← 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 Monday, April 13th. In today's episode, we'll break down the US blockade of the Strait of Hormuz and what it could mean for oil prices. We'll also recap Goldman Sachs earnings and tell you why the stock is falling despite a record quarter. Then stick around to the end of the show to find out why every company in America is suddenly trying to sell you an energy Dr. Drink. We got a great show for you today. Let's go. The markets are coming off their best week of the year. The S P 500 was up 3% last week while the Nasdaq jumped more than 4% thanks to the ceasefire announced between Iran and the U.S. oil prices also saw their biggest weekly drop since 2020, dropping over 12 to 95 a barrel. Investors were breathing a sigh of relief at the end of last week and optimist speak about a potential long term resolution regarding the Iran war. Well, some of that optimism faded over the weekend. The US And Iran met in Islamabad, Pakistan over the weekend and there was no deal struck between the two sides. And then to add on top of that, President Trump just announced that the US Navy will do a full blockade of the Strait of Hormuz to prevent Iranian ships from passing through. So we got more Hormuz drama and that news is sending oil prices back up again. It's trading over a hundred dollars a barrel as of this morning. So to me this seems like a classic two steps forward that back situation. Now keep in mind overall the stock market has actually held up pretty well all things considered. I had to double check this but the S P is less than 3% from all time highs which is pretty crazy. And we're now about to kick off earnings season and I'm really interested to see what happens now because strong corporate earnings have been the main reason the market has held up and analysts are expecting another strong quarter with S&P 500 companies projected to post about a 12.6% earnings growth which would be the sixth quarter straight quarter of double digit growth. So it's going to be interesting to see which storyline ends up dominating the markets over the next few weeks. Will the uncertainty with Iran overshadow the earning season or will investors look past the geopolitical stuff and focus on earnings? We are about to find out. This week we're going to be hearing from major banks like JP Morgan, Citi, Wells Fargo, bank of America and more. We're also going to be getting earnings from asml, TSMC and Netflix. So we had an action packed week ahead and the next few weeks should be very interesting. So if you haven't already, it's a great time to get subscribed to the podcast and tune in every day to stay in the loop. Let's run through some headlines and let's talk more about the Hormuz blockade. As of 10:00am Eastern this morning, the U.S. navy has officially began a blockade of the Strait of Hormuz targeting any ships entering or leaving Iranian ports. It's an interesting turn of events. First it was Iran blocking ships, now it's the US Military. So let's get into the details and what it could mean for the global economy and gas prices. Here's what's important to understand. This is not like a full on blockade of the entire Strait. The US Central Command clarified that ships traveling to and from non Iranian ports will not be impeded. The US Military is specifically targeting ships leaving Iranian ports to choke off Iran's economy, which heavily relies on oil exports. See One of the biggest leverage that Iran had during the war was the control of the Strait of Hormuz. They were able to disrupt traffic while allowing their own ships to continue and take advantage of the higher crude prices. According to some estimates, Iran was exporting nearly 2 million barrels of oil a day, mostly to China. So this blockade by the US Military is designed to cut that off and could cost the Iranian economy $13 billion a month. So I guess the idea here is to force Iran back at the negotiating table with less leverage. But the big risk now is retaliation from Iran, which could increase volatility in the global energy markets. Gas prices are now already over $4 a gallon here in the US and the speaker of Iran's parliament warned on X that Americans will soon be nostalgic for $4 gas. So we'll see if this blockade works. I mean, oil prices did spike to nearly $105 a barrel this morning, but half pulled back to around $100 a barrel as of this recording. Let's shift gears and talk about Goldman Sachs. The bank just reported earnings this morning and it was kind of a m bag. Q1 revenues and earnings both topped estimates. Revenues came in at $17.2 billion and profits jumped 19% from a year ago to $5.6 billion. The big driver was their trading business, equities. Trading revenues soared 27% to $5.3 billion, which is the bank's biggest quarter ever for that division. CQ1 had a lot of market volatility. Everything from geopolitical tensions to big swings in oil prices. And all the chaos around AI disrupting tech stocks. And volatility is generally great if you're a big bank like Goldman, because more chaos means more clients are calling you to reposition their portfolio. Beyond the equities trading, investment banking also came in strong for Goldman. Fees jumped 48% to $2.8 billion in Q1. So on the surface, Q1 was a great quarter. In fact, it was Goldman's highest profit in about five years. But there was a problem. Their fixed income trading business really disappointed. Revenues actually dropped 10% to 4 billion dol. The bank blamed this on lower revenues coming from their interest rate products and mortgages. And because of that, Ms. Goldman stock is down around 4% this morning. Despite the overall earnings beat. Wall street seems to be zeroing in on the fixed income division and wondering what it means for the rest of the year, especially with the Iran situation still unresolved. We'll get a better picture of the banking sector later this week when we hear from JP Morgan, Citi, Wells Fargo, bank of America. So stay tuned for that. Let's talk about some stocks making moves today. Shares of Revolution Medicines are absolutely skyrocketing today after the biotech company announced a major breakthrough in pancreatic cancer treatment. The company says that one of its drugs, which I'm not going to try to pronounce, succeeded in a late stage phase three trial and almost doubled patient survival compared to chemotherapy. Patients taking the pill lived a median of 13.2 months versus 6.7 for patients on chemotherapy and also cut the risk of death by 60%. Now, pancreatic cancer has some of the lowest five year survival rates of any major cancer at just 13%. And until now, the only treatment option for these patients was chemotherapy. So this will be a game changer. Revolution Medicine says it plans to move quickly and seek FDA approval. That caught the attention of Wall street. And shares of the company are up more than 35% at the time of this recording. Now on the flip side, shares of Best Buy are down this morning after Goldman Sachs downgraded the retailer from neutral to sell with a price target of $59. The big concern that Goldman has is the PC market. We've talked about this a lot, but memory chip prices have been rising because of the supply crunch tied to the AI demand. Memory chip makers are prioritizing making high end memory chips for AI data centers which is reducing their supply of regular ram, which is pushing up prices for companies that make laptops and PCs. So that means that computers might continue to get more expensive. And, and when computers get more expensive, consumers either trade down to a cheaper option or they just don't buy one at all. Neither scenario is great for Best Buy. Best Buy shares have dropped around 20% over the last six months and they're down another 3% this morning to around $60 a share. Let's wrap the show with the fun fact McDonald's is getting into the energy drink business. According to a new report from the Wall Street Journal, McDonald's is adding energy drinks and and specialty sodas to all of its US Restaurants later this year. Some of the new drinks include a Red Bull Dragonberry Energizer and a dirty Dr. Pepper. You know, these days it feels like every company in America is now trying to sell you a caffeinated beverage. Dutch Bros. Has them, Starbucks has them. Even Costco recently launched their own Kirkland brand energy drinks, which we talked about on the show a couple of weeks ago. Now I actually tried to buy some but they weren't available at my local Costco. So I still haven't tried them yet. And look, I don't really blame these companies for trying to get into the energy drink market because it's an 85 billion dol industry and it continues to grow every year. Americans are addicted to caffeine. Longtime listeners know that. I also have a Celsius addiction. Plus it's a high margin business. So yeah, it's a no brainer for McDonald's to add energy drinks to their menu. Now the whole dirty soda trend, I don't really get that, but I'm gonna leave that one alone. By the way, here's a bonus fun fact. The best performing stock in The S&P 500 over the past 30 years is monster Energy. So if you invested In Monster Energy 30 years ago, you would have made more money than if you invested in Nvidia at their ipo. 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.
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