Loading summary
Transcript4 lines
- [00:00]
A
Public.com presents the rundown. Your daily market update in under 10 minutes. My name is Zaidad Mani, and Today is Friday, March 6th. In today's episode, we'll tell you why oil prices just had their biggest spike since 2020. We'll also break down this morning's jobs report. Spoiler alert. The numbers weren't great. Then stick around to the end of the show to find out what Microsoft is planning for the Xbox. We got a great show for you today. Let's go. Well, stocks were back to selling off on Thursday as rising oil prices are starting to spook the market. The s and P 500 was down 0.6% while the Nasdaq fell 0.3%. Nearly three out of every four stocks in the S P finished lower yesterday. The only real winner was energy stocks. That's because oil prices are surging right now. Crude oil jumped nearly 10% on Thursday alone as traffic through the Strait of Hormuz has come to a standstill because of the war in the Middle East. Now, there's thousands ships right now stuck in the Persian Gulf and Middle Eastern countries have had to cut back on production. So all of this is pushing up the price of oil. And as of this morning, a barrel of oil is trading above $86, which is the highest level in nearly two years. If you look at the past five trading sessions, prices have gone up 25%. So it's been a sudden spike in prices. The concern here is that if oil prices keep climbing, it'll put upward pressure on inflation again. And if inflation starts taking back up within, the Federal Reserve won't be able to cut interest rates. And I think that's what's into the market sell off right now. You know, when the week started, markets were pretty resilient despite the war breaking out. And I think that's because investors remembered what happened back in June of last year when there was a strike on Iran. But that conflict only lasted for a couple of days. There was very little disruption to oil supplies, minimal retaliation, and markets kind of shrugged it off. So I think investors thought the same thing would happen this time. But it looks like this is turning into a wider and longer conflict with no end in sight as of right now. So I think that's what's making investors nervous and we'll have to see where the markets go from here. By the way, the energy sector was already the best performing sector in the S and P this year. And with everything going on, that might continue to be the case moving forward. Now, to be fair, Overall, the S P is only down like 1% on the week, so it's not in full on panic mode just yet. But I think the inflation concerns could weigh on the markets for a while. If this war drags on, I think it'll all come down to oil prices. I'm actually going to be talking to a senior commodities analyst today to learn more about the oil market and where things could go and the overall impact that oil could have on the stock market and the economy. That interview will be posted on Sunday, so keep an eye on your podcast feed for that. Let's run through some headlines, starting with the February jobs report. The February jobs report just dropped this morning, and the numbers aren't pretty the US economy lost 92,000 jobs and the unemployment rate climbed to 4.4%. Now these are some shocking numbers here because economy economists were expecting 50,000 jobs to be added. So this is a pretty big miss. In fact, it's one of the largest monthly drops since the pandemic. And to make matters worse, the December numbers were revised down to show a loss of 17,000 jobs. So that means that three out of the last five months the economy has seen job losses. Now, to be fair, some of the weakness in the February report might just be temporary. You know, we had severe winter storms in February that forced businesses to shut down across parts of the country, which likely weighed on the hiring numbers during the month. There was also a strike of health care workers. So some of this weakness might be temporary. But even accounting for that, I think this report will raise new questions about whether the labor market is actually stabilizing or starting to weaken again. If you look at other sectors, manufacturing lost 12,000 jobs despite all the tariff talks about reshoring. The information sector lost about 11,000 jobs. Some of that might be AI related. And transportation warehouses dropped 11,000 jobs as well. So this is going to put the Federal Reserve in a pretty tough spot because on one hand, the job market might be weakening, which would normally push the Fed to cut interest rates. But on the other hand, we got oil prices surging again because of the war in the Middle east, which could push inflation higher. So we'll see what the Fed decides to do. The next Fed meeting is in 10 days, so we'll see what Jerome Powell has to say. I got to say, the next Fed chair, Kevin Warsh, who's expected to take over in May, he is coming in at a tough time right now. Let's shift gears and talk about Costco. They reported earnings last night, and once again the Numbers came in strong. Comparable sales for the company grew by 6.7%, beating estimates. And their total revenues and profits also came in higher than expected. Costco's membership fees continue to grow. They made $1.36 billion for membership fees last quarter, which is up from the $1.2 billion a year ago. Having that predictable and growing reoccurring revenue is just an incredible business model and key to Costco's success. Now, Costco is also an expansion Mode. They opened four new warehouses in Q4, and they're targeting roughly 28 new locations this fiscal year. You know, Costco's valuation has become a talking point recently. They trade at a forward PE of 45, which is a higher multiple than even Nvidia. But you can kind of see why they have that multiple. They continue to put up steady sales growth, they continue