A (0:00)

Public.com presents the rundown. Your daily market update in 10 minutes. My name is Zaydad Mani and Today is Wednesday, April 29th. In today's episode, we'll break down why the UAE just quit OPEC and what it means for oil prices. We'll also tell you why Starbucks turnaround plan is picking up steam. Then stick around to the end of the show to find out about Disney's big decision about ESPN's future. We got a great show for you today. Let's go. Well, stocks pulled back from record highs on Tuesday with the S&P 500 dropping half a percent while the NASDAQ dropped nearly 1%. The worst performing sector yesterday was tech and I'm going to blame OpenAI for this one. There was a report in the Wall Street Journal Yesterday that said OpenAI's growth is slowing down and the company isn't hitting their internal revenue and user targets. We actually broke that story down in detail on yesterday's show, so go check that out if you missed it. But yeah, that story was enough to spook invest a potential AI slowdown. Semiconductor stocks took the biggest hit yesterday. Companies like Broadcom, AMD and Micron were all down around 4%. Now the market is also getting dragged down from rising oil prices from the Iran war. Energy was the best performing sector yesterday as oil prices continued to climb. Oil has now gone up for seven days in a row with Brent crude sitting above $114 a barrel while WTI is above $103 a barrel. Gas prices in the US are now at the highest level in four years with with an average of $4.18 a gallon, according to the AAA Motor Club. Now speaking of Iran, negotiations have totally stalled and the US is reportedly looking to extend its naval blockade of Iranian ships and ports, preventing Iran from exporting their oil and putting pressure on their economy. So there is no signs of things calming down and I think the market is starting to take notice of that. Again, big picture, we could be looking at elevated gas prices for the foreseeable future and that could lead to a temporary spike in inflation which which could lead to the Fed having to wait longer to cut interest rates. Now we're actually going to be hearing from the Fed today. The FOMC meeting wraps up this afternoon. Now the Fed is unlikely to change rates at this meeting, but we'll see what Jerome Powell says in his press conference on the timing of a future rate cut. Now it's also possible the market totally ignores what Jerome Powell says in his press conference because this will likely be his last meeting as Fed Chair. His term as Fed chair ends on May 15, and we'll recap all the best parts of the press conference on on tomorrow's episode. And if that wasn't enough action for one day, we're also getting earnings this afternoon from Google, Microsoft, Amazon and Meta. So the whole market vibe could be really different by tomorrow, depending on what happens at the Fed meeting and what these companies report in their earnings. So yeah, tomorrow's show is going to be packed with information, so definitely get subscribed for the podcast and tune in to stay in the loop. Let's run through some headlines, starting with the uae. The United Arab Emirates just announced that it's leaving opec, effective this Friday. Now this was pretty shocking news when it came out yesterday. I honestly didn't know what to make of it. This is the first time that a top producer has ever walked away from the oil cartel. A quick background on opec. It's a group of oil producing countries that have essentially worked together to control oil prices since it was formed in 1960. But over the last 15 years or so, OPEC's influence has been has been shrinking. And the biggest reason for that is the fracking revolution in the US that made the US the world's largest oil producer. Now, getting back to the UAE, they've been frustrated with OPEC. See, under OPEC's rule, the UAE was only allowed to produce about 3.4 million barrels a day. But the UAE has the capacity to produce up to 4.8 million barrels a day. So that's a lot of oil they've been forced to leave in the ground. The thing is, Saudi Arabia is OPEC's largest and most influential producer. They kind of run OPEC and the Saudis want to keep oil prices high, close to $100 a barrel because that's what the Saudi government needs to balance their budget. The uae, on the other hand, can turn a profit at a much lower price. So from the Emirati's perspective, they've been leaving money on the table for years just to prop up Saudi Arabia's finances, and now they're tired of it. Let's shift gears and talk about Starbucks. Starbucks reported earnings last night and the numbers suggest their turnaround plan is finally starting to work. Revenues in Q1 jumped 9% to $9.5 billion, beating estimates. Profits surged 33%. To me, though, the most encouraging metric was the same store sales numbers global. Same store sales were up 6.2% in Q1, beating expectations of 4% and in the