← 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 Thursday, March 12th. In today's episode, we'll give you the latest on oil prices and why they might continue to climb. We'll also tell you why Eli Lilly is sounding the alarm on copycat weight loss drugs and the growing panic on Wall street regarding private credit. Then stick around to the end of the show to find out how much Ben Affleck just sold his AI startup. We got a great show for you today. Let's go. Wednesday was a relatively quiet day for the stock market, at least on the surface. The S and P closed down less than 0.1% while the Nasdaq was up less than 0.1%. So a relatively flat day for the stock market. The Dow is having a rough stretch right now, though. It closed at its lowest level of the year, but nobody cares about the Dow. So once again, the energy sector was the best performing yesterday. And that's because oil prices are climbing again. US crude is now trading above $90 a barrel and international crude briefly touched $100 this morning. Iran has ramped up attacks on vessels in the Persian Gulf. Multiple ships have been struck in the last few days. So the traffic to the Strait of Hormuz is still effectively close. And unfortunately, there seems to be zero signs of a de escalation. Now, as I mentioned yesterday, the iea, which is the International Energy Agency the just announced the largest emergency oil release in history. The 32 member countries are releasing a total of 400 million barrels from their strategic reserves. Now, for some context, this is more than double the amount released during the Ukraine war in 2022. So this is an unprecedented move. But despite that, the markets didn't seem to care. The thing is, these reserves simply won't be enough to close the supply gap from the Strait of Hormuz. Analysts estimate the closure of that shipping lane from removes about 20 million barrels of oil from global supply, while on the flip side, about 5 million barrels of day are expected to be released from the strategic reserve. So there's a supply gap there and that's why oil prices are still moving higher. The big picture for the market is pretty simple right now. As long as the situation in the Middle east remains unstable and that oil tankers can't pass through the Strait of Hormuz, I think the markets are going to be on edge and volatile. You know, I feel like I'm repeating myself every day at this point, but that's just the reality of the situation right now, it's it all comes down to oil. I am a little surprised that gold hasn't rallied much since the start of the war. It's pretty much flat. But maybe that has to do with the fact that the US Dollar has been rallying recently and also the market is pricing in less rate cuts this year. So yeah, we're staying on top of the major developments. Make sure you guys are subscribed to the podcast and tuning in every day to stay in the loop. Let's run through some headlines, starting with Eli Lilly. Eli Lilly is warning about the potential health risk tied to compounded versions of its BlockB weight loss drug Zeppelin. Eli Lilly put out an open letter today saying that some third party pharmacies have been mixing vitamin B12 with trizepatide, which is the active ingredient in Zeppelin. The company says that combination may be dangerous. Eli Lilly says that significant impurities were found in each of the 10 samples that they tested, all of which they obtained from compounded pharmacies, med spas and telehealth platforms. Eli Lilly has notified the FDA about this and they're warning anyone that received a trezepatide B12 product from these third party sources of possible toxicity and immune reactions. You know, all this is part of a much bigger battle happening in the weight loss drug market right now. These compound pharmacies and telehealth platforms were initially allowed to sell copycat versions of drugs like Zepbound and Wegovy during a supply shortage a few years ago. Today there is no more supply shortage. But these compound pharmacies and telehealth platforms have continued to sell these weight loss drugs through another loophole that allows them to customize the drugs by making small tweaks to the formula. Eli Lilly is aggressively fighting back, though. They've already sued some of these compound pharmacies and Wealth Wellness Centers for selling products with Tirzepatite. The FDA is also getting involved. They sent warning letters to 30 telehealth companies back in September for misleading claims. So this space is evolving fast, not just on the innovation side, but on the regulatory and legal side too. Now Eli Lilly is trying to protect their market share and for companies like hims, they're trying to figure out how to stay in the game. We're actually doing a deep dive on hims this weekend because the trajectory of their business took a huge turn this week. So if you guys want to learn more, make sure you guys check out that episode. Let's shift gears and talk about private credit Now, a few weeks ago I talked about how there was trouble brewing in the private credit space and I wanted to give an update on the situation. This all started with a firm called Blue Owl limiting redemptions for a private credit fund back in mid February. Well, since