to expand, and they have a predictable and growing membership revenue, which makes it attractive to investors. That being said, Costco stock didn't really move much in reaction to these earnings. Now, one interesting note from the earnings report, Costco has sued the government to receive their tariff refund after the Supreme Court struck down the IPA tariffs. Costco said that if and when it does receive the terror Free funds, management plans to pass that value back to customers through lower prices and better deals. Let's talk about some stocks making moves today. Marvell shares are jumping this morning after the chip maker delivered a better than expected earnings report. Thanks largely to the continued AI boom, Marvell has quietly become an important player in the AI space. They design custom AI chips for the biggest tech companies, including Amazon's in house Trainium chips. But the fastest growing segment of Marvell's business isn't chip design, but rather networking gear. Marvell sells networking hardware used inside these AI data centers that link together thousands of GPUs and servers. That part of the business is booming right now. The company expects its interconnect networking segment to grow more than 50% this year. Just for some context, Marvell's data center revenue was up 21% year over year. So the networking side of the business is growing at double the rate. Investors clearly like what they heard. Marvel shares are up more than 10% this morning at the time of this recording. Now, on the flip side, shares of the clothing retailer Gap are moving lower after the company reported mixed quarterly results. Now, one big issue during the quarter was the historic winter storms across the US which forced the company to temporarily close about 800 stores across the country. But beyond that, though, they're also struggling with their Athleta brand, which saw a 10% decline as they face competition from Alo and Vori. The rest of the Gap brands, though, including Old Navy, Banana Republic and the Gap brand itself, actually saw some growth. Big picture though, the company is losing some momentum. They're expecting sales to grow about 2 to 3% this year and they're expecting tariffs to weigh on their gross margins. As a result, shares of the company are down around 10% this morning at the time of this recording. Fun fact though, Gap has been in a nice turnaround. Their stock has actually outperformed Apple, Microsoft, Meta and Amazon over the last 12 months. Let's wrap the show with a fun fact. Microsoft is working on a new Xbox console, codename Project Helix. And according to Microsoft's new gaming CEO Asha Sharma, this console will play both Xbox games and PC games, which could be a game changer. No pun intended. Having one device that can play everything would be amazing. Now, Microsoft didn't give us a release date on the new Xbox, but AMD, which makes the GPUs for it, hinted at a 2027 launch. So maybe next year. You know, it's a very interesting time for Xbox and the gaming division overall at Microsoft. They've been struggling recently. The bet on Xbox Game Pass and cloud gaming hasn't really paid off and that's led to a pretty significant leadership shakeup at the company. Longtime Xbox CEO Phil Spencer recently stepped down and was replaced by Asha Sharma, who is a former Microsoft AI executive. Now a lot of people were surprised by this because she herself admitted that she's not a gamer. So a non gamer is in charge of Microso gaming division. And in fact some people thought that was a sign that Microsoft might just kill the Xbox down the line. But I guess for now the Xbox isn't going anywhere, which I'm happy to see. Now I've always been an Xbox guy. I'm happy that it's going to be sticking around. Even though I don't have much time to game anymore. I'm going to need something to play GTA 6, you know. So we'll see if Microsoft and Asha Sharma can turn things around. I do wonder though if Microsoft regrets the 69 billion dollar Activision acquisition from a few years ago because I mean, you can buy a lot of AI chips for that much money. All right guys, that's the rundown for today. That's the rundown for this week. What an absolutely wild week. And I have a feeling we're going to be talking a lot more about oil prices over the next few days. By the way, keep an eye on your podcast feed over the weekend. We're dropping a deep dive tomorrow about the Strait of Hormuz and the importance of it when it comes to the oil trade, and we're also interviewing a commodities expert. That interview will be dropping on Sunday morning, so if you want to learn more about oil and the impact it's going to have on the markets, definitely tune in for that. By the way, if you guys enjoy the show, consider giving giving us a five star rating on Apple, Spotify, YouTube, wherever you listen to your podcast. 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.
- [09:49]
B
Take the scenic route in Abercrombie's new spring collection, designed for weekend getaways full of layers like sweaters, dresses and matching sets that take you from happy hour straight to a weekend upstate. The piece on everyone's radar is their new reversible trench coat. It's navy on one side and a coastal plaid on the other. The perfect spring staple. Get your closet ready for spring plans. Shop Abercrombie in the app, online and in stores.
- [10:19]
C
Close your eyes, exhale, feel your body relax and let go of whatever you're carrying today. Well, I'm letting go of the worry that I wouldn't get my new contacts in time for this class. I got them delivered free from 1-800-contacts. Oh my gosh, they're so fast. And breathe. Oh, sorry. I almost couldn't breathe when I saw the discount they gave me on my first order. Oh, sorry. Namaste.
- [10:43]
A
Visit 1-800contacts.com today to save on your first order. 1-800-contacts.