Wall Street Breakfast Podcast: Inflation Fuels $5 Meal Clash

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Burger King (QSR) to launch $5 value meal to outshine McDonald’s (MCD). (00:30) SEC approves spot ethereum (ETH-USD) ETFs in huge win for crypto world. (01:48) Nvidia (NVDA) cuts AI chip price in China amid competition from Huawei – report. (02:41)

This is an abridged transcript of the podcast.

Burger King (NYSE:QSR) is bringing back its $5 value meal.

Seeking Alpha reported earlier this month that Mcdonald’s is also bringing back the $5 deal but the company is getting some pushback from franchisees about the offer due to high labor costs.

The return of value meals highlights the pressure U.S. fast food chains face to attract lower income consumers who have pulled back from eating out due to sticky inflation.

Also getting in on the action is Wendy’s (WEN) who announced its $3 breakfast meal deal earlier in the week.

According to a Bloomberg report, Burger King’s value meal consists of a choice of one of three sandwiches with nuggets, fries, and a drink.

McDonald’s promotion is similar. Customers will have the choice of one of two sandwiches with nuggets, fries and a drink.

The report said Burger King plans to run its promotional offer for several months. However, Bloomberg reported earlier that the McDonald’s promotion would run for about four weeks.

McDonald’s (MCD) is reportedly set to launch its $5 value meal in the U.S. beginning June 25, although you may be seeing TV commercials for the deal now.

The U.S. Securities and Exchange Commission has approved applications from Nasdaq (NDAQ), Intercontinental Exchange’s (ICE) NYSE, and six others to list exchange-traded funds that invest directly in ethereum (ETH-USD).

The price of the second-largest cryptocurrency, ether (ETH-USD), swung between gains and losses on the news, currently down 3.6% to less than $3,700.

The approval, which until early this week was seen as an unlikely outcome, is a huge win for the crypto world. Issuers of spot ether (ETH-USD) ETFs that got approved still need a separate green light from the SEC before the products can go live, the deadline of which has yet to be set.

A number of investment firms, including BlackRock (BLK), VanEck and Ark Investment Management, are all striving to gain the first-mover advantage in the race to introduce a spot ether (ETH-USD) ETF.

Nvidia (NASDAQ:NVDA) is cutting the price of its most advanced artificial intelligence chip it developed for the China market and pricing it below a rival chip from Chinese tech giant Huawei.

Nvidia developed China-focused chips, the H20, L20, and L2, to comply with U.S. export restrictions. Nvidia’s (NVDA) H20 stands out as the most powerful among the three and has been available for pre-orders in China since March.

However, according to Reuters’ three supply chain sources, there is an abundant supply of the chip in the market, signaling weak demand.

This has resulted in “H20 chips being sold in some cases at an over 10% discount to Huawei’s Ascend 910B – the most powerful AI chip from a Chinese company,” two of the sources said.

Nvidia (NVDA) CEO Jensen Huang during the first-quarter earnings call said that the company’s business in China “is substantially lower than the levels of the past. And it’s a lot more competitive in China now because of the limitations on our technology.”

Beijing has stepped up efforts to replace Western technology in response to planned curbs by the U.S. on the world’s second-largest economy. Earlier this month, Chinese officials reportedly asked the country’s tech firms to favor domestically produced AI chips over foreign-made ones.

More articles on Seeking Alpha:

Tesla’s Elon Musk no longer in favor of U.S. tariffs on Chinese EVs

Norfolk Southern reaches settlement with EPA, DOJ and DOI on Ohio derailment

Alphabet, Meta eye multimillion-dollar AI partnerships with Hollywood studios

Catalyst watch:

• Nasdaq will publish its latest report on short interest positions. The update on volatile stocks such as GameStop (GME), AMC Entertainment (AMC), Virgin Galactic (SPCE), and Carvana (CVNA) will be of interest to traders.

• FTSE Russell will post preliminary index additions and deletions membership lists.

After a string of record highs, Wall Street suffered a setback on Thursday as the three major averages ended in the red.

The Nasdaq (COMP:IND) ended 0.39% lower. The S&P 500 (SP500) shed 0.74%. The Dow (DJI) fell the most, slipping 1.53%.

Of the 11 S&P sectors, 10 ended in the red.

Now let’s take a look at the markets as of 6 am. Ahead of the opening bell today, Dow, S&P and Nasdaq futures are in the green. Crude oil is up 0.8% at more than $76 per barrel. Bitcoin is down 3.4% at more than $67,000.

In the world markets, the FTSE 100 is down 0.5% and the DAX is down 0.4%.

The biggest movers for the day premarket: Ross Stores (NASDAQ:ROST) added 8% on reporting better-than-expected Q1 results and raising the FY2024 outlook.

On today’s economic calendar: