Loading summary
Transcript1 lines
- [00:00]
A
Public.com presents the rundown, your daily market update in under 10 minutes. My name is Zaydad Mani and today is Thursday, February 12th. And today's episode we'll recap earnings from McDonald's and tell you why the company just had its best growth in two years. We'll also dive into why Kraft Heinz is pausing their split, then stick around to the end of the show to find out what percentage of the workday the average American is sitting. We got a great show for you today. Hey, let's go. Well, stocks didn't really do much on Wednesday after getting an early boost in the morning from the strong jobs report. The markets fizzled out with the S and P closing flat while The NASDAQ dropped 0.2%. We broke down the hot job report numbers on yesterday's episode, so go check that out if you missed it. You know, with the latest jobs report coming in strong, it probably means the Federal Reserve will wait to cut interest rates. Traders are now betting the next rate cut won't happen until June or July. Now keep in mind, Jerome Powell's term as Fed chair ends in May, so it probably means that we won't be getting any more rate cuts in the Jerome Powell era. The next Fed meeting is about a month away, so there's a lot that could happen between now and then that could change the narrative. Now going back to the stock market, it seems like the panic around AI disruption is still the main story. Financial stocks got hammered again yesterday. Real estate stocks also took a beating. And software stocks were back to selling off. You know, I've said this before, but like six months ago, anytime there was a new AI breakthrough or announcement, it was it would cause stocks to rally. But now the exact opposite is happening. Now, looking beyond stocks, gold is quietly making a comeback. The price is back near 50 $100 an ounce. Silver is back in the $80 range. And Bitcoin, it's still trading under $70,000 despite Michael Saylor buying more each week. Now remember, the January CPI inflation report drops tomorrow morning. That could be a big market moving event depending on where it comes in. If inflation comes in high, then I think the odds of a rate cut drop even further. We'll break all that down on tomorrow's episode. So 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 McDonald's. McDonald's reported earnings last night and the numbers came in pretty strong. Both revenues and earnings beat estimates with global Same store sales jumping 5.7%. The big bright spot was the US business. Same store sales in the US surged 6.8% year over year, which is the fastest growth rate in more than two years. Traffic was up and people are spending more per visit. It turns out McDonald's focus on value and lowering prices is working to bring back customers. Now. McDonald's had been taking a lot of heat recently for rising prices and $18 Big Mac meals going viral. Well, over the last few months, McDonald's brought back the five dollar meal deal and leaned harder into promos. Turns out people like cheaper prices and that brought back the customers. Q4 sales also got a boost from holiday themed promos like the Grinch meal which was a massive success. McDonald's had their highest sales day ever because of it. So yeah, McDonald's is making a comeback because of cheaper prices. Who would have thought? Now one thing to watch moving forward. The company did say that Q1 growth is probably going to slow down because of winter storms in late January that kept people at home and forced some temporary closures. And I think that could be one reason why the stock hasn't moved much. In reaction to these great earnings, the company still plans to expand aggressively. They're Planning to open 2600 new locations this year and they're also doubling down on beverages like more energy drinks, refreshers and specialty sodas. Those items tend to be higher margin and they have the potential to go viral as well. I wonder if other fast food places and restaurants will see McDonald's turnaround and success and also start lowering prices themselves. Chipotle, if you're listening, think about it. Let's stick with the food theme here and talk about Kraft Heinz. Now back in September, just a few months ago, this food giant announced plans to split up the company. The idea was to separate the faster growing brands like Heinz Ketchup and Kraft Mac and Cheese from the slower legacy brands. Well, the company is now changing their mind and putting a pause on the split. The new CEO Steve K. Lane, who literally joined the company in January to execute the split, now says that he can fix the existing company's problems without splitting it. The plan now is instead of breaking up the company, Kraft Heinz is going to invest $600 million into marketing, product development and pricing strategies to try to get growth back on track. Looking at the numbers, Kraft Heinz has been struggling for years. Sales have fallen for nine straight quarters in Q4. Revenues dropp dropped 3.4% and the company has been losing market share to up and coming brands that are more nimble and better at meeting consumer needs. Now the new CEO says the company needs to earn back customer trust by actually offering better value and cutting prices. This kind of sounds like what McDonald's just went through. I think the big picture here is that some of these companies went too far on raising prices following the pandemic. They raised prices and they underinvested and that finally caught up to them. Consumers just stopped buying their stuff. So we'll see if this new strategy and focusing on value leads to the same turnaround and success that McDonald's is having. You know, Kraft Heinz stock has dropped like 12 in the last 12 months and it's down over 70 from its peak back in 2017. Now I do feel like 2017 was like the peak of Mac and cheese. Let's talk about some stocks making moves today. Viking Therapeutics is surging this morning after announcing that they will take its obesity drug into late stage trials and later this year. See, last year, Viking ran a mid stage study and the results were mixed. Their pill helped patients lose 12.2% of their body weight, which is solid, but Wall street was hoping for a 15% loss. So when that didn't happen, Viking stock dropped 40%. You know, it was classic biotech volatility. But Viking says that study supports its belief that a low dose oral version can still be an effective long term weight loss solution. So they're moving forward with late stage trials and they plan to announce the results of that study in the third quarter. You the stakes are high here for Viking because The race for GLP1 pills is heating up fast. Novo Nordisk was the first company to get approval for a weight loss pill. Their Wegovy pill was already on the market and showing early signs of success. In fact, 36% of early users of the Wegovy pill had never taken a GLP1 injection before. And that kind of shows you why these weight loss pills could be huge because they expand the market for people willing to take GLP1s. Eli Lilly is expected to get their pill approved by April. So yeah, Viking Therapeutics has a lot at stake here and investors are jumping in with shares up more than 10% this morning at the time of this recording. Now, on the flip side, Cisco stock is dropping despite the company beating earnings. Cisco makes network equipments like switches, routers and things to connect data centers. And revenues rose 10% in Q4 and net income jumped 31%. But the stock is down around 9% this morning at the time of this recording because Q1 guidance was underwhelming and also Cisco's margins took a dip as well. The company has seen a recent surge thanks to the demand from AI data centers, and they did generate $2.1 billion in AI infrastructure orders from hyperscalers, which shows that they're getting a piece of the AI buildout. Cisco also said that revenues from neo cloud providers, you know, the AI focused cloud companies, should accelerate in the back half of the year. But I guess the market was expecting a faster AI ramp up and as a result, Cisco stock is down this morning. Let's wrap the show with a fun fact. Americans are spending more time seated at work than at any point in nearly a decade. In 2025, Americans spent 45% of the workday sitting up from 39% back in 2016. This is according to new data from the Bureau of Labor Statistics, and not a surprise here, but the more you sit at work, the more money you probably make. White collar jobs like software developers, investment analysts, accountants, they're all sitting more 95% of the time at work and they earn six figures a year. Meanwhile, you have fast food workers, waiters, construction workers. They're on their feet 90% of the time and they earn way less. Now, there are exceptions, of course, like pharmacists, they earn around $137,000 a year while only sitting 28% of the time. Nurses are another example, but overall the trend is pretty clear. Desk jobs pay more, at least for now. I do wonder if this is still going to be the case in like 10, maybe 20 years. Everyone's talking about how AI is going to replace jobs and obvious white collar jobs are going to get replaced before blue collar jobs. You know, AI can write software and do financial analysis. They're probably not replacing construction workers and nurses anytime soon. 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. And 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.