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☕️ Starbucks Brews Up a Turnaround

+ Novo Nordisk’s Ozempic Gets Green Light for Kidney Disease Treatment

January 28, 2025

Good afternoon! AI startup founder Alexander Beckman and his wife, Valerie Lau Beckman, are accused of pulling off a $60 million scam that funded a Tesla, a $4.2 million San Francisco home, and even their wedding. The duo allegedly faked financial records, forged signatures, and inflated revenue claims to lure investors into their struggling company, GameOn Technology (now ON Platform). At one point, they claimed a bank balance of $13 million—when the actual balance was just $25.

Things began unraveling in 2023 when investors started digging into GameOn’s finances, uncovering forged bank statements and fake audits. According to the FBI, Valerie even planted a bogus document at a bank to keep the facade going. By mid-2024, Beckman resigned, leaving employees unpaid and the company’s reputation in shambles. The couple now faces over 60 years in prison if convicted, with authorities looking to seize their ill-gotten assets.

MARKETS

*Stock data as of market close*

  • The Nasdaq and S&P 500 staged a comeback Tuesday after Monday’s DeepSeek-fueled sell-off rocked the AI sector. Nvidia stole the spotlight, surging nearly 9% and regaining some ground after erasing over $589 billion in market value just a day earlier. The tech-heavy Nasdaq jumped 2%, while the S&P 500 added 0.9% and the Dow inched up 0.3%.

  • Tech stocks led the recovery, marking their largest two-day turnaround in over two years. Nvidia’s rebound helped lift the sector, while Oracle clawed back 3.6% after Monday’s losses. Despite the optimism, the broader market showed mixed results as investors braced for upcoming mega-cap earnings and the Federal Reserve’s interest rate decision.

STOCKS
Winners & Losers

What’s up 📈

  • Brighthouse Financial soared 14.17% following reports that the insurer is exploring a potential sale. ($BHF)

  • Royal Caribbean Cruises jumped 12% after delivering strong earnings and issuing robust first-quarter and full-year guidance. ($RCL)

  • Nvidia climbed 8.93%, rebounding from the previous day’s 17% drop as investors saw a buying opportunity. ($NVDA)

  • Carnival rose 8.14%, and Norwegian Cruise Line advanced 7.77%, riding the positive sentiment from Royal Caribbean’s results. ($CCL, $NCLH)

  • Cybersecurity stocks rallied, led by CrowdStrike gaining 9.35%, Zscaler up 7.03%, and Palo Alto Networks adding 1.92%. ($CRWD, $ZS, $PANW)

  • TSMC gained 5.25%, shrugging off concerns over potential U.S. tariffs targeting Taiwanese semiconductor chips. ($TSM)

What’s down 📉

  • JetBlue plunged 25.71% after issuing a disappointing cost outlook for 2025 and Q1, despite beating Q4 earnings estimates. ($JBLU)

  • Lockheed Martin sank 9.18% following weaker-than-expected revenue and conservative forward guidance. ($LMT)

  • General Motors fell 8.89% as investor doubts over management’s fiscal 2025 projections outweighed its Q4 earnings beat. ($GM)

  • Synchrony Financial dropped 4.58% after missing earnings estimates with $1.91 per share versus the $1.93 expected. ($SYF)

  • Juniper Networks declined 6.08% amid reports that the DOJ may block Hewlett Packard Enterprise’s acquisition of the company. ($JNPR)

EARNINGS
Starbucks Brews Up a Turnaround

Starbucks may still be nursing a hangover from its tough 2024, but there’s a glimmer of caffeine-fueled hope. The coffee giant reported a 4% drop in same-store sales for Q1, a smaller decline than Wall Street’s 5.5% expectation and a notable improvement from the previous quarter's 7% slide. Investors were perked up, sending shares up 3% in after-hours trading.

Reigniting the Roast

CEO Brian Niccol, just five months into his tenure, has been steaming ahead with his “Back to Starbucks” strategy. From nixing the nondairy milk upcharge to revamping condiment bars and rolling out cozy, customer-centric policies, the company is doubling down on improving the in-store experience. Niccol has even brought in former Taco Bell colleagues to help brew a smoother operational blend.