then, several large funds have recently limited withdrawals after a wave of redemption requests from investors. Now I'm talking blackrock, Blackstone and even Morgan Stanley have all capped withdrawals. So right now you have a situation where some of the biggest names games in finance are basically telling private credit investors that they can't have all their money back. Right now that is not a good look. Now, just a quick refresher on private credit. It's basically when investment funds lend money directly to companies instead of those companies going to a bank. And investors loved it because the returns were great, especially compared to the low interest rate environment that we had over the last five years. So these funds pitch themselves as a safe, steady income machine. Wall street poured money into it, retail investors poured money into it, and everyone was happy until now. See, the concern now is that a lot of these private credit funds made risky loans, particularly to software companies. And now those loans are starting to look shakier as AI disrupts the tech sector. And I've seen some people call private credit the next subprime mortgage disaster that brought down the economy in 2008 and triggered the great financial crisis. For now though, most analysts aren't expecting this to trigger a full blown financial crisis. But this is a story worth watching closely because a lot of everyday investors got sold on private credit as a safe, boring, high yield investment. Turns out it wasn't so safe or boring after all. The stock of many of these big private credit firms like Blue Owl, Ares and Blackstone are down more than 20 to 30% in the last month alone. It's a very interesting development. I'm waiting for things to play out, but we're going to have to do a deep dive on the private credit situation pretty soon. Let's talk about some stocks making moves today. Shares of Bumble are surging this morning after the dating app company beat earnings and dropped a pretty interesting product announcement. Bumble says they're building an AI powered matchmaker service called Dates. Basically it's going to be a personal AI assistant that has an in depth conversation with you about your values, your relationship goals, your communication styles, all of that stuff. And then the AI is going to go out and find potential matches based on that information. So yeah, that's a pretty interesting development. Instead of endlessly Swiping through profiles, the AI will basically go out and find the match for you. And that's important because the entire dating app industry has been struggling lately. In fact, Bumble's revenues actually declined last year and growth has slowed across the sector as users are experiencing dating app fatigue. So we could be entering a new phase right now where AI becomes the matchmaker. Investors clearly like the direction this is going. Shares of Bumble are up more than than 20% this morning at the time of this recording. Now on the flip side, shares of Dollar General are falling after the retailer issued a weaker than expected outlook for the year. The company says they expect same store sales to grow between 2.2% and 2.7% this year. To put that in perspective, last quarter the company posted a 4.3% same store sales growth. So the guidance moving forward implies a meaningful slowdown. Dollar General has been a big winner over the last 12 months. The stock has surged nearly 80% as more and more consumers, including high income shop shoppers, start looking for cheaper options. But after a big rally in the stock, price expectations were high and Dollar General was unable to meet those expectations. And as a result, shares are down around 6% this morning at the time of this recording. Let's wrap the show with the fun fact. Netflix is buying Ben Affleck's AI company for $600 million. I guess apparently Ben Affleck started an AI movie making company a couple years ago called Inter Positive and now he's selling it to Netflix for more than half a billion. Dol get one of Netflix's biggest acquisitions ever. You know, I find this pretty interesting because a lot of people working in Hollywood are worried that movie studios are going to use AI in the future to replace a ton of jobs, including even actors. But Ben Affleck says that that's not the goal with his AI company. He says that technology is meant to help filmmakers speed up production and cut costs. This company's AI tool helps filmmakers edit and manipulate existing footage. Things like removing unwanted objects and scenes and changing backgrounds or adjusting shots after filming is already done. Feel like I can already do a lot of stuff on Cap Cut right now and look for Netflix. This acquisition makes a ton of sense. They're trying to reduce their cost to make content and AI is going to play a big role in that. You know, I'm still in the camp that we're still going to need humans to handle the creative aspect of content. You know, AI is great for editing, but it's still not the best when it comes to creative writing. But then again, with the way that AI is improving these days, maybe in a few years an AI agent is going to win an Oscar for Best writer. 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.