The Rundown - Big Tech Gives U.S. Military More AI Upgrades, FTX Sues Binance

Episode Date: November 11, 2024

Stock market update for November 11, 2024

Public.com presents the rundown. Your daily market update in five minutes. My name is Zad Admani, and today is Monday, November 11th. In today's episode, we recap the market's epic rally last week and some of the biggest winners. We also discuss AI companies coming for government agencies, including the U.S. military. Then stick around to the end of the show to find out the latest company to offer their AI model for free. All right, let's go. Well, guys, we are coming off a pretty pretty.

historic week in the markets. Last week, the S&P 500 added 4.7%. The NASDAQ was up 5.7%. Both of these indices finished at record highs and had their best weeks of the year. Investors seem to be pretty excited about an upcoming Trump presidency. Trump has promised lower corporate taxes. He's promised looser regulation, which investors hope will lead to higher profits. Trump has also made big promises to the crypto industry, and that's why cryptocurrencies across the board are surging, especially Bitcoin, which hit all-time highs last week, and it doesn't seem to be slowing down. The price of Bitcoin is now above $81,000. I mean, it's easy to see why crypto investors are so hype right now, because Trump has said that he wants to make the U.S. the crypto capital of the world. So we're probably

going to get looser regulation and more crypto-friendly policies. And finally, we have to mention Tesla and Elon Musk. I think he might have been the biggest winner last week. Tesla stock was up 29% last week, and its market cap closed above $1 trillion on Friday. The first time, the first time since October of 2021. And because of the surge in Tesla stock price, Elon's net worth done $50 billion last week alone. See, Elon and Trump became boys over the last few months. In fact, Elon donated over $130 million towards Trump's campaign. So Tesla investors think that Elon having this close access to the next president will be very beneficial to Tesla. There's even talks about Elon having a cabinet position in Trump's administration. We actually did a deep dive podcast on the Trump

Elon Bromance and what it could mean for Tesla moving forward. That episode should have popped up on your feed on Saturday. If you haven't checked it out yet, go give it a listen. And let us know what you think. We're going to be doing more weekend deep eyes moving forward. So let us know what topics you want us to cover in the comments. But yeah, man, last week was pretty euphoric for markets and investors all across the board. I didn't expect Marcus to move up that aggressively.

Like, I definitely understand the optimism for lower corporate taxes and lucid regulation and the hype for crypto makes sense as well. But that stuff is going to take a little bit of time to fully play out. Also, there's a couple wild cards hanging out there, like Trump's tariffs. Trump has talked about imposing a 10 to 20% blanket tariff on all U.S. imports and maybe raising tariffs on Chinese goods by 60 to 100%. So that could end up starting a trade war, which might not be so great for companies or U.S. consumers. So we'll have to see how this all plays out. And I wonder if this rally continues or if we're going to see the markets cool off a bit as we head into the holidays and investors start taking some profits.

Let's run through some headlines. Let's talk some AI because AI companies are making big moves to get into business with the military. The latest company to get involved is Anthropic. That's the company behind the AI chat box Claude. Well, they announced that they're working with Palantir and Amazon to bring Claude AI to U.S. intelligence and defense agencies. Now, the reason that Anthropic is partnering with Palantir and Amazon Web Services is that both of these companies already provide a data software solution to numerous U.S. agencies.

There's a lot of red tape and complex contracting requirements to get access to these U.S. agencies, and Palantir stands already know, Palantir is a leader in that space. That's why their stock is up more than 250% this year. So now that Anthropic has partnered with Palantir, their AI models will be available within Palantir's data analytics platform. And this partnership with Amazon makes sense because Amazon is a big investor in Anthropic. Getting access to these AI models will help these U.S. agencies, including the U.S. military, process vast amounts of complex data, evaluate data-driven insights,

and help U.S. officials and the U.S. military make more informed decisions in a time-sensitive matter. This is according to the press release. So yeah, AI is coming to the U.S. government. I talked about this a little bit last week, where META announced that they would open up their AI model Lama to the U.S. military. Mehta also announced partnerships with big corporate military players like Pallantir, Lockheed Martin, and more. So I wonder what the integration of AI into these U.S. agencies will mean moving forward. Maybe it'll make things more efficient, we'll have to see. But one thing is for sure.

