Apple Gets Hacked, Trump in China & Sticky Inflation

17:05Austin Hankwitz:Yeah. On my side for your portfolio, I think the most important thing for everyone to understand is that Wors said he wants to reduce forward guidance. So what does that mean? He wants to have less handholding from the Fed, less dot plots, less pre-announcing every move. Because remember, for the past 14 years, the markets have had this safety net knowing what the Fed's every move would be next so they can plan ahead. And if that disappears, every economic data point becomes a volatility event. CPI day, jobs day, PPI day, all of these will become much bigger market movers because people won't have already baked in and understood where the Fed was going so they could plan ahead.

17:49Austin Hankwitz:So it's going to be a lot of handholding to get people not to have those knee-jerk reactions we talk about all the time if this happens.

17:56Robert Croak:Yeah, here's my take, Robert. I truly believe that as long as the Fed is not cutting interest rates and even flirting with rate hikes, the only thing that will drive these markets higher are earnings. We saw really good Q1 earnings come in. That's why the markets have rallied so strong since March 30th or so. We saw incredible earnings come in, incredible beats across the board, earnings revision, upward revisions came in for Q2 and for the rest of 2026 and even into 2027. So Wall Street is very optimistic about the profits inside the S &P 500. If the S &P 500, these companies, the underlying constituents can continue to deliver these above expectation profits, AI continues to drive revenue and operating margin expansion, capital efficiency, all these things that we've been promised with this AI revolution for years now.

18:54Robert Croak:If that can actually happen in 2026 and in 2027, then the markets will go higher. but if q1 was a fluke if the guidance that these companies gave us during this first quarter doesn't hold true and maybe earnings per share is lower than expected in q2 or q3 or q4 there's not much of a cushion to keep the markets excited because remember as we entered this year robert the fed was supposed to cut rates by three times we've heard the phrase do not fight the fed as the fed cuts interest rates, that's good for the stock market. That means lower borrowing costs. That means the market likes that. You think about the weighted average cost of capital with how to value companies.

19:38Robert Croak:It's a good thing when the Fed is cutting interest rates. Just like when we saw the Fed raise interest rates in 2022, the markets did not like that. They came down dramatically. So when we have now an environment where, well, maybe the Fed's not going to cut rates like we expected. You go to Polymarket right now, you'll see that the number one outcome most expected on Polymarket for rate cuts in 2026 is zero. At a 70 % chance of zero rate cuts in 2026, that was a 2 % chance just five or six months ago. And so if the Fed interest rate cuts does not exist, then the only thing that's going to push these markets higher are earnings.

20:17Robert Croak:So it's never been more important to have deep conviction into the companies, the single stocks, whatever that you are invested into, if you are not investing in index funds and ETFs and say, hey, I want to roll the dice on ABC company, you better feel really good about their ability and that management team's guidance and what's trending and what's that secular growth trend that they're operating in that's going to send that stock price higher as it correlates to higher earnings in the future.

20:42Austin Hankwitz:That was incredible. I feel like we should pause the internet for a couple days just to let that sink in. That was, wow, incredible. All right, let's jump into our radar points. I've got three good ones, you've got three good ones, and let's rock and roll. So GLP-1 drugs are reshaping the restaurant industry. I said it. More than 12 % of Americans are now taking weight loss drugs like Ozempic and Zipbound, up from 6 % in early 2024. And J.P. Morgan estimates that more than 30 million users by 2030, once the pill forms are launched and it scale and everyone's using them. So a Cornell study also said 150 ,000 households found that GLP-1 users cut spending at fast food chains, coffee shops, and quick service restaurants by 8 % within six months of starting the drugs.

21:35Austin Hankwitz:And when they go out to eat, they're ordering smaller portions and skipping alcohol. So fast casual brands like Chipotle and Sweetgreen appear to be the big winners right now because users are trading in those big greasy meals at McDonald's or wherever for more customizable bowls and clear calorie counts. So there's a lot of math to be done there because if you think about it, if an average couple or family is on these GLP-1s and they're cutting down of how much they eat because it curbs your appetite, that could be a way for them to really kind of get back in line with their budget. because let's say they have a copay and it costs each person in the family $25 to$50 for the GLP-1s, but they save a couple hundred dollars a month in food, could be a really cool way to kind of help get healthier and get back on track financially.

