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  • 💳 Netflix Increases Price... Again?

💳 Netflix Increases Price... Again?

+ Trump to Announce New AI Investment Push With OpenAI, Softbank, Oracle

January 21, 2025

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Canoo, the once-hopeful (and quite ugly) EV darling, has officially thrown in the towel, filing for Chapter 7 bankruptcy and ceasing operations. Despite raising $600 million through a SPAC in 2020 and partnerships with Walmart and NASA, the company’s lofty ambitions unraveled under mounting debt, failed funding talks, and operational missteps. With liabilities topping $164 million, Canoo’s electric dreams have fizzled out.

Led by CEO Tony Aquila, Canoo tried to pivot to commercial fleets and build manufacturing hubs in Oklahoma but failed to deliver more than a few EVs. Once in talks with Apple and boasting futuristic tech like steer-by-wire systems, Canoo is now a cautionary tale of over-promising in the SPAC-fueled EV race. The company’s collapse highlights the challenges of surviving in an increasingly competitive EV market.

MARKETS

*Stock data as of market close*

  • Stocks bounced higher Tuesday, with the Dow jumping 1.2% and the S&P 500 up nearly 0.9%, reclaiming its spot above the 6,000 mark. Investors breathed easier as Trump’s initial trade moves avoided heavy tariffs, while earnings from 3M and a rally in small caps gave markets a boost.

  • AI plays grabbed headlines too, with a surge in stocks tied to a rumored investment initiative featuring Softbank and Oracle. Energy stocks rose on Trump’s early executive orders, while Tesla and Apple saw a bumpy day. All eyes are now on how Trump’s policies will shake up the trade landscape in the weeks ahead.

STOCKS
Winners & Losers

What’s up 📈

  • Urban Outfitters jumped 9.87%, hitting a record high after Morgan Stanley upgraded it to "overweight," citing strong sales growth. ($URBN)

  • Vistra climbed 8.48% after fire-related evacuation orders at its battery storage facility were lifted. ($VST)

  • Reddit gained 7.41% after Raymond James analysts raised their price target for the social media company from $150 to $200. ($REDDIT)

  • Moderna popped 5.37% on news of a $590 million U.S. government grant to develop a bird flu vaccine. ($MRNA)

  • Roku gained 5.07% following an outperform rating from JMP, citing its dominance in U.S. streaming and potential advertising growth. ($ROKU)

  • General Motors advanced 5.73% after Deutsche Bank upgraded it to buy, citing limited downside and share buyback potential. ($GM)

  • 3M added 4.16% following a strong earnings report driven by robust sales in adhesives and electronics. ($MMM)

What’s down 📉

  • Trump Media & Technology Group fell 11.09% after a post-inauguration selloff, reversing prior gains. ($DJT)

  • Walgreens Boots Alliance tumbled 9.19% as the DOJ sued the retailer for allegedly fueling the opioid epidemic. ($WBA)

  • Apple dropped 3.19% after Jefferies and Loop Capital downgraded the stock, citing weak iPhone sales in China and subdued AI prospects. ($AAPL)

EARNINGS
Netflix is raising prices after reporting its biggest-ever subscriber jump

Netflix wrapped up 2024 in blockbuster fashion, adding a record 19 million subscribers in Q4. That’s double what Wall Street expected and brings its global tally to over 300 million—an all-time high.

Why the Surge?

Two words: Squid Game. The second season of Netflix’s mega-hit drove viewership through the roof. But the real game-changer? Live sports. A Jake Paul vs. Mike Tyson boxing match scored 108 million global viewers, while Christmas Day NFL games (yes, with a Beyoncé halftime show) reeled in 30 million more. Turns out, live events aren’t just for cable anymore.

Netflix’s pivot to live programming isn’t just about engagement—it’s also a power play to boost its fledgling ad business. With over 55% of new sign-ups opting for the ad-supported tier last quarter, the company seems to be warming up its advertisers for a big 2025.

Brace for Price Hikes

To keep the momentum going, Netflix is bumping prices. The standard plan now costs $17.99/month (up $2.50), while the ad-supported plan climbs to $7.99. Sure, it’s a hit to wallets, but Netflix says it’ll reinvest the extra cash into more of what you love—think Stranger Things, Wednesday, and big-budget films like Knives Out 3.

Revenue for Q4 hit $10.25 billion, up 16% year-over-year, while profits soared 52% to $1.87 billion. Shares jumped 13% after hours as investors celebrated the strong finish. Oh, and this was Netflix’s final quarterly subscriber report—it’ll now update us on viewer engagement twice a year.

What’s Next?

With a 2025 lineup packed with heavy hitters and more live events in the works, Netflix is doubling down on what works. Add in its expanding ad business and price hikes, and the streaming giant looks ready to flex its dominance for another year.

NEWS
Market Movements

AI
Trump to Announce New AI Investment Push With OpenAI, Softbank, Oracle

President Trump is wasting no time making waves in his second term. Teaming up with OpenAI, SoftBank, and Oracle, Trump announced a colossal joint venture—Stargate—aimed at building the U.S.’s AI infrastructure. The initial $100 billion commitment could balloon to $500 billion over the next four years.

Stargate’s Ambitious Blueprint

The first project? A massive data center in Texas, already breaking ground. Oracle is doubling its data center investments this fiscal year, while SoftBank’s Masayoshi Son and OpenAI’s Sam Altman are betting big on America’s AI dominance. Altman, who has long advocated for AI infrastructure as a national priority, called this venture “a golden opportunity.”

With China making rapid AI advancements, this is about more than innovation—it’s about maintaining global leadership. Trump has emphasized energy independence to power these data centers, linking AI to his broader pro-growth agenda. For Oracle and SoftBank, the move also signals a strategic pivot to capitalize on the exploding demand for AI resources.

