The Rundown - Apple's Annual iPhone Event Kicks Off, Dell & Palantir Join the S&P 500

Episode Date: September 9, 2024

Stock market update for September 9, 2024.

Public.com presents the rundown, your daily market update in five minutes. My name is Zadmani, and today is Monday, September 9th. In today's episode, we recap last week's brutal week in the markets and get you ready for this one. The few big things happening that could impact your portfolios. Also, the S&P 500 is getting a makeover. Two companies are in and two are out. We also tell you why the new iPhone might be getting a price increase,

and Elon's AI company might be doing a deal with Tesla, maybe. Then stick around to the end of the show to find out what four companies make up nearly half of Nvidia's revenue. All right, let's go. The stock market was only open for four days last week, but yet it still managed to have the worst week of the year. The S&P 500 dropped 4.2%. That's the worst week since March of 2023. And the NASDAQ was even worse. It was down 5.7%, which is the worst week since June of 2022.

So absolutely brutal week. Now, I did mention last week multiple times as September historically has been the worst month for stocks. In fact, over the last 10 years, September is the only month to have a negative return. But, I mean, still, seeing a 4 to 5% drop in a week, I wasn't expecting that. But hey, it's only the first week, and maybe investors will buy the dip just like they did in August. This week we have a couple notable events coming up. We have a presidential debate happening tomorrow night. The August CPI report is coming out on Wednesday morning.

The PPI report is coming out on Thursday morning. So that should tell us how inflation is doing. And that could impact the Fed's decision regarding rate cuts. The Fed meeting is next week. So we got a lot happening over the next couple weeks, and I expect the markets to be pretty volatile as we get closer to the election. We're going to be covering all the market drama here on the rundown. Remember, we got new episodes dropping every morning.

So make sure you guys are subscribed to the podcast if you aren't already. And hit the notification bell on Spotify so you're notified as soon as an episode comes out. Let's run through some headlines. The S&P 500 is getting. a makeover. Dell and Palantir will be joining the S&P 500 officially on September 23rd. And because the S&P 500 companies, two companies are getting kicked out. Etsy and American Airlines. Now, investors seem to get pretty hype when a company they're invested in gets

added to the S&P 500 because ETFs that track the S&P 500 have to buy stocks in the companies that are being added to the index. ETFs like SPY and VOO, they both track the S&P 500 and they have hundreds of billions of dollars. They're going to have to buy stocks. shares of Dell and Palantir, and on the flip side, also sell shares of Etsy in American Airlines. And that's why Palantir stock is up around 8% this morning in reaction to this news. And Dell's stock is up around 4%. Now, Dell and Palantir have been getting a lot more attention lately due to their growing

AI business. A Dell's AI server business has been running hot. We talked about them a couple weeks ago when their earnings came out. They're doing great right now. And Palantir, well, I'm not really sure what Palantir does. I don't think anybody really knows what Palantir does, but they've been racking cash and they've been talking about how great their AI is. So yeah, if you're invested in the S&P 500, if you own an ETF like SPY or a V-O-O that tracks the S&P 500, starting September 23rd,

you're going to own a small piece of Dell and Palantir. And that's why the S&P 500 is the most exclusive club in the world. They kick out the companies that are underperforming and they add the companies that are doing great. I wonder how it feels to be kicked out of the S&P 500. Like that's probably not a fun phone call. Let's shift gears and talk about Apple. We talked about how September is the worst performing month of the stock market, historically speaking, Well, there are some good things about September, like the weather starts to get pretty nice, at least here in Texas. Football comes back, and we get a new iPhone.