But it’s not all lattes and smiles yet. Traffic to U.S. stores dropped 8%, and China—a key market—saw same-store sales fall 6% as Starbucks leaned into discounts to compete with budget-friendly rivals like Luckin Coffee.

Profit vs. Progress

Starbucks posted $9.4 billion in revenue for the quarter, flat year-over-year but ahead of estimates. Earnings per share hit $0.69, also topping expectations. However, net income took a 23% hit, reflecting investments in Niccol’s turnaround plan and wage hikes for baristas. Operating margins were pinched, but analysts remain optimistic about the long-term payoff.

A Latte on the Line

The chain’s overhaul extends beyond the café counter. Starbucks plans to scale back new store openings and renovations in 2025, redirecting funds to fuel its comeback efforts. Layoffs are also on the horizon as the company reshapes its corporate structure for clearer accountability.

Niccol’s bold moves—and Wall Street’s vote of confidence—suggest the turnaround might just have the steam to deliver. For now, Starbucks is walking the fine line between brewing better customer experiences and balancing profitability.

NEWS
Market Movements

PHARMA
Novo Nordisk’s Ozempic Gets Green Light for Kidney Disease Treatment

Novo Nordisk’s blockbuster drug, Ozempic, just expanded its resume. The FDA approved the GLP-1 injection to treat chronic kidney disease in adults with Type 2 diabetes, offering a lifeline for millions battling progressive kidney failure and related cardiovascular risks.

A Lifesaver in a Syringe

Ozempic has already been a game-changer for diabetes and weight loss, but this approval takes it further. The drug slashed the risk of severe kidney outcomes—think kidney failure or death—from 24% to 29% in trials. For a condition affecting 37 million Americans, that’s huge. Novo’s Chief Medical Officer Stephen Gough called it a breakthrough in addressing diseases that “cluster within the same individuals,” targeting diabetes, obesity, kidney disease, and cardiovascular conditions with a single injection.

A Competitive Landscape

This FDA nod strengthens Ozempic’s position as the most broadly approved GLP-1 drug. Novo now faces increased rivalry from Eli Lilly, whose own GLP-1 drugs are making waves, but with this approval, Novo aims to maintain its lead. The decision could also shake up the dialysis market, echoing the phase-three trial’s results that caused kidney dialysis stocks to plummet last year.

Beyond the Injection: Ozempic’s approval marks another win for GLP-1 drugs, which are proving their value beyond diabetes. The broader implications—like reducing cardiovascular and kidney risks—could reshape treatment strategies and encourage expanded insurance coverage.

Calendar
On The Horizon

Tomorrow

The Federal Reserve kicks off its first meeting of the year, with inflation and interest rates taking center stage. Fed Chair Jerome Powell is set to deliver the verdict tomorrow, and while markets are watching closely, there’s little expectation of a rate cut—current odds stand at a slim 0.5%.

Tomorrow’s after-hours session will bring updates from three tech heavyweights: Tesla, Microsoft, and Meta Platforms. Their numbers are poised to offer fresh insights into how the sector is navigating a volatile market landscape as 2025 gets rolling.

Before Market Open:

  • The first chipmaker to report earnings since DeepSeek’s AI bombshell, ASML Holding has some explaining to do. With analysts eager for updates on capital spending, the real spotlight will be on how tariffs and geopolitical tension are squeezing the company’s margins. Shares have been under pressure, but Wall Street remains optimistic with every analyst covering the stock issuing a “buy” rating. Consensus expectations sit at $6.71 EPS and $9.02 billion in revenue. ($ASML)

After Market Close:

  • IBM may have roots in legacy tech, but it’s been steadily planting seeds in AI, cloud computing, and quantum technology. These forward-looking investments make the company more than just a relic of tech’s past, even if its pace of innovation is deliberate. Add to that a stable dividend that offers a cushion for patient investors, and IBM is quietly making its case as a long-term play. Analysts anticipate $3.79 EPS on $17.6 billion in revenue this quarter. ($IBM)

NEWS
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RESOURCES
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