A History of High Hopes

This isn’t the first mega-deal Trump has backed. Past ventures like SoftBank’s 2016 investment pledge and Foxconn’s Wisconsin facility had mixed results. Critics warn Stargate could follow suit, but industry insiders remain optimistic given the players involved and the rising urgency for AI infrastructure.

The Bottom Line: Trump’s AI push is a bold gambit at a pivotal time for tech. With Oracle, SoftBank, and OpenAI pooling resources, the U.S. is betting big on its future as a global AI leader. For now, Texas is ground zero for what could be the start of an AI revolution—or another case of overpromised returns.

Calendar
On The Horizon

Tomorrow

Tomorrow, the US Leading Indicators report is set to drop, combining data from multiple sources like the Labor Department and Census Bureau to offer a forward-looking view of the economy. Unlike most reports that focus on past performance, this one aims to forecast potential shifts, giving investors a heads-up on possible trends or disruptions ahead.

On the earnings front, it’s a packed day with major players like Johnson & Johnson ($JNJ), Procter & Gamble ($PG), Abbott Laboratories ($ABT), and Halliburton ($HAL) all reporting. Among the long list of updates, two key earnings reports stand out and are worth closer attention.

Before Market Open:

  • Travelers Companies often flies under the radar during earnings season, but this time, all eyes are on the insurer after the devastating LA wildfires. Investors are eager to see how much the company will have to shell out for claims, though its solid financial standing should cushion the blow. Analysts expect $6.26 EPS on $11.04 billion in revenue. ($TRV)

After Market Close:

  • After the bell, Discover Financial Services will take the stage as it moves closer to closing its massive $35.3 billion acquisition of Capital One. The deal, once seen as a regulatory long shot, now seems more feasible under the new Trump administration. Investors will be listening for updates on the acquisition and how Discover plans to stay ahead of rising fintech rivals like Affirm Holdings. Consensus stands at $3.26 EPS on $4.39 billion in revenue. ($DFS)

NEWS
The Daily Rundown

  • 🚀 Trump Sworn In as 47th President, Issues Dozens of Orders: Donald Trump was sworn in as the 47th president of the US yesterday and wasted no time taking action. He issued dozens of executive orders targeting immigration, energy, and trade. Notable moves include a national emergency at the US–Mexico border, re-withdrawing from the Paris climate agreement, and ordering a trade review with Canada, Mexico, and China. Markets are bracing for potential 25% tariffs on Canada and Mexico starting February 1. DOGE, a new government efficiency task force, was also launched but faced immediate lawsuits.

  • 📈 Tech Leaders Take Center Stage at Inauguration: Tech giants Sundar Pichai, Elon Musk, Tim Cook, Jeff Bezos, Mark Zuckerberg, and Sam Altman made notable appearances at Trump’s inauguration, sitting closer than some cabinet members. With $12 trillion in market cap among their companies, the cozy relationship between Trump and Big Tech raised eyebrows. TikTok’s CEO Shou Zi Chew’s attendance was surprising, given the recent federal ban and subsequent temporary delay ordered by Trump.

  • 🛡 Biden Pardons Public Servants Before Leaving Office: Before leaving office, Joe Biden issued preemptive pardons for Dr. Fauci, Gen. Mark Milley, and members of the Jan. 6 Committee to protect them from Trump-led prosecutions. Biden clarified that these pardons were not admissions of wrongdoing but measures to safeguard public servants.

  • 🏆 Ohio State Wins National Championship: The Ohio State Buckeyes defeated the Notre Dame Fighting Irish 34-23 to claim their ninth College Football Playoff National Championship and first since 2014. Ohio State dominated early, building a 31-7 lead through the third quarter before Notre Dame rallied late. The victory capped an impressive playoff run for the No. 8 seed, which upset higher-ranked teams like Oregon and Texas. With as many as 16 seniors projected for the NFL draft, the Buckeyes’ championship is a testament to their veteran roster.

  • 🥶 Arctic Blast Grips the US: A massive Arctic blast is delivering the coldest temperatures of the winter season across the US, with nearly 300 million Americans experiencing below-average conditions. Wind chills as low as minus 55 degrees and temperatures 45 degrees below normal are expected. States from Texas to Florida are also bracing for a rare winter storm, with up to 10 inches of snow possible in typically mild regions. The extreme cold is caused by a polar vortex shift bringing Arctic air southward.

  • 💰 Bitcoin Surges to All-Time High on Trump Meme Coins: Bitcoin surged to an all-time high of $109,350.72 (currently $106K) after Donald and Melania Trump launched $TRUMP and $MELANIA meme coins. The cryptocurrency market saw unprecedented trading volumes before Bitcoin corrected, illustrating the speculative frenzy.

  • 🎥 Moana 2 Becomes a Billion-Dollar Blockbuster: Disney’s Moana 2 crossed $1 billion globally, becoming its third billion-dollar hit in 2024. The film's success highlights Disney's animation dominance with its compelling storytelling and visual excellence.

  • 👀 Cecile Richards Passes Away at 67: Cecile Richards, former president of Planned Parenthood, passed away at 67. Known for her groundbreaking work in reproductive rights and gender equality, Richards leaves behind a legacy of activism and progress.

  • 🚦 Costco Workers Could Strike Amid Labor Dispute: Nearly 20,000 Costco employees could strike by January 31, 2025, if labor talks fail. The Teamsters union demands higher wages, better pensions, and job protections. With an 85% strike authorization vote, tensions are high as negotiations continue.

RESOURCES
The Federal Reserve Resource

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