22:27Austin Hankwitz:My second radar point today is everyone saw Cerebris just went public this week. And Cerebris, I called this out, I was watching the IPO. They make a wafer scale engine. This is a single silicon chip the size of a children's picture book packed with 4 trillion, trillion with a T, transistors. And it's designed specifically for fast AI inference. The company landed a$10 billion deal to supply OpenAI with computing capacity in January, followed by a multi-year AWS partnership in March, though some analysts warn the customer concentration is at risk. The bigger picture here is Cerebus is just the opening act as OpenAI and Anthropic are both eyeing second half IPOs and SpaceX is targeting June IPO at a$1.25 trillion plus valuation.

23:22Austin Hankwitz:So after a two year drought in tech IPOs, the floodgates are definitely opening. And my third point today, and this one's a little bit more fun and not as serious, but interesting. I learned a lot from this, and that is Jack Daniels, Maker Brown foreman, just rejected a$15 billion takeover bid from, get this, Buffalo Trace owner Sazerac. I didn't even know they were that big. I thought Jack Daniels was way bigger, but here we are. And Sazerac offered$32 per share in an all-cash deal backed by Wells Fargo and Apollo Global Management. But the Brown family, which controls a majority of the company's voting stock, turned it down on Monday.

24:01Austin Hankwitz:The rejection comes weeks after Brown-Forman's separate merger talks with Absolute Vodka also fell apart over deal structure and economics. So crazy things happening. If you don't know, Brown-Forman and Sazerac are Louisville-based, and they're huge. They own Jack Daniels, Woodford Reserve, and a bunch of other brands. So this will be interesting to keep an eye on and see if there's an investment opportunity in there.

24:25Robert Croak:I think the first story you had about the GLP-1s and the restaurants is the most interesting to me. And I'm actually going to push back on the idea that the Chipotles and Sweet Greens of the world are benefiting. I thought that the Chipotles and the Sweet Greens of the world would benefit as people who were overweight are, you know, sort of flocking to those restaurants and locations for easy ways to track their macros and eat healthy food. But when instead you introduce this like appetite suppressant that is a GLP-1, they're just not eating anywhere in general. Right. So I wonder if I just like it's so interesting to think about how if literally 30 million Americans are going to be on these GLP-1s.

25:08Robert Croak:I even saw, Robert, this is crazy. I swear this was a story and I'm not making this up. But I saw that this quarter when the airline companies were talking about their earnings and their profits and their jet fuel usage, they used a materially less amount of jet fuel because Americans are now like, you know, lighter because so many Americans are on these GLP-1s and they're flying. they're 15, 20, 30 pounds lighter. So these airlines are using less jet fuel than they were 5, 10, 15 years ago when Americans were just like normal and didn't have GLP-1s. Like this stuff is so interesting and it's impacting so many different industries that I can't even begin to comprehend.

25:53Robert Croak:But I want to encourage people, you know, this isn't an ad, but like go to your generated assets on public and just type in like, what are the biggest beneficiaries of GLP one usage? Like, or, you know, is it take the story and share it with your clod or your Gemini and ask it like, what restaurant should I avoid? What restaurant should be cool? What other industries are we not thinking about and not looking into? Like the airline one went right over my head. I was never even thinking about that.

26:19Austin Hankwitz:Yeah. I read earlier too, that obesity rates are down like something like 8 % to 10 % in the U.S. from 39.9 % like two years ago. So it is interesting to look at it from that perspective. And thank you for sharing that story because I feel like there's a picks and shovels play in there somewhere for our listeners for us to figure out, okay, people are lighter. What does that mean? Does that mean clothing stores are going to do well because everyone's going back and buying all new clothes? Does that mean there's going to be a retail push. So there's a lot of ways to look at this GLP-1 aspect, especially as pills are announced, because a lot of people probably haven't tried GLP-1s yet because they have to give themselves a shot.

27:00Austin Hankwitz:A lot of people can't do that. But with PillForm, I think it's going to change the game in obesity and also the GLP-1 sector and the growth.

27:09Robert Croak:Well, Robert, before we jump to my part here, we've officially entered the second quarter of 2026. And with what's going on with inflation, the Fed, Kevin Warsh, Trump's in China. You know, uncertainties never felt so high. Major indices have been all over the place. We saw this crazy uptrend since the lows of March 30th, and now we're seeing a little bit of back and forth. The Fed has flip-flopped those rate cut assumptions. Again, inflation, it's weirdly sticky, the PPI, we're all over the place.

27:37Austin Hankwitz:Which is why it's never been more important to have a plan and stick to it. And if you're a long-term investor like us, that plan has never been easier to come up with and implement dollar cost average and ride the wave.

27:50Robert Croak:We've been talking about how important it is to dollar cost average into the index funds and ETFs we talk about for years now. And if you've done that, you've made a ton of money along the way, like everyone else in the markets. And when the markets feel shaky and you don't really see your progress, it's never been more important to be a part of a social platform like Blossom Social so you can see that entire portfolio, your holdings, your performance, your dividends, all of it in a very clean way.

28:17Austin Hankwitz:You're also able to follow other long-term investors on the platform, helping you stay motivated during uncertain times. Not to mention the portfolios on Blossom are all verified. So if you're seeing someone buy or sell a name, it's because they actually did it in their own brokerage account.

28:32Robert Croak:We're both on Blossom. Our portfolios are on Blossom. So if you want to join us, search Blossom Social in the App Store, head over to BlossomSocial.com on your phone or desktop, link in the show notes below. And they also have like an AI chatbot that you can talk to and ask it questions about your portfolio, performance, the beta, the dividends, like it's really, really cool. So again, go check out Blossom. So Robert, let's now jump to my radar points for this week. I've got three here. The first one being Klarna, the second one being how we've seen some crazy layoffs because of AI. And my third story, of course, is going to be about Apple's computer software getting hacked.

29:12Robert Croak:So we'll start with Klarna. The buy now, pay later giant posted its first quarterly profit of$1 million versus a $100 million loss last year on revenue, Robert, that get this, jumped by 44%. Now the story here is that Klarna is pivoting into fair financing, a longer-term installment loan product for those big-ticket purchases that more than doubled their gross merchandise volume in less than 12 months. Their CEO even said it took meaningful market share in the U.S. Total GMV across the platform rose by 33%. Active customers hit almost 120 million. Merchant network climbed by 50 % to over a million partners.

29:59Robert Croak:It is really, really cool. So buy now, pay later isn't just splitting $50 orders or your Coachella tickets into four payments anymore. Klarna is now evolving into a full consumer lending platform. So those big ticket products you want are much more affordable now. Speaking of tech platforms, let's talk about how AI is reshaping the American workforce faster than the headlines are suggesting. So layoffs in the first four months of 2026 totaled 300 ,749, with tech companies alone shedding 85 ,000 jobs, 33 % increase over the same period last year. The list reads like a who's who's of corporate America, Amazon cut 30 ,000, Oracle, 30 ,000.

30:49Robert Croak:UPS, another 30 ,000. Meta cut 9 ,500 across two different rounds. Estee Lauder cut up to 10 ,000. Block eliminated 40 % of their workforce. But the pattern here, Robert, is consistent. Companies aren't just trimming fat, they're eliminating entire layers of management and replacing human workflows with artificial intelligence. Coinbase axed their pure managers. PayPal planning to cut 20 % of their workforce over the next three years. So here's the important takeaway, though, that I kind of keep coming back to, which is these companies that are doing these layoffs are also having record revenues, which proves that artificial intelligence not just is augmenting and helping the existing employees be more efficient, but we're starting to see actual salary and payroll money get moved away and instead now gets spent with the clods and the open AIs and the Geminis of the world.