Apple's iPhone event is today. And for Apple fanboys like me, I mean, this is a big day, even though these events usually disappoint. Now, we preview the event on Friday's episodes to go check that out. But essentially, we're getting four new phones with Apple Intelligence and maybe even some new AirPods and a new Apple Watch. But one thing to watch out for is price increases. Apple's pro models have been $1,000.

since like 2017. But there are rumors that Apple might increase the price of its pro phone to $1,100 to cover the expensive new hardware required for the AI features, along with inflation. So I wonder how the market's going to react, because typically investors like price increases, more revenue for the company. But if on the other hand, it hurts sales of new iPhones, then that's not great either. I mean, there is big expectations for this new iPhone. Since Apple is incorporating AI, some analysts think it will result in the largest ever upgrade cycle

in Apple's history. I mean, that seems a bit optimistic for me because I don't think people are going to upgrade to the latest iPhone just because it has some fancy AI tricks. But we'll see. I'm going to be watching the event live. You can watch it on Apple.com or Apple's YouTube channel. It starts streaming at 1 p.m. Eastern. We'll recap the event and how the markets reacted in tomorrow's episode of the rundown. Usually these events are on a Tuesday. Apple decided to do it on a Monday this time, which is interesting. Let's stick with a tech theme and talk about XAI and Tesla. Those are both companies run by Elon Musk. The Wall Street Journal, Tesla and XAI have discussed a potential revenue-sharing deal. According to the reporting, X-AI would share its large-language AI models with Tesla

to help build out the EV Giants' autonomous self-driving software, as well as Tesla's AI tech for its humanoid robot. XAI talked about taking half of Tesla's FSD's self-driving software revenue. Now, Elon responded to the Wall Street Journal's article on another one of his website that he owns X, formerly known as Twitter. He said that reporting is inaccurate. So there you have it. Now, Elon has been putting some eggs into the XAI basket as of late.

Like, there was reports that he's redirecting Tesla's Nvidia chip delivery over to XAI. And I wonder if the fact that Elon also owns Twitter gives XAI some advantages because social networks have like a large sum of data to train AI models. At this point, Elon should just combine all these companies into one. Because it's got to be exhausting, shifting through like six different email accounts on your phone. Just make it all one. Let's talk about some stocks making moves today. Boeing stock is an early winner this week because they avoided a big strike that could have impacted

the airline manufacturer's main factories. Boeing reached a deal with the union, which includes settlement for over 30,000 workers providing union members with a 25% pay bump and other benefits over four years. The union will vote on the approval of the deal on September 12th. Boeing stock is up more than 3% on this news. On the flip side, stock not doing so great is Merck. Mark shares are down this morning because their competitor's summit therapeutics enter phase 3 for their lung cancer drug saying that it had clinically meaningful benefits compared to Merck's offering. Merck's lung cancer drug, Kytrunda, made up more than 40% of the firm's revenue last year. So competition in that space could hurt the company's revenues moving forward.

Merck's stock is down around 3% on this news. All right, let's wrap the show with a fun fact. More than 40% of Nvidia's revenues are from four companies, according to their 10K. Now, Nvidia didn't reveal who these companies are, but it's pretty well known that Microsoft, meta, Google, and Amazon are spending billions. and billions of dollars on AI, and some of that money is going towards buying Nvidia AI chips. So, Nvidia is the big beneficiary of these big tech companies spending tons of money on AI, but it also is a potential weakness in their business, because if one of these companies

decides to cut down on AI spending, that could meaningfully impact Nvidia's business. So, something to keep an eye on. Well, all right, guys, that's the rundown for today. Thank you guys so much for listening. If you guys enjoyed the episode, don't forget to hit us with a five-star rating on Apple and Spotify. And if you're listening on Spotify, don't forget to vote in today's Spotify. poll. Thank you guys again for listening. Shout out to Connor and Mike for all the help behind

the scenes. And 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. Run-down guests are not financial advisors and are not affiliated with public holdings or subsidiaries. You should make your own financial and investment decisions or consult. Respected professionals. Learn more at public.com disclosures. In partnership with Zayidmani. Brokered services for U.S. listed, registered securities are offered by open to the public Investing Incorporated, member Finra and SIPC.