← The Rundown
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Public.com presents the rundown, your daily market update in 10 minutes. My name is Zaydad Mani and Today is Wednesday, May 13th. In today's episode, we'll break down the shocking wholesale inflation report that is making bond investors nervous. We'll also preview President Trump's trip to China and what to expect from his meeting with President Xi. Then stick around to the end of the show to find out how you'll soon be able to trade GPUs like barrels of oil. We got a great show for you today. Today, let's go. Stocks took a step back on Tuesday. The S&P 500 fell 2% and the Nasdaq dropped 7%. The Dow did finish in the green, but you know, nobody cares about the Dow. So the big story yesterday was chip stocks finally cooling off. The SOX semiconductor index dropped 3%. Some of the notable losers yesterday include intel which fell 7% and and Qualcomm which dropped almost 12%. Now I wouldn't panic just yet. This is probably traders just taking profit. You know, chip stocks have been on a generational run recently. The sox index is up 66% since the start of April. And if you zoom out, the index has gone up 173% over the last year which is the best 12 month run since June of 2000. Now June of 2000 was right around the peak of the dot com bubble as well. Just saying. Now outside of chip stocks, the other big market story is inflation. Yesterday the CPI report came in hot, jumping 3.8% year over year which is the highest reading since May of 2023. And then today we just got another piece of inflation data, the PPI report which measures wholesale inflation and that came in hot as well. Wholesale inflation was up 6% in April on an annual basis which is much higher than expected and the highest reading since December of 2022. Scary part is that it's not just energy prices going up. Core PPI inflation, which strips out food and energy was up 5.2% year over year. So it seems like higher energy costs from the Iran war are now bleeding into everything else in the supply chain and that could mean higher prices down the road for consumers. So I think the market is starting to take the inflation story seriously. Now the 10 year treasury yield is approaching 4.5% which is the highest level since last July. So it's a sign that bond traders think the Fed could be forced to raise interest rates soon. If inflation, inflation continues to stay elevated, we'll see what happens. I don't think this Inflation story is over. We're going to stay on top of it for you guys, along with everything else happening in the market. So make sure you guys are locked into the podcast and tuning in every day to stay in the loop. Let's run through some headlines, starting with President Trump's trip to China. President Trump just landed in Beijing for a 36 hour summit with Chinese President Xi Jinping. This is the first visit by a US President to China in nearly a decade and he's bringing a big time entourage with him. We're talking Elon Musk, Tim Cook, the CEOs of Goldman Sachs, Blackrock, Boeing, Qualcomm, Micron, and of course Nvidia CEO Jensen Wong. Now an interesting note about Jensen. He initially wasn't part of the traveling party, which is weird for a guy running the most important company in the world right now and trying to get back into the Chinese market. But he was given a last minute invite by Trump on Tuesday. So Jensen flew to Alaska on short notice to hop on Air Force One during a refueling stop. Now, I imagine AI is going to be one of the many topics discussed between the two leaders. Now, obviously Nvidia wants access to the Chinese market. You know, Chinese tech companies are doing some of the best work in AI right now. And Jensen has called China a $50 billion opportunity for the company. Chinese government has blocked the import of some of Nvidia's chips because they want to build up their own domestic chip industry. So we'll see if anything gets announced regarding AI chips from this meeting. Now some of the other topics that are going to be discussed at the summit are tariffs, access to rare earth element, and of course the Iran situation. Now I think the resolution to the Iran situation could have the most immediate impact on the markets. You know, China is the biggest buyer of Iranian oil and since the US has put a blockade on Iranian ships, it's putting economic pressure on China. So maybe China can nudge Iran towards a deal leading to the reopening of the Strait of Hormuz and hopefully bringing down oil prices. So we'll see what ends up happening over the next 36 hours. Now, most analysts aren't expecting a major market moving breakthrough from this trip. We'll probably get like symbolic gestures, maybe some purchase commitments from China for U. S Soybeans and Boeing planes. We'll recap anything noteworthy about this meeting later in the week. Let's shift gears and talk about Amazon because the company just made a big move in their AI shopping strategy. Amazon is shutting down its Rufus AI Chatbot and replacing it with Alexa for Shopping, which is a new agentic AI assistant on their website and shopping app. Now look, unlike Rufus, Alexa for Shopping will be built into the main search bar on Amazon. So instead of just typing in running shoes and getting a wall of sponsored listings, you can now ask for things like what's the best running shoes for Flat feet under $150 and Alexa will give you an actual answer with product comparisons and review summaries. You can also do things like schedule automated purchases if a product drops below a certain price point. And they're also launching a feature called Buy for Me where Alexa will go on other retailers website and buy