The Rundown - AMD Acquires AI Equipment Maker for $4.9B, Mpox-linked Biotech Stocks Rally as Virus Spreads

Episode Date: August 19, 2024

Stock market update for August 19, 2024. Check out our Leading Indicator podcast to hear the CEO of IMAX explain how R-rated films like Deadpool & Wolverine are impacting the business. New: ⁠Bond Account⁠ Discover a new way to invest in bonds and earn a 7.3%* yield with monthly interest payments. *A Bond Account is a self-directed brokerage account with Public Investing, member FINRA/SIPC. Deposits into this Account are used to purchase 10 fractional investment-grade and high-yield bonds in equal par value allocations. All bond investments are subject to risk, including risk of default. High-yield bonds carry greater risk of default than higher rated bonds. ⁠Learn more⁠ Advertised yield is the annualized yield to maturity of all 10 bonds in the Bond Account. The first bond in that set matures in four years; at that point, the avg yield to maturity of the remaining bonds will change. Note that you may not actually receive this yield if you sell the bonds prior to maturity, or if the bond issuer defaults or calls the bond. Payments are anticipated, but all bond transactions are subject to risk of missed payments or default.

Public.com presents the rundown your daily market update in five minutes. My name is Zadadmani, and today is Monday, August 19. In today's episode, we tell you about the epic bounceback from the stock market last week. A Wall Street Bank is now lowering its forecast for a recession. We also tell you about AMD's latest acquisition as they try to compete with Nvidia in AI. Then stick around to the end of the show to find out how much money Deadpool made at the box office so far. It's a new record, and it might be a sign that movie 3rd,

theaters might be back. All right, let's go. The stock market got back to its winning ways last week. In fact, stocks had their best week of the year. The S&P jumped nearly 4% and the NASDAQ was up more than 5%. This may be hard to believe, but the S&P is now within 2% of its all-time highs. The vibes seem to move so quickly on Wall Street now. Two weeks ago, the markets were in meltdown and recession seemed imminent. And now markets seem to be back on track, thanks to encouraging and and retail sales data, and Goldman Sachs actually lowered their odds of a U.S. recession from 25% down to 20%. I've said this before, but I'm kind of loving the volatility right now. We might be in for another interesting week because the Federal Reserve is meeting in Jackson Hole.

Jerome Powell and the Fed gang will meet with other central bankers, policymakers, and economists from all over the world. Honestly, sounds like a pretty fun time, taking hikes through the Teton's while talking about rate cuts? I wish I was there. Now, the Fed won't make any official decisions on rate cuts, but we are getting a Jerome Powell Press conference on Friday, and I'm sure we'll get some hints on what the Fed plans to do at the September meeting. Right now, according to the CME Fed Watch tool, the markets are pricing in a 70% chance of a 25 basis point cut and a 30% chance of a 50 basis point cut. So either way, the markets are pretty much certain that we're getting a rate cut. It's just a matter of how big of a cut are we going to get. And then on top of

the Jackson Hole Fed meeting, we're also getting some earnings this week, especially from retailers like Target, Macy's, and T.J. Max. Investors like to pay close attention to see how retailers are doing because it's another data point of how consumers are spending their money. We're also getting earnings from Kava. So that should be a good one. So it should be another fun week. Make sure you guys are subscribed to the pod. Hit that notification bell on Spotify so you're notified as soon as an episode goes up every morning. Let's run through some headlines. AMD announced a new acquisition this morning. They're buying AI equipment maker ZT systems for $4.9 billion. says that this acquisition will help them sell more AI chips. Now, you might not have heard of ZT

systems, I hadn't either, but they do over $10 billion in annual sales. So that's going to allow AMD to bolster its data center AI infrastructure offering and keep up what the scale needed by cloud computing customers such as Microsoft and Meta. This is AMD's third largest acquisition ever, trailing only the $50 billion acquisition of Zilinks back in 2022 and the $5.4 billion purchase of ATI technologies back in 2006. The deal, for Ziti Systems, which is a privately held company, is expected to close in the first half of 2025. Let's shift gears and talk about streaming.

The mega sports streaming platform created by Fox, Disney, and Warner Brothers has been blocked by a judge due to its monopolistic potential. The streaming app, which was called Venue, was set to release next week for $43 a month, giving streamers access to a variety of sporting events all in one app. I mean, that's the dream, right? Well, a U.S. judge says the platform would push other sports streaming competitors out, and it would raise prices and hurt consumers in the process.

