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Happy Tuesday, !

This week’s world-famous news haiku competition™ is about the splendid Winter Olympics, which are now in session. Send me your entry — to our spiffy new email address, haiku at cheddar dot com — by noon ET Thursday, for consideration by your Cheddar peers!

And now for something completely different, and yet somehow exactly the same.

Matt Davis — Need2Know Chedditor

News You Need2Know

• Stocks' sharp rebound makes investors more nervous

• Novo Nordisk sues Hims over copycat Wegovy

• Eddie Bauer files for Chapter 11 as retail pressur …

• Washington Post publisher exits after mass layoffs

• OpenAI claims momentum as rival pressure mounts

• Poll of the day: Lols

• Poll results: You’re dipping the buy

What’s the stock market up to, eh?

$SPX ( ▼ 0.21% ) $DJI ( ▲ 0.11% ) $NDX ( ▼ 0.3% )

Companies mentioned in today’s newsletter

 $AAPL ( ▼ 0.22% )  $CAT ( ▼ 0.12% )  $MMM ( ▲ 1.39% )  $SHW ( ▲ 1.3% )  $VZ ( ▲ 1.56% )  $AMZN ( ▼ 0.24% )  $GOOGL ( ▼ 1.62% )  $JPM ( ▼ 1.98% )  $NVO ( ▼ 0.02% )  $HIMS ( ▼ 8.43% )  

Stocks' sharp rebound makes investors more nervous

In an eventful week for the stock market, a significant rebound on Friday saw the Dow Jones Industrial Average surge by over 1,200 points, surpassing the 50,000 mark for the first time. However, with underlying concerns about AI investments, investors remain cautious about market volatility. Goldman Sachs $GS ( ▼ 1.02% ) , Apple $AAPL ( ▼ 0.22% ) and Caterpillar $CAT ( ▼ 0.12% ) were the stocks most responsible for the Dow’s record spurt. The biggest drags on the index were 3M $MMM ( ▲ 1.39% ) , Sherwin Williams $SHW ( ▲ 1.3% ) and Verizon $VZ ( ▲ 1.56% ) .

AI-driven disruptions had previously sent software stocks into a tailspin, impacting big tech and even the corporate bond market. Amazon's $AMZN ( ▼ 0.24% ) shares slipped 5.6% after announcing plans to invest $200 billion in AI, reducing its market value by approximately $133 billion, while Alphabet $GOOGL ( ▼ 1.62% ) shares dropped 2.5%.

"The bull market remains intact," said Angelo Kourkafas, a senior global investment strategist at Edward Jones, encouraging investors to view pullbacks as re-engagement opportunities, talking to the Wall Street Journal.

Or…

"We've got a C-minus economy supporting an A-plus stock market," said David “Quotable” Kelly, chief global strategist at J.P. Morgan Asset Management $JPM ( ▼ 1.98% ) .

Market dynamics remain unpredictable, with hedge funds reportedly reducing exposure to software stocks. Clark Bellin, CIO at Bellwether Wealth, plans to shift investments toward industrials and materials sectors, telling the Wall Street Journal, "It makes you worry about what other pockets have been driven up by almost pure speculation."

Doesn’t it, just?

Yesterday we asked N2K readers whether they’re “buying the dip.” You can see what your fellow readers had to say in today’s poll results…

Novo Nordisk sues Hims over copycat Wegovy

Tensions in the obesity drug market are, ahem, weighing heavily on the industry, as Novo Nordisk $NVO ( ▼ 0.02% ) files a lawsuit against telehealth provider Hims & Hers $HIMS ( ▼ 8.43% ) . The Danish pharmaceutical giant accuses Hims of marketing unapproved, cheaper compounded versions of its popular Wegovy obesity drug, claiming the practice violates U.S. patents and endangers patient safety.

“This is a complete sham,” said John Kuckelman, Novo’s group general counsel, pointing out the risks of compounded medicines, which are not regulated for safety and efficacy by U.S. authorities. Novo is seeking damages and a permanent injunction to block the sale of the copycat drugs.

Hims, which marketed its alternative obesity pill for as low as $49, responded fiercely, calling the lawsuit “a blatant attack by a Danish company on millions of Americans who rely on compounded medications.” The company insisted it has a “long history of providing safe access to personalized healthcare.”

Based on data analyzed from over 10,000 users, Hims & Hers told investors that customers using their personalized, compounded GLP-1 (semaglutide) weight-loss plans lost an average of 20.9 pounds, or 10.3% of their initial body weight, within six months.

Novo’s lawsuit comes after the U.S. Food and Drug Administration warned Hims about the pill and referred the company to the Department of Justice. Novo accuses Hims of “unlawful mass compounding.”

As semaglutide-based drugs like Wegovy and Eli Lilly’s Mounjaro dominate the market, Novo continues its crackdown, having filed 130 lawsuits against compounding practices in the last two years. Meanwhile, Hims’ stock fell 18% after the lawsuit announcement. Which is, like, almost as many pounds as the average user of its bargain, cheap copycat Wegovy tends to lose within six months.

Quote of the Day

Eddie Bauer files for Chapter 11 as retail pressures mount

Retail icon Eddie Bauer has filed for Chapter 11 bankruptcy, marking its third such filing in just over two decades. The operator of approximately 180 Eddie Bauer stores in the U.S. and Canada cited declining sales and mounting industry challenges as key factors behind the decision.