stuff for you. Now I imagine some retailers aren't going to be very thrilled about that. Overall though, tech companies seem to be convinced that AI is the future of E commerce. So far though, it's been a mixed bag. You know Amazon launched Rufus two years ago and they said it helped 300 million shoppers in 2025. But honestly I personally never use it. I don't think my wife did either and she's on Amazon a lot. So I don't know, maybe this new Alexa feature will be more useful. So far though, no one has really figured out AI shopping. Now remember OpenAI launched a shopping feature last year called Instant Checkout that let you buy stuff directly inside chat GPT and they had big partners including Walmart, Shopify and Etsy. But that feature never really caught on and OpenAI decided to shut it down and rethink their shopping approach. Now Amazon should have an advantage here when it comes to AI shopping because you know, Amazon is the biggest e commerce platform in the world and they have a ton of shopping data. So they're rushing to figure something out because this is projected to be a big market. EMarketer estimates that US AI commerce sales will top $20 billion in 2026 and then grow by 7x by 2029. I'm personally not so convinced about the rise of agentic AI shopping, but I don't know, we'll see. Amazon shares are flat today at the time of this recording, but are up about 50 15% year to date. Let's talk about some stocks making moves today. Shares of a company called Wolf Speed are surging this morning after the research firm Citrini highlighted the stock as a way to play the AI boom. Wolf Speed is a company that makes power semiconductors, which basically helps control the voltage flowing into different parts of a device. Now that sounds boring, but it's becoming a big deal Because AI data centers are absolutely energy monsters. And as AI AI keeps scaling up and more data centers are built, that's going to require more power, which means more demand for Wolf Speeds chips. Now, what's crazy about this company is they actually just came out of bankruptcy back in September, and since then their stock has been on a tear. Shares are up over 200% this year, and it's up another 20% this morning. the time of this recording, by the way, a quick note on Citrini. It's the same research firm that published that super viral post a few months ago about AI wrecking the economy by 2028. So just keep that mine. But the market is clearly buying the analysis here. Now, on the flip side, shares of Birkenstock are falling. After the shoe company missed quarterly sales estimates and kept its full year forecast unchanged. Sales were up 14% to 618 million euros, which was just short of what Wall street was expecting. I think the big issue for investors is profit margin, which was underwhelming, coming in at 54%. The company's profits are being impacted by two things. For one, it's tariffs in the U.S. birkenstock makes 95% of its shoes in Germany and ships them globally. So tariffs hit them directly. And the other thing is that currency swings are working against them as the dollar has weakened lately. And then on top of all that, you have the Iran war. Birkenstock flagged a 6 million euro hit to the Europe and Middle Eastern segment. That's one reason why the company kept their forecast unchanged for the rest of the year. Now, to be fair, the underlying business is still growing. The Americas was up 14, Asia Pacific surged 30%, and the company is expanding into other products as well. But Wall street was expecting more. And as a result, shares of Birkenstock are down 6% this morning in reaction to the earnings. And if you zoom out, shares have dropped 30% over the last 12 months. Personally, though, I love the classic Birkenstock sandals. Let's wrap the show with the fun fact. You'll soon be able to trade the prices of AI computer chips. The CME Group, which is the biggest futures exchange in the world, announced yesterday that they're teaming up with a company called Silicon Data to create a futures market for GPU computing. So basically, you'll be able to bet on the price of renting AI chips the same way that traders currently bet on the price of oil. And look, it kind of makes sense, right? Because computing is now the new oil. Now, every time you use ChatGPT or Cloud or any AI, it requires computing power. And right now there is a massive shortage of it, which is why big tech companies are spending hundreds of billions of dollars building data centers. So I'm really curious to see what the futures market for computing power looks like now. This still is pending regulatory approval, so it's not live yet. But the fact that the CME is getting involved tells you that Wall street sees AI computing as a legitimate commodity. Now I do want to point out that Enron tried to create a futures market on fiber optic cable capacity back in the late 90s. You know, back then there was a shortage of bandwidth and Enron tried to make a market out of it, but that market never really took off. And we all know how the Enron story ended. But you know, today there is an abundance of fiber optic bandwidth. So I wonder if the same thing is going to happen with AI computing capacity. Let me know in the comments of what you guys think. Could you see yourself buying futures contracts for GPU rental prices? Well alright 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. All that engagement really does help us out and it helps other people find the show. Also, don't forget, drop in your listener questions in the comments as well. We're gonna try to answer some questions later in the week. Thank you guys again 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.