This is a pretty big victory for sports streaming service Fubo, which brought the lawsuit against the three companies, claiming that its business wouldn't be able to survive if venue were to launch. But the game isn't over yet. The three entertainment giants are planning to appeal this decision in court. So let's see how this plays out. I miss doing puns. And lastly, this is breaking news.

GM is planning to lay off 1,000 employees in its software and service division, according to CNBC. 600 of these jobs are being cut from the company's tech. campus near Detroit. Now for context, GM has over 160,000 employees all around the world and about 91,000 in the U.S. as at the end of 2023. Let's talk about some stocks making moves today. A couple of biotech companies have seen their stocks shoot up over the past couple days because the World Health Organization declared Monkeypox a global health emergency last week. Shares of GeoVax Labs are of 50% this morning, adding to the 110% gain it logged on Friday.

Vax trades under ticker symbol GOVX, go look it up on the public app, and they specialize in vaccine development. Now, the reason that GOVax saw a stock shoot up was because their rival SIGA technologies said that their M-Pox drug failed to meet their goal. The patients did not recover more quickly than those given a placebo in their clinical trial. So I guess that opens up the door for GioVax to develop a M-Pox vaccine. Man, these biotech stocks have such wild swings. Now, a stock not doing so great this morning is Estee Loder, shares of the makeup giant are falling after the company announced the retirement of its CEO Fabrizio Freda. On top of the management moves, the company's financial forecast came in below Esmits for 2025. The company said it's

experiencing a demand slowdown with its China business weighing down the firm. There's been a lot of competition within the makeup space as of late. Elf Beauty is one of the newer names and their stock has gone up over 800% in the past five years. So I'm sure some of that has to be eating into S.A. Lauder's pockets. The future of S.A. Laudor's management is still unclear. The firm is looking for a successor to Freda and its CFO departed earlier in the summer. So they don't really have anybody right now. Fabrizio Freda said he would continue to serve as CEO until a successor is found. S.A. Loner stock dropped around 4% in the pre-market in reaction to this news. But even in the pre-market stocks can move quickly and now I'm looking again and the stock is like up 1%. So somebody

must have bought the dip. Let's wrap the show with a fun fact. Deadpool and Wolverine became the highest grossing R-rated film of all time over the weekend, reaching nearly $1.86 billion at the box office. And what's interesting is that moviegoers are preferring to catch the movie in IMAX. Deadpool made nearly $100 million from IMAX sales worldwide. You know, personally, the few times that I do go to the movies now, I try to watch them in IMAX because it's a pretty incredible experience. You just can't replicate that at home with a giant screen and the amazing sound.

And that's one of the reasons why IMAX stock has been performing well. this year. The stock is up nearly 33% as of market close on Friday. By the way, public recently sat down with the CEO of IMAX on the Leading Indicator podcast. They talked about the return of box office hits and how events like sports, concerts, and other experiences could be the key for theaters to thrive moving forward. I mean, that's always been my theory. Like, I would pay money to watch a football game at a movie theater on a giant screen. So go check out the new episode of Leading Indicator. Great discussion with the CEO of IMAX. We'll put a link in the description. I wish there was a movie theater that would re-release movies in IMAX.

I would love to re-watch the Dark Night in IMAX or some of the other classics. Well, all right, guys, that's the rundown for today. Should be another fun week with the Fed hanging out at Jackson Hole and all the earnings coming out this week. We'll keep you guys in the loop. Make sure you guys are subscribed to the pod. Hit that notification bell. And if you really enjoy the show and have like 10 seconds, hit us with that five-star rating. And vote in today's poll on Spotify.

That engagement really does help the show. In fact, we're almost at 3,000 five-star ratings on Spotify. We're at 2,900. We are so close, so maybe we'll hit 3,000 this week. Thank you guys again for listening. Shout out to Connor and Mike for all the help behind the scenes. We'll see you guys back here tomorrow. This is the rundown.

Your real-time resource for news events and trends in the markets. All views presented in the show reflect the opinions of the guests. You should not take any mention of a publicly traded security as recommendation to buy, sell, or hold that security. Rounddown guests are not financial advisors and are not affiliated with public holdings or its subsidiaries. You should make your own financial and investment decisions or consult. respective professionals. Learn more at public.com disclosures. In partnership with Zayidimani, brokerage services for U.S. listed, registered securities are offered by Open to the Public Investing Incorporated, member FINRA and SIPC.