Market Skepticism Emerges Amidst Inflation Data, AI Investment, and IPOs

Key Quotes

"November inflation data dropped yesterday and uh what the heck was that Annual CPI fell to 2.7 year over year down from the 3 it's been running at and way lower than the 3.1 economists expected on the surface woohoo some relief for consumers and the lowest inflation print in months but hold those horses cowboys and cowgirls broad skepticism emerged across Wall Street and amongst economists who think that this isn't the slam dunk report it initially appears."

The hosts express skepticism regarding the November inflation report, noting that while the annual CPI fell to 2.7%, economists and Wall Street professionals are hesitant to accept it as a definitive positive sign. This skepticism stems from concerns that the data collection process may have been compromised due to a prior government shutdown.

"The nitpicking is inspired by the fact that the data comes after a 43 day federal government shutdown in which BLS workers were furloughed meaning November data collection started quite late since the CPI relies heavily on in-person price collections the shutdown severely limited that process."

The hosts explain that a primary reason for the skepticism surrounding the November inflation data is the timing of its collection. A lengthy federal government shutdown led to furloughed Bureau of Labor Statistics workers, meaning that crucial in-person price data collection for the Consumer Price Index (CPI) was significantly delayed and limited.

"The government shutdown delayed the release of the November report and it also just canceled the October CPI report altogether so that means November's data didn't have a previous month to be compared to remember we are looking for what inflation is doing relative to other months and other years so if you take away you know that base comparison things get a little bit wonky."

The hosts highlight that the government shutdown not only delayed the November inflation report but also resulted in the cancellation of the October report. This absence of a prior month's data for comparison makes the November figures "wonky" and less reliable for understanding inflation trends.

"The shelter data was what economists did pinpoint as the biggest red flag here because they basically zeroed out shelter for October because they couldn't collect it so they basically said there was no inflation in rents at all in October and therefore there was just no growth on shelter costs at all from September through November."

The hosts identify the shelter cost data as the most significant red flag in the inflation report. Economists are particularly concerned because shelter inflation was effectively recorded as zero for October due to collection issues, leading to an artificial suppression of overall inflation figures from September through November.

"Trump media isn't going to leverage its social media know-how to help T.A.E. build reactors; it will use its uncanny ability to sell stock to help T.A.E. fund its ambitious fusion plans because if Trump media is good at one thing it's attracting capital despite doing just $4 million in revenue a year its market value is over $4 billion and it paid its CEO almost $47 million in 2024 because of the Trump name apparently people are happy to throw money at this company."

The hosts explain the strategic rationale behind Trump Media's merger with a nuclear fusion company, T.A.E. They argue that Trump Media's value lies not in its social media expertise but in its demonstrated ability to attract significant capital, even with minimal revenue, which will be used to fund T.A.E.'s fusion technology development.

"Fusion is what it sounds like you're smashing atoms together usually hydrogen atoms together and this process produces far more energy than fission which involves splitting atoms apart it also when you're doing fission it ends up producing radioactive waste which is a headache to deal with obviously it also can lead to reactor meltdowns fusion on the other hand can't run out of control because if it runs out of energy the reaction just stops it just peters out so it's thought to be a lot more safe."

The hosts clarify the fundamental difference between nuclear fusion and fission. They explain that fusion involves combining atoms to release energy, producing less waste and being inherently safer than fission, which splits atoms and carries risks of radioactive waste and meltdowns.

"Shares of the tech giant fell 8% this week extending a month's long slump that has investors seriously worried about the company's balance sheet and the health of the AI sector more broadly."

The hosts highlight Oracle's significant stock decline, noting that an 8% drop this week extends a longer slump. This performance is causing investor concern not only about Oracle's financial health but also about the broader implications for the artificial intelligence sector.

"A growing number of Wall Street experts see Oracle's shakiness as a canary in the coal mine for the AI trade overall it's taking on high amounts of debt to build AI infrastructure but has little to show for return on those investments the worry is that Oracle's problems will become everyone's problem given that AI has been the primary engine of economic growth and the stock market this year."

The hosts suggest that Oracle's struggles are being viewed by Wall Street as an early warning sign for the entire AI industry. They explain that the concern is that companies are incurring substantial debt for AI infrastructure without clear returns, and Oracle's difficulties could signal wider issues for an AI-driven market.

"TikTok finally signed a deal to spin off its US operations into a new joint venture according to a memo from TikTok's CEO Shou Chew he sent to employees yesterday this comes after a year's long saga that culminated in a law passed in 2024 that required TikTok to divest its US operations or face a ban in the US."

The hosts report that TikTok has reached an agreement to spin off its U.S. operations into a new joint venture, as announced by CEO Shou Chew. This development follows a protracted period of uncertainty stemming from a U.S. law mandating divestiture or a potential ban of TikTok's U.S. operations.

"Analysts are trying to wrap their head around what's going on here and it the answer may be that this is just not really a business deal it is a political deal the Trump administration forced TikTok bytedance TikTok's owner bytedance to make this deal happen and therefore had to sell it at a much lower value than it would it should be valued at which according to that put into chat gpt tiktok should be should be valued at around 100 billion and this new entity i think it's worth stressing this new American owned entity will not actually own the underlying algorithm that tech that powers TikTok."

The hosts suggest that the TikTok deal is more of a political maneuver than a standard business transaction. They argue that the Trump administration pressured ByteDance, TikTok's owner, into this deal, resulting in a valuation significantly lower than its potential market worth, and importantly, the new U.S. entity will not own TikTok's core algorithm.

"Chipotle announced it will start selling meat in a cup beginning later this month the 4 ounce portion of adobo chicken or steak with nothing else in a cup is part of a wider high protein menu that includes two high protein bowls