“This is not an easy decision,” said Marc “Easy Decision” Rosen, CEO of Catalyst Brands, which operates Eddie Bauer stores in the U.S. and Canada. “However, this restructuring is the best way to optimize value for the company’s stakeholders and also ensure Catalyst Brands remains profitable and with strong liquidity and cash flow.”

The company announced plans for a court-supervised sale process and indicated that without a sale, it will begin winding down operations in the U.S. and Canada. Eddie Bauer’s e-commerce and wholesale operations, managed by Outdoor 5, LLC, will continue unaffected.

Eddie Bauer, once a leader in outdoor gear and apparel, has lost traction to rivals such as Arc’teryx and Fjällräven (pronounced “Fee-yel-rah-ven” which means Arctic Fox in Swedish, obviously), According to Neil Saunders of GlobalData Retail, the brand’s deterioration in quality is a major issue. “For many younger shoppers, the brand is seen as somewhat old-fashioned and a bit irrelevant,” Saunders told the AP in something of a sick burn.

Song of the Day: Beck, ‘True Love Will Find You in the End’

Beck’s cover of Daniel Johnston’s "True Love Will Find You in the End" is widely considered a definitive reinterpretation of the track. It transforms the original's lo-fi, fragile atmosphere into a harmonica-laced country lament that remains sophisticated without losing its emotional core. In other words, it’s just like this newsletter.

Washington Post publisher exits after mass layoffs

Will Lewis, the now ex-publisher and CEO of The Washington Post, has abruptly resigned, ending a contentious two-year tenure. His departure comes on the heels of the publication’s decision to lay off nearly one-third of its newsroom staff — over 300 journalists — in one of the largest rounds of media layoffs in U.S. history. Lewis had faced criticism for his absence during an all-staff meeting announcing the cuts and for what many have called his overall failure to steer the organization effectively.

“After two years of transformation at The Washington Post, now is the right time for me to step aside,” Lewis wrote in an email to staff, thanking owner Jeff Bezos for his support. However, his leadership has drawn sharp criticism. Glenn Kessler, a former Post journalist, told the Guardian, “Will can put on British charm and knows how to manage up, but eventually results matter. Every initiative he launched failed, and he never found a way to boost readers for the Post.”

The union representing Post employees echoed frustrations, stating, “Will Lewis’s exit is long overdue. His legacy will be the attempted destruction of a great American journalism institution.” The union has called on Amazon founder and Post owner Jeff Bezos to rescind the layoffs or sell the paper to someone willing to invest in its future.

Jeff D’Onofrio, the Post’s CFO, has assumed the role of acting CEO and expressed optimism about navigating the challenges ahead. “I’m honored to take the helm and lead us into a sustainable, successful future with the strength of our journalism as our north star,” he said.

I think you mean the strength of your remaining journalism, Jeff?

OpenAI claims momentum as rival pressure mounts

As OpenAI faces intensifying pressure from rival Anthropic’s improved coding tools, CEO Sam Altman told OpenAI employees on Friday that ChatGPT, the company’s popular chatbot, is “back to exceeding 10% monthly growth.” OpenAI is also preparing to launch an updated Chat model this week, Altman said.

More than 800 million people use ChatGPT each week, but Google and Anthropic have been gaining ground. OpenAI declared a “code red” in December to improve ChatGPT, and temporarily sidelined several projects to focus on that effort.

Altman also said OpenAI’s coding product, Codex, grew about 50% from a week ago. Codex competes directly with Anthropic’s Claude Code, which has seen a wave of adoption over the last year, and which prompted last week’s stock market wobbles by being so good.

Anthropic took out some hostile Superbowl ads aimed at OpenAI which appear to have rattled Altman into defending his company’s territory. The commercial features a scrawny twenty-something doing pull-ups in the park, and asking a muscular bystander for advice about achieving six-pack abs. The man replies in a robotic way that suggests he is a chatbot, offering to provide a personalized strength-training plan. But first, he slips in a promotion for shoe inserts that help "short kings stand tall" — prompting a puzzled response from the twenty-something.

The punchline: "Ads are coming to AI. But not to Claude," the name of Anthropic's chatbot.

Altman called the ads “deceptive.”

“We’re not stupid," said Altman. "We respect our users, we understand that if we did something like what those ads depict, people will rightfully stop using our product.”

Should you check your 401(k) today?

👍️ 

Yes.

Poll of the day: Lols

Poll results: You’re dipping the buy

We asked: “Do you see the investment case for AI-driven tech stocks as broken? Or is this a buying opportunity?”

You answered:

🟨⬜️⬜️⬜️⬜️⬜️ Buy the dip, baby! (65)
🟨🟨⬜️⬜️⬜️⬜️ I'm diversifying the heck out of AI-driven tech stocks and America, generally. (100)
🟩🟩🟩🟩🟩🟩 I'm not even buying any stocks right now. I'd be lucky if I could afford lunch at these prices. (252)
⬜️⬜️⬜️⬜️⬜️⬜️ I've been buying Bitcoin for the last two years. I'm just delighted that the price has fallen from $126,000 to $61,000. Also, buddy, can you spare a bitdime? (14)

431 Votes via @beehiiv polls

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