Jonathan Kitchen
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Diners face egg surcharges as bird flu hits supply. (0:15) Estee Lauder plunges. (2:19) No more Super Bowl bets on Robinhood. (3:45)
This is an abridged transcript of the podcast.
Our top story so far. Egg prices continue to soar to unprecedented levels. The average cost of a dozen Grade A large eggs was $4.15 in December, according to the Bureau of Labor Statistics, but much higher prices are being reported in certain cities, particularly on the East Coast and West Coast.
Waffle House has added a temporary surcharge of $0.50 per egg at its 2,100-or-so locations due to the elevated egg prices.
“Consumers and restaurants are being forced to make difficult decisions,” the company said.
By far, the most significant factor driving up egg prices is the ongoing outbreak of highly pathogenic avian influenza, also known as bird flu. This deadly strain of H5N1 has led to the culling of millions of chickens since 2022, severely impacting the egg supply chain. As of January 2025, more than 134 million birds have been affected in the United States, which has thrown the supply and demand balance out of whack.
The latest guidance from the USDA was that egg prices are likely to push even higher in 2025.
On the economic front, U.S. job openings fell to 7.6 million in December, lower than the 8 million consensus and down from 8.156 million in November (revised from 8.096 million). according to Bureau of Labor Statistics data released on Tuesday. The quits and hiring rates stayed steady.
Raymond James Chief Economist Eugenio Aleman says, “Today’s report is yet another indication that labor demand is softening but not collapsing, which is consistent with our view of a slowing economy and job market.”
Also in the economic sphere, the results are in for our Seeking Alpha Sentiment poll on U.S. tariff policy.
More than three-quarters of the nearly 5,000 respondents do not support the new tariffs on Canada, Mexico, and China.
When asked about the outcome of tariffs, 45.6% of those polled said the most impactful outcome would be to reignite inflation and consumer prices, while 21.9% said it would be to upend trade and diplomatic relations.
Among active stocks, Estée Lauder (EL) is the weakest stock in the S&P after the company’s downbeat outlook into the current fiscal quarter, along with plans to revive the business through job cuts as part of a strategic plan, overshadowed results that were not as bad as Wall Street expected.
The company withheld 2025 guidance, saying that given “challenges in the company’s Asia travel retail business, subdued consumer sentiment in China and Korea, and evolving global geopolitical uncertainty, the company anticipates continued volatility and low visibility in the near term.”
PepsiCo (PEP) struggled after posting a mixed Q4 earnings report. Organic revenue was up 2.1% for the quarter, falling slightly short of the consensus expectation of +2.2%. Organic revenue was down 2% for the Frito-Lay North America and Quaker Foods North America businesses.
Operating profit fell for the Frito-Lay North America, PepsiCo Beverages North America, and Latin America businesses.
Merck (MRK) fell after the pharma giant issued an outlook for the year that fell short of Wall Street estimates and said it is temporarily pausing shipments of its HPV vaccine Gardasil to China from February through at least mid-year.
The company guided worldwide sales in the range of $64.1 billion to $65.6 billion for 2025 vs. consensus estimates of $67.36 billion. Adjusted earnings per share is expected to be between $8.88 and $9.03 vs $9.23 consensus.
In other news of note, Robinhood Markets (HOOD) suspended the rollout of the Pro Football Championship market after a formal request by the U.S. Commodity Futures Trading Commission not to give customers access to sports event contracts.
Robinhood said the Super Bowl product, launched Monday, has already been introduced to about 1% of its customers. Customers who already placed bets in the contracts will get the option to close their position.
“We are disappointed by this outcome, especially given that we had been in regular communication with the CFTC about our intent and plans to offer this product,” the company said, noting its derivatives unit will continue to work with the CFTC as “a more comprehensive event contracts platform” is set for launch later in the year.
And in the Wall Street Research Corner, Barclays is out with its list of most bullish and bearish ETFs ranked by sentiment.
Industrials are currently getting the most love, but that “may be exaggerated by the renormalization from disruptions due to hurricanes and the recent Boeing (BA) strike,” says Stefano Pascale, head of equity derivatives strategy. Precious metal ETFs are getting shunned.
The top five ETFs ranked by sentiment are the Industrial Select Sector SPDR Fund ETF (XLI), the iShares TIPS Bond ETF (TIP), the Invesco Senior Loan ETF (BKLN), the SPDR S&P Metals and Mining ETF (XME), and the Health Care Select Sector SPDR Fund ETF (XLV).
The five most bearish ETFs are the VanEck Gold Miners ETF (GDX), the SPDR Gold Shares ETF (GLD), the iShares Silver Trust ETF (SLV), the VanEck Junior Gold Miners ETF (GDXJ), and the iShares Semiconductor ETF (SOXX).
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