31:44Robert Croak:Like it's not just like, oh, the extra little budget here for AI. It's I'm now not going to hire 10 people. I'm going to go put that into token spend on clod. Very interesting trend to keep an eye on. Now this last one, speaking of clod and anthropic. Researchers at a Palo Alto-based company used Anthropic's Mythos AI to help build an exploit that bypassed Apple's memory integrity enforcement, a security technology Apple spent half a decade engineering by chaining together two bugs and corrupting the Mac's memory to gain access to part of the device that should be inaccessible. The researchers drove to Apple's headquarters in person to hand deliver a 55-page report.

32:29Robert Croak:Earlier this year, Anthropik's AI mythos found over 100 high-severity vulnerabilities in Firefox in just two weeks' time, a pace that takes the rest of the world two months. The implications are serious enough that the White House is now considering its hands-off approach to AI development in contemplating an executive order granting government oversight of the most advanced models. AI is not just writing code and generating images anymore. It is finding security holes faster than humans can patch them. And the gap between discovery speed and fixed speed is becoming a genuine national security concern.

33:10Robert Croak:I think I saw someone, and they didn't mean it like this. They've since like gone back and kind of, you know, corrected themselves, but it's still an interesting way they phrased it. I forget who the specific person was, you know, in the White House or in this administration, but they said that we need to create some sort of FDA approval for these, you know, these models, these advanced models. Because what if Anthropic and Anthropic did the right thing? They said, hey, mythos is legit. And if it's in the wrong hands, people can just be screwed. So we are going to give this to the right cybercrime enforcers.

33:45Robert Croak:We're going to give this to the White House. We're going to give this to the right people so we can ensure that, you know, Apple's computers are secure. But what if they didn't? Right. What if there's a I'm not going to say Chinese, but what if there's some other model out there that's just as good as mythos that we don't know about that might be working on hacking all of your online stuff, Robert, or something with the banks or something with the coin bases of the world? I mean, brokerage, like, I don't know, this stuff is getting really crazy. And I'm not in favor of the government having oversight on like, you know, private companies releasing products like models, I think less government is good.

34:20Robert Croak:But I am in favor of companies having the foresight to understand that what they've built can be very dangerous if they do not take it seriously, and hand it over to the right entities that are going to help ensure that once this does become readily available and open, source 6, 9, 12, 18 months into the future, the world and the cyber world are ready.

34:44Austin Hankwitz:Yeah, I agree with you. I don't think the government should have the oversight, but I think some third party formed entity should have the oversight to make sure everyone goes through a very robust launch strategy to protect all the largest companies and banking industry and everything else. So I do think that's important. But my biggest takeaway from your radar points today is when you think about all these layoffs, there's still conversely all of these other headlines that are really cool. I talked about one in the Rich Habits Network the other night that right now, the Trades Commission said there are 80 ,000 welder shortage of labor per year for the next four or five years.

35:27Austin Hankwitz:So 80 ,000 jobs are out there for welders right now making good money. And also I wanted to touch on, I stopped one of the CEOs of one of the largest development companies in my building. They're in the Tampa Bay area construction company. I said, what is the number one trade you're short on the most? I was really shocked because I thought it was going to be plumbing or electrical. It was drywall. He said, we are having to fly people in and hire companies from out of state and house them to keep our projects moving. So So don't let that headline of all these layoffs be gloom and doom because there are jobs everywhere.

36:04Austin Hankwitz:You just might have to get your hands dirty.

36:07Robert Croak:Everybody, thank you so much for joining us on this week's episode of the Rich Habits Radar. Of course, always talking about the biggest headlines impacting you and your money. Be sure to join us inside the Rich Habits Network if you want more FaceTime with Robert and myself. We host our Tuesday night live streams for two hours. They're so much fun. That's what Robert's just alluding to here. You also get your questions answered. You get to DM us. You get to post. You get to connect with other people. There's nearly a thousand people now inside the Rich Habits Network, and we're so, so grateful.

36:36Robert Croak:As always, if you learned something from this episode, consider sharing it with a friend, subscribing to us on Spotify, leaving us a five-star review, voting in the poll below, leaving us a comment on Spotify. We reply to every single comment on Spotify. Not even joking. Try and test it. We'll reply to it. We love you guys. We appreciate you all and we'll see you on Monday.

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