has a long way to go through Congress, but the market doesn't like the uncertainty. Shares of ASML are down around 2% this morning at the time of this recording. I imagine ASML could continue to drop if this bill gets more traction. Let's wrap the show with a fun fact. The four astronauts on NASA's Artemis 2 mission just went further from Earth than any human ever. Yesterday, the Orion spacecraft carrying the astronauts was over 253,000 miles away from Earth, breaking the record held by Apollo 13 back in 1970. The Orion spacecraft flew around the moon yesterday, where the crew was then cut off from communication on earth for around 40 minutes. Now I was watching the livestream when it was happening. Very intense, really cool stuff. And some of the pictures that the astronauts took from the far side of the moon are now going viral. The spacecraft is now headed back towards Earth and should be landing in the Pacific Ocean sometime on April 10th. So yeah, space is hot right now. And funny enough, this mission has actually been a boost for space stocks as well. Shares of companies like AST, Space Mobile, Intuitive Machines and Firefly are all up double digits since the Artemis 2 mission launched on April 1st. And then don't forget the SpaceX IPO is also right around the corner. With everything happening right now, we might have to launch like a dedicated space show here in Houston to cover everything. Well all right guys, that's the rundown for today. Hope you guys enjoyed today's episode. If you did and you have like five extra seconds, consider giving us a five star rating on Apple, Spotify, YouTube, wherever you listen to your podcast. If you are listening on Spotify, don't forget to 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, watching and commenting. Shout out to Mike and Connor for all the work behind the scenes and we'll see you guys back here tomorrow.