I think we're going to see more and more AI companies sell. their services to U.S. agencies, the Defense Department, and defense contractors. In fact, the U.S. Defense Department has increased their AI budget to $1.8 billion this year, which is more than double what it was back in 2022. And don't be surprised if that budget keeps going way up. Let's shift gears and talk a little crypto, specifically FTX. Their corpse is still around, and they just filed a $1.8 billion lawsuit against Binance and its former CEO, CZ. I didn't think we'd have any more FTX and Binance drama in 2024. But let's say, do it. So here's the deal. Binance and FTX were two of the largest crypto exchanges in the world.

FTX famously blew up and now its founder, Sam Bankman-Fried, is sitting in prison for the next 25 years. Binance's CEO, CZ, also went to jail, but only for a few months. He's back out, but he's not involved with Binance anymore. Binance is still around still doing their crypto exchange thing. All right, so what is this lawsuit about? Well, see, Binance used to hold an equity stake in FTX when they invested in FTX back in 2019. But then in 2021, they sold their equity stake in FTX back to FTX for like $1.8 billion. But those share buybacks should have never happened according to this lawsuit. They were fraudulent because these share buybacks were funded by FTX's sister trading house Alameda research. Apparently Alameda was insolvent when this

transaction happened. So now FtX's estate team, which is in charge of cleaning up this FtX debacle, is calling that transaction fraudulent and they want their $1.8 billion back from Binance. If all that was kind of confusing to you, then don't worry. I'm kind of feeling the same way. I feel like the crypto community, though, has kind of moved on from all of this, you know? I mean, Bitcoin's hitting all-time highs, crypto is rallying. The whole FTX collapse just seems so far away, even though it's only two years ago. It's kind of crazy that Bitcoin is back to hitting all-time highs after all of that happened. Let's talk about some stocks making moves today. Shares of Micro Strategy are soaring this morning. MicroSrategy is the Data Analytics Software Company co-founded by Michael

Saylor. He's the Bitcoin guy. Now, MicroSrategy might be a software company on paper, but it's more of a Bitcoin holding company. They hold over $20 billion in Bitcoin on their balance sheet. And that number just keeps going higher and higher as Bitcoin continues to make all-time highs. So yeah, I'm guessing that investors are more excited about MicroSratage's Bitcoin holdings than they are about their software business. Micro Strategy shares are up more than 9% this morning as a result of the Bitcoin rally. Now, on the flip side, shares of Humana are down after it was announced that Insurance Giant Cigna would not be pursuing an acquisition of the company. Both these insurance companies have millions of members, and it would have been an interesting

combination. They've kind of had an on-again, off-again conversation about merging, but it looks like it's off the table right now, and as a result, Humana shares are down 5% on this news. Let's wrap the show with a fun fact. Twitter is testing a free version of its GROC AI, and I said Twitter, but I meant X. X is making GROC AI free to use for users in New Zealand. Now, GROC is available for users in the United States for premium and premium. premium plus subscribers. So basically you gotta pay eight bucks a month for access to Grock. Now, I haven't used it yet, but if they made it free, I'd probably give it a shot. But I am starting to get a bit overwhelmed by all these AI tools now.

I mean, there's so many. There's Chad GPT, there's Claude, there's Perplexity, there's Gemini. Is Bing still around? Meta has an AI now. There's so many these days that I'm just starting to get overwhelmed, you know? Well, all right, guys, that's the rundown for today. This week is going to be kind of hard to top last week. so much action last week, but we still have some earnings to look forward to this week. Shopify, Spotify, Kava, and Disney are all reporting earnings this week. And it'll be interesting to see how the markets react this week following last week's

epic rally. If you guys enjoyed today's episode, consider giving us a five-star rating on Apple and Spotify. Vote in today's Spotify poll. Leave us the comment. All that engagement really helps us out. And please check out our weekend deep dive episode about Elon Musk and Trump and what a Trump presidency will mean for Tesla moving forward. Thank you guys again for listening. Shout out to Mike and Connor 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 its subsidiaries. You should make your own financial and investment decisions or consult. Respective professionals. Learn more at public.com disclosures. In partnership with Zayid Money, brokerage services for U.S. listed, registered securities are offered by Open to the Public Investing Incorporated, member FINRA and SIPC.