US same store sales jumped 7.1%, which is the second straight quarter of domestic growth. And before the last two quarters, US same store sales were flat or declining for seven straight quarters. So this is the first real sign that customers are coming back. So I got to say, man, CEO Brian Niccol, who Starbucks hired from Chipotle Chipotle back in 2024, has been getting some results. He's calling this turnaround plan back to Starbucks. And he has the company focused on better service, upgraded stores and a more innovative menu. Like for example, Starbucks is pushing more into protein, which has been effective. Starbucks's vanilla protein latte has emerged as the most popular protein drink. And the protein cold foam has become a top add on. Now these protein add on options are now available in roughly 90% of the drinks and that's key because they cost extra and that' pushing the average check size higher. So basically, Starbucks has figured out how to combine America's two current obsessions right now, caffeine and protein. And it's leading to more sales. Now, it wasn't a perfect quarter for Starbucks. Sales in China were basically flat, which is Starbucks second largest market. Also, tariffs and higher coffee bean costs are impacting their margins. But investors are clearly buying into the turnaround story. Starbucks stock is up around 5% this morning in reaction to the earnings. And the stock has already gone up around 20% for the year. With this new momentum, Starbucks plans to open 150 to 175 net new locations in the US this year. And they're also opening a new $100 million corporate office in Nashville. Let's talk about some stocks making moves today. Shares of Visa are up this morning after the company beat earnings across the board. Revenues jumped 17% to $11.2 billion, which is the biggest revenue increase the company has posted since 2022. The big takeaway from the earnings is that consumers are still spending. Payment volumes and total transactions both rose 9% and cross border spending climbed 12%. To go a step further, Visa CFO said they're not seeing any signs of consumers pulling back even with grass prices surging because of the Iran war. The company also raised its full year revenue and profit outlook and announced a $20 billion share buyback program. As a result, shares of Visa are up around 9% this morning. Now on the flip side, shares of Robinhood are down after the company missed on both revenue and earnings for the quarter. Revenue was up 15% to $1.07 billion, but that was below the $1.14 billion that Wall street was expecting. The big drag on the business was crypto. Crypto trading revenue fell 47% from a year ago as bitcoin and other digital assets lost momentum. Crypto has historically been one of Robinhood's biggest growth engines. So when bitcoin is ripping, Robinhood usually benefits. But when crypto gets boring like it is now, Robinhood tends to take a hit. But look, to Robinhood's credit, the company is building other revenue streams. Prediction markets were a bright spot, with events contracts hitting a record 8.8 billion in the quarter. And then Robinhood Gold subscriptions also helped, with revenues jumping 32%. But investors are still focused on the slowdown in the core business. Options equities and crypto trading volumes are all down from the previous quarter. And Robinhood also warned that expenses jumped 18% in Q1, partially tied to the work on the Trump accounts, which will require an additional $100 million. As a result, shares of Robinhood are down around 12% this morning at the time of this recording. Let's wrap the show with a fun fact. Disney has decided not to spin off espn. See, for years, investors have been pushing Disney to spin off ESPN into its own company because ESPN was seen as a declining cable business, dragging down Disney's overall value. And honestly, it's a fair point. Now, ESPN used to be Disney's profit engine because they could charge cable companies whatever they wanted to serve the channel. But about 10 years ago, Cord cutting started taking off, leading to declining cable subscribers, and now ESPN is seen as a declining asset. Well, despite that, Disney's new CEO, Josh demaro, still wants to keep ESPN inside Disney. And the plan is to bundle ESPN with Disney plus and Hulu. I'm not really sure how I feel about that because, you know, if you're a sports fan, you can't just subscribe to espn. You need to subscribe to all the other streaming services as well. So in that case, it's just easier and better to subscribe to a cable service like YouTube TV, which is what I do. Anyways, Disney is reporting earnings next week, so we should get more information on their streaming business and we'll see if management has any additional information about the ESPN stuff during the earnings call. 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. 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.