Tariffs, Cans, and Coca-Cola’s Plastic Pivot

One unexpected side effect of President Trump’s tariffs on steel and aluminum could be fewer actual cans hitting the shelves, as rising costs push production down. But no need to worry if you’re a Coca-Cola fan—the company is ready to pivot, planning to increase its use of plastic bottles instead.

Meanwhile, a surprising inflation report sparked an immediate sell-off in the stock market. However, the major indexes staged a comeback, with most of the losses being erased. The S&P 500 closed down 0.3%, the Nasdaq 100 gained 0.1%, and the Russell 2000 underperformed with a 0.9% dip. For a deeper dive into how the CPI report is shaping the market, check out our main story for more insight.

The Market Got Egged, Then Pulled Itself Together

Yesterday, stocks took a tumble, with many indexes experiencing a sharp drop mid-morning before managing to claw back most of the losses by the end of the day. What triggered the initial dip? The dawning realization that rate cuts aren’t coming anytime soon. And what set that off? A higher-than-expected CPI report. The ultimate culprit? Eggs, primarily.

Even crypto wasn’t spared from the egg-induced panic. Bitcoin took a nosedive after the inflation data dropped, reigniting the age-old debate of whether it’s an inflation hedge. The conversation seemed to distract traders long enough for the price to stabilize, landing back where it was before the report hit.

So, what did the CPI report really mean for investors?

• The Egg Shock: The price of eggs has surged by 53% year-over-year. That’s a tough pill to swallow, and it’s likely to ripple through the costs of raw materials in the grocery and food service industries.
• Disinflation Is (Probably) Over: After a period of slowing inflation starting in mid-2022, the recent inflation spike signals that the disinflation trend is likely done for now.
• Inflationary Policies: Some White House-backed policies—like tariffs—were expected to ride on a bit of inflation wiggle room. With the CPI bump, that’s looking less likely.

The Bottom Line

Inflation continues to rattle investors, and the impact is evident. Whether this is a temporary blip or the start of a longer trend, it’s clear that the Fed won’t be touching interest rates anytime soon—expect September at the earliest.

Has the Gig Economy Finally Turned the Corner?

The ongoing chatter around the "private burrito taxi" economy resurfaces every few months—often sparked by boredom on X—leading many to believe that companies delivering our overpriced but oh-so-convenient goods must be raking in huge profits. In reality, these companies have been running deep in the red for years. But could that finally be changing?

After enduring massive losses since going public in 2020, DoorDash has just reported a $123 million net income for 2024. However, after accounting for the cut taken by restaurants, drivers, and stores, the company still ended the year with a $38 million operating loss. Even in Q4, when DoorDash managed to turn a small operating profit, it was a modest 4% of total revenue. So, who—or what—is nibbling away at those profits? A handy Sankey diagram explains the breakdown.

On a more positive note, Lyft, one of the pioneers of the rideshare industry, has reported its first-ever profitable year, with a $23 million profit. Next up is Instacart, which has been on a roll, posting three consecutive profitable quarters in 2024. With Q4 earnings set for release on February 25, analysts are optimistic about the grocery delivery service’s prospects.

The Takeaway

After years of grappling with high debt and operational costs, the gig economy might finally be reaping the rewards. The strategy for these companies has been to power through the red, sometimes offering hefty discounts to attract users, until their platforms became so ingrained in daily life that revenue would eventually catch up. Uber had its first profitable year in 2023, as did Airbnb. Altogether, consumers spent over $250 billion on Uber, Lyft, and DoorDash in 2024. Looks like the gig economy’s hard work is finally starting to pay off.

What else we're munching on:

• CVS Surges After Strong Earnings Report CVS delivered a stellar earnings report, surpassing Wall Street’s expectations for both earnings per share and revenue. The strong performance sent the stock soaring, ending the day with a 15% gain.

• Alibaba Teams Up with Apple, Stock Jumps Alibaba saw its stock rise nearly 5% following news of a partnership with Apple to develop advanced AI features. The move has investors excited about the potential for innovation.

• Arista Takes a Hit Arista Networks, the California-based computer networking firm, was one of the day’s biggest losers, dropping over 6%.

• Five Years Post-Covid: Americans Feel the Divide As we hit the five-year mark since the Covid pandemic, most Americans feel the nation has become more divided. The lasting impact of the crisis continues to shape public sentiment.

• Monty Wins Best in Show at Westminster Dog Show Monty, the giant schnauzer, took home the coveted Best in Show title at the Westminster Dog Show on Tuesday. But let’s be real—our favorite part was all the adorable photos of the competitors!

• Private School Tuition Hits Record High Private school tuition has reached an all-time high, with day schools now averaging $50,000 per year. It’s a steep price for families, reflecting rising education costs across the board.

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¹ Mode Mobile recently received their ticker reservation with Nasdaq ($MODE), indicating an intent to IPO in the next 24 months. An intent to IPO is no guarantee that an actual IPO will occur.

² December 23, 2024 will be the last day to invest and be considered a shareholder in 2024. Any investments made after this date will only be considered shareholders starting in 2025.

³ Please read the offering circular and related risk at invest.modemobile.com. This is a paid advertisement for Mode Mobile’s Regulation A+ Offering.