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  • ✈️ No More Free Bags Southwest?!

✈️ No More Free Bags Southwest?!

+ Nissan Replaces CEO After Failed Honda Merger

March 11, 2025

Good afternoon! A paralyzed man at UC San Francisco pulled off a mind-over-matter moment, controlling a robotic arm with just his thoughts. Researchers implanted tiny sensors in his brain that picked up signals when he imagined moving his hand. The AI-powered brain-computer interface (BCI) decoded those signals and translated them into physical movement—essentially turning brainwaves into action.

After some practice on a virtual arm, he was able to grasp, rotate, and move objects with surprising accuracy. Even more impressive, the BCI stayed functional for months with only minor tweaks—something that’s never been done before. Researchers are now refining the system to make the movements faster and smoother, with hopes of bringing it to a home setting.

MARKETS

*Stock data as of market close*

  • Stocks took a hit Tuesday as renewed tariff threats from President Trump pushed the S&P 500 into correction territory, down 10% from its recent peak. The market staged a partial comeback after Ontario’s premier softened his stance and peace talks between the U.S. and Ukraine showed signs of progress.

  • The S&P 500 still closed down 0.8%, while the Dow slid 1.1% and the Nasdaq dropped 0.2%. All three indexes logged their worst two-day drop since August, with trade uncertainty weighing heavily on sentiment.

STOCKS
Winners & Losers

What’s up 📈

  • Reddit jumped 14.4% after Loop Capital said the stock has “the biggest upside potential relative to Street estimates” and called the recent selloff a buying opportunity. ( $RDDT )

  • Southwest Airlines surged 8.34% after announcing it will begin charging for checked bags and introduce a basic economy fare following pressure from activist investor Elliott Investment Management. ( $LUV )

  • Vail Resorts climbed 7.71% after reporting stronger-than-expected earnings for its fiscal second quarter. ( $MTN )

  • Tesla rebounded 3.79% after yesterday’s steep decline, with investors stepping back into the beaten-down EV stock. ( $TSLA )

  • 2seventy bio soared 76.8% on news that it will be acquired by Bristol Myers Squibb for $286 million. ( $TSVT )

What’s down 📉

  • Asana plunged 24.2% after CEO Dustin Moskovitz announced his retirement. The company also issued weaker-than-expected first-quarter and full-year guidance. ( $ASAN )

  • Kohl’s tumbled 24.07% after issuing weak full-year guidance and reporting a 9.4% drop in fourth-quarter net sales. The company expects earnings per share between 10 cents and 60 cents, far below the $1.23 consensus. ( $KSS )

  • Teradyne sank 17.05% after cutting its second-quarter revenue outlook, now expecting revenue to be flat to down 10%, citing uncertainty from tariffs and trade restrictions. ( $TER )

  • Delta Air Lines dropped more than 7.25% after slashing its first-quarter revenue and earnings guidance due to weak domestic demand. The airline lowered its adjusted earnings forecast to 30 cents to 50 cents per share from a previous range of 70 cents to $1. ( $DAL )

  • Verizon slid 6.58% after warning that wireless subscriber growth will soften in the first quarter due to increased promotions from competitors. ( $VZ )

  • Dick’s Sporting Goods dropped 5.71% after warning that slowing consumer spending will weigh on future sales. ( $DKS )

  • Oracle fell 3.1% after fiscal third-quarter adjusted earnings of $1.47 per share missed the $1.49 estimate. ( $ORCL )

AIRLINES
Bags Will No Longer Fly Free on Southwest Airlines

Southwest just kissed its most iconic perk goodbye. After more than 50 years of letting customers check two bags for free, the airline announced Tuesday that it will start charging baggage fees on tickets purchased after May 28. Investors loved it—Southwest stock soared 8.34%—but customers are already threatening to pack their bags and head elsewhere.

