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, January 29th. In today's episode, we'll recap the Fed meeting and why it was pretty boring. We'll also recap earnings from Tesla, Microsoft and Meta, then stick around to the end of the show to find out a shocking stat about Apple. We got a great show for you today. Let's go. Stocks had an up and down kind of day on Wednesday. The S P 500 actually briefly touched 7,000 for the first time ever during the session, but by the close it gave that back and finished flat for the day, down 0.01%. Now, the NASDAQ on the other hand, did squeeze out a 0.2% gain. The big event yesterday was of course, the Fed meeting and honestly, it was kind of boring. As expected, the Fed did not cut interest rates, keeping the Fed funds rate in the range of 3.5 to 3.75%. Now, a lot of people thought that Jerome Powell's press conference was going to be interesting, but no, it was pretty boring. I watched the whole thing and he mostly stuck to the script and didn't answer any spicy questions related to the DOJ criminal investigation or anything related to politics. Now, there were two Fed governors that dissented. They wanted to cut rates by 25 basis points. But the majority of the committee is clearly in no rush to lower rates, especially with the job market stabilizing now and inflation still above the Fed's 2% target. So honestly, I don't think the Fed will cut rates anytime soon unless the labor market starts showing signs of weakness again. Now, while the stock market barely reacted to the Fed's decision, gold and silver absolutely went wild. You know, gold has gone up more than 25 this year already and silver is up more than 60%. What did catch my attention during the Fed meeting was Jerome Powell getting asked directly about the rally in gold and silver. And he basically shrugged it off, saying that he's not taking much message from this rally in precious metals. You know, honestly, I was kind of surprised to hear that because it's hard to ignore the metals rally at this point. You know, whether investors are buying up metals because of an inflation hedge or dollar concerns or broader uncertainty, I feel like you got to pay attention to it. In fact, I think we're going to do a deep dive this weekend on the Medals rally. So make sure you guys are subscribed to the podcast and keep an eye on your podcast feed this weekend. For that. And consider hitting the notification bell on Spotify and YouTube if you want to be notified as soon as the episode goes up. Let's run through some headlines, starting with Tesla. Tesla reported Q4 earnings last night, and while they beat expectations, that's not what everyone is talking about this morning. The real headline is the pivot the company is doing that nobody saw coming. CEO Elon Musk announced that Tesla is canceling the production of the Model S and Model X and they're converting the production lines of those cars to produce Optimus humanoid robots. Now, Elon is calling this an honorable discharge for the two vehicles which have been around for over a decade and but the reality is they just weren't selling that much anymore. The Model S and Model X combined made up just 3% of Tesla's 1.6 million deliveries last year, while the Model 3 and Model Y account for 97%. And this move made it very clear that Tesla is pivoting away from the car business and trying to become a full on Robotics and AI Company. Now, going back to the earnings, 2025 marked the company's first year ever with declining revenue. Revenues fell 3% last year and deliveries have now dropped in three of four quarters. And Tesla's profits were down 61 in Q4 compared to a year ago. So now Elon is betting big on AI and robotics to turn things around. Tesla announced they're spending $20 billion on CapEx this year, which is more than double what they spent last year. The money will go towards retooling factories, building robots, expanding robo taxi operations, and ramping up AI infrastructure. Now, speaking of AI, Tesla also disclosed that they've invested $2 billion in Elon Musk's startup Xai as part of the company's recent funding round. Now what's interesting is that Tesla shareholders actually voted against this investment back in November, but Tesla went ahead and did it anyways. Now, investors seem to be cautiously optimistic about this pivot, at least for now. Tesla stock did jump around 2% after the earnings dropped, but it's now down around 1% at the time of this recording. You know, I wouldn't be surprised if in the future all of Elon's Companies like Tesla, SpaceX and Xai are all under one giant holding company. All right, now let's talk about Microsoft. They also reported earnings last night, and while they did have a good quarter, the stock is still taking a big hit. Today the company beat on top line and bottom line. Revenue was up more than 16% to $81.3 billion, and profits were up 60% to over $38 billion. But there was one metric that investors didn't like, and that was cloud growth, which is slowing. Microsoft's Azure revenue grew, which sounds great, but that was down from 40% last quarter, and Microsoft is forecasting growth of just 37% next quarter. Now, at the same time, while cloud growth is slowing, Microsoft continues to spend more money on AI. Company spent $37.5 billion in capex last quarter, which is up 66% from a year ago and well above what Wall street was expecting. Ramping up spending while cloud growth is slowing is freaking out investors. And Microsoft stock is down more than 10% this morning at the time of this recording. You know, investors are finally starting to ask, when will all this AI spending pay off for the company? And finally, let's talk about Meta. They also reported earnings last night, and the market had a complete opposite reaction compared to Microsoft. You know, Meta crushed earnings across the board. Revenue was up 24% to $59.9 billion, and profits were up 9% to $22.8 billion. Four, both beating estimates. But the real story here is the guidance. Meta says that Q1 revenue will be between 53.5 and $56.5 billion. Wall street was expecting revenue to be around $51 billion, so that's a massive beat. Now, the reason that Metta is so optimistic is because of AI. See, Metta makes 97% of their revenue from advertising. And because of the company's big investment in AI over the last couple of years, they're able to do better ad targeting, better content recommendation, which is keeping people on Facebook, Instagram, and WhatsApp longer. And all of that is translating to more ad revenue. And the company has no plans of slowing down their AI spend. They plan to spend around 115 and $135 billion in capex this year. That's nearly double what they spent in 2025, and about 20% higher than what Wall street was expecting. But the market seems to be okay with this. Meta stock is up around 7% at the time of this recording. I think it's because Meta showed that their investment in AI is actually and leading to more ad revenue. Microsoft didn't, and their stock is taking a big hit. Let's talk about some stocks making moves today. Southwest Airline stock is soaring this morning after the airline dropped a Profit forecast for 2026. Absolutely crushing expectations. Southwest expects to earn $4 per share this year, which is way above the $3.19 per share that analysts were expecting. And it's more than quadruple what they earned last year. You know, this is all because of Southwest's big transformation. The airline spent the last couple of years completely overhauling its business model. The end of their famous open seat policy. They now charge for assigned seats, including premium seats. They also started charging for checked bags. And while Flyers might not love those changes, all of that has led to the company making more money. And Southwest stock is up more than 5% this morning at the time of this recording. Now, on the flip side, Las Vegas Sands is getting hammered after disappointing results out of its key Macau business. What's funny is that despite its name, Las Vegas Sands doesn't own any properties in Vegas anymore. They sold the Venetian and Palazzo in 2022. A majority of their revenue comes from Asia, especially Maau and Singapore. Now, Macau is actually a bigger gambling market than Vegas, but the company saw earnings fall short of expectations there because of rising costs. And as a result, Las Vegas sand stock is down around 7% this morning at the time of this recording. Let's wrap the show with a fun fact. Apple stock has dropped for eight consecutive weeks, which is the longest weekly losing streak for the company since 1993, which was like the era of what, floppy disk and dial up Internet. In fact, I'm not even sure if they had dial up back then. A big concern that investors have right now is the rising price of memory and the impact that could have on Apple's profits. The price of computer memory has exploded since the summer because AI data centers are scooping up supply. And the reason this matters for Apple is, is because memory makes up 10 to 20% of the cost of building devices like iPhones and iPads. So either Apple will have to take a hit to their margins or they're going to have to raise prices, which could hurt sales. We should get more clarity tonight. Apple is reporting earnings after the market close. We'll break down those results on tomorrow's episode, so make sure you guys tune in for that. 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.