No More Free Ride

“Bags fly free” wasn’t just a policy—it was Southwest’s identity. CEO Bob Jordan even said last summer that free checked bags were the “number one reason” customers chose the airline. But after Elliott Management muscled its way onto Southwest’s board last fall, the focus has shifted from customer loyalty to boosting revenue. Passengers without top-tier loyalty status or business fares will soon have to cough up a fee for checked bags, putting Southwest in line with its rivals.

Wall Street’s Loving It

The financial logic is simple: US airlines raked in over $5 billion in baggage fees last year, with most carriers charging around $35 a pop. That’s easy money, especially as Southwest looks to cut $1 billion in costs after recent layoffs, route reductions, and hiring freezes. Investors rewarded the move, sending shares soaring even as Delta tanked 7.25% after slashing its earnings outlook due to weakening demand.

Customers? Not So Much

Flyers were quick to vent. One viral post on X called the change “the stupidest thing they could do to ruin the company.” Aviation analyst Bill McGee piled on, saying, “Southwest has the strongest customer loyalty in an industry with almost no loyalty. This could destroy that.” Even Delta’s president admitted the move is “a big opportunity” to poach Southwest’s once-loyal customer base.

Strategic or Self-Destructive? Jordan insists the math checks out, claiming that fresh customer behavior data justified the change. But Southwest now faces the risk of alienating the very customers who stuck with it through turbulence. Without free bags, Southwest looks a lot more like its competitors—and for many travelers, that might be reason enough to look elsewhere.

NEWS
Market Movements

AUTOS
Nissan Replaces CEO After Failed Honda Merger

Nissan is switching drivers after its failed merger with Honda left the company skidding. Ivan Espinosa, Nissan’s chief planning officer, will take over as CEO on April 1, replacing Makoto Uchida, the automaker announced Tuesday. Espinosa has his work cut out for him: Nissan’s stock is down over 40% since Uchida took over in 2019, and the company’s latest earnings report showed a 94% drop in net income.

A Merger Gone Wrong

The Honda-Nissan tie-up was supposed to create a $60 billion automotive powerhouse to compete with Toyota and fend off rising Chinese rivals like BYD. But the deal fell apart in February when Honda pushed to make Nissan a subsidiary and shut down some factories. Uchida balked at losing Nissan’s autonomy, and the deal unraveled—leaving Nissan without a clear path forward. Uchida admitted that voices of doubt had been growing louder internally, and the company’s deteriorating financials ultimately made his position untenable.

Espinosa Takes the Wheel

Espinosa, 46, has been with Nissan since 2003 and knows the company inside and out. As chief planning officer, he’s overseen future product strategy, but now he’ll need to focus on damage control. Nissan has already announced plans to cut 9,000 jobs and slash production capacity by 20%, but analysts say it will take more than cost-cutting to fix the company’s competitive and financial problems. Espinosa hasn’t laid out specific plans yet, but securing a strategic partner—possibly Foxconn—is likely high on his list.

Renault to the Rescue? Renault, which holds a 36% stake in Nissan, welcomed Espinosa’s appointment. Renault Chairman Jean-Dominique Senard said Nissan needs to “find the strength to get back on its feet,” signaling that Renault could deepen ties if Nissan can stabilize. Renault’s recent restructuring gives Nissan more independence, but also leaves it more vulnerable without a solid backup plan.

No Margin for Error: Nissan has fallen behind rivals in EVs and hybrids, and it’s losing market share in both the US and China. The company is expected to post an annual net loss of around ¥80 billion ($550 million). Espinosa’s product expertise gives Nissan a shot at a turnaround—but without a financial lifeline or a breakthrough product, Nissan could be headed for more trouble.

This is Nissan’s fourth CEO change in eight years. If Espinosa can’t steer the ship, Nissan could be looking at more than just a leadership shakeup—it could be looking at a takeover.

Calendar
On The Horizon

Tomorrow

Tomorrow’s spotlight is on the Consumer Price Index (CPI), the last big inflation check before the Fed huddles up next week to talk rates. Economists are expecting February’s headline CPI to rise 0.3% from January, cooling the annual rate to 2.9% from 3.0%. Core inflation, which strips out food and energy, is also projected to climb 0.3% monthly and 3.2% annually.

But those forecasts come with an asterisk. The looming threat of tariffs has pushed companies to front-load imports and bump up prices, which could throw a wrench in the inflation data. All eyes are on whether the Fed will stay the course or shift its game plan.

Before Market Open:

  • Adobe is trying to thread the needle in the AI race, giving away tools like Firefly for free to lure users now and (hopefully) cash in later. But while it’s building goodwill, free AI alternatives are already eating into Adobe’s bread-and-butter subscription businesses. That leaves Adobe stuck in the middle, and shareholders are feeling the squeeze. Without a clear path to monetize its AI strategy, investors are left wondering how long the company can keep walking this tightrope. ($ADBE)

NEWS
The Daily Rundown

  • 🌍 US and Ukraine hold peace talks in Saudi Arabia: Ukrainian President Volodymyr Zelensky is meeting with US officials in Saudi Arabia to discuss a potential peace deal with Russia. The talks follow a controversial earlier round that excluded Ukraine and strained relations with European allies. Zelensky is expected to push for stronger US support and guarantees.

  • 💻 X suffered outages in suspected cyberattack: X (formerly Twitter) went dark for many users yesterday, with more than 40,000 outages reported. Elon Musk suggested a "large, coordinated" cyberattack was responsible, and the hacking group Dark Storm Team has claimed credit. The attack follows previous threats of cyberwarfare from the group targeting Israel and its allies.

  • 🌾 China imposes tariffs on US agricultural products: China has introduced new tariffs on US farm products in retaliation for Trump’s recent tariff hikes on Chinese imports. Ontario also announced a 25% surcharge on US-bound electricity, affecting over 1.5 million American households. The trade war escalation has raised concerns over broader economic fallout.

  • 📀 Warner Bros. DVDs rotting due to defect: Warner Bros. confirmed that many DVDs produced between 2006 and 2008 are deteriorating due to a manufacturing defect. Some affected titles, including "The Wild Bunch," may become lost media as they’ve never been released digitally or on Blu-ray. Warner Bros. is offering replacements for damaged discs.

  • 🚢 North Sea collision leads to fire and arrest: A collision between a Portuguese container ship and a US-flagged oil tanker off England’s coast resulted in a fire and one crew member being hospitalized. The captain of the container ship was arrested on suspicion of gross negligence manslaughter. Environmental groups have raised concerns over potential fuel leaks.

  • 🏛️ Supreme Court to review Colorado's conversion therapy ban: The US Supreme Court will hear a challenge to Colorado’s ban on conversion therapy for minors. A Christian counselor argues the law violates religious freedom and free speech rights. The ruling could impact similar laws across the country.

  • 📉 Justice Department investigates egg price surge: The DOJ has launched a probe into soaring egg prices, investigating whether major egg producers coordinated supply and pricing to inflate costs. Producers blame avian flu for the increases, but the DOJ suspects anti-competitive practices.

  • ✝️ Pope Francis shows improvement after hospitalization: Pope Francis is recovering from bilateral pneumonia at Rome's Gemelli Hospital. His condition has stabilized, but doctors have advised continued hospital care. The 88-year-old pontiff has resumed participating in spiritual exercises via video link.

  • 🗞️ Washington Post columnist resigns over Bezos censorship: Veteran Washington Post columnist Ruth Marcus resigned after the paper refused to publish her column criticizing owner Jeff Bezos. Marcus cited concerns over editorial independence, raising questions about the paper’s direction under Bezos’s ownership.

  • 🛡️ Palestinian activist's deportation temporarily blocked: A federal judge has temporarily halted the deportation of Mahmoud Khalil, a Palestinian activist linked to Columbia University protests. DHS alleges ties to Hamas, which Khalil denies. The case has sparked debates over free speech and constitutional rights.

RESOURCES
The Federal Reserve Resource

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