The Rundown - Chipotle Pilots Guac Robots, Disney and DirecTV Reach Truce to End Blackout

Episode Date: September 16, 2024

Stock market update for September 16, 2024.

Public.com presents the rundown, your daily market update in five minutes. My name is Zaid Admani, and today is Monday, September 16th. In today's episode, we recap last week's epic week in the markets and get you ready for this week's Fed meeting. Then we tell you about Disney and DirecTV settling their beef and a new robot coming to Chipotle. Then stick around to the end of the show to find out why Apple stock is tanking and how much Bitcoin micro strategy just bought to most in three years. All right, let's go.

Guys, last week was the best week of the year for the stock market with both the S&B and NASDAQ up every single day of the week. The S&B was up 4% for the week and the NASDAQ was up nearly 6%. So after a brutal start to the month, both of these indices have regained most of their losses and now they're hovering near all-time highs. So things can turn around pretty quick. And speaking of things turning around, we have to talk about the Fed meeting. The Fed meeting is this week. We know we're getting the rate cut. And suddenly there's a ton of optimist.

that the Fed will cut rates by 50 basis points. We did a mini preview of the Fed meeting on Friday's episode of the rundowns. If you missed that, go check that out. And on Friday's episode, I mentioned that the markets were pricing in a 20 to 30% chance of the Fed cutting rates by 50 basis points instead of the standard 25 basis points. Well, as of this morning, the odds of a 50 basis point cut has gone up to 60% according to the CME Fed watch tool. I mean, I'm a little shocked.

I'm not going to lie. My gut still says the Fed will go with a standard 25 basis point cut. But I'm not sure anymore. I guess I wasn't expecting the markets to change their mind so quickly. Either way, we'll officially find out by Wednesday afternoon. And this might be the most excited I've been for a Fed meeting in a long time. Don't be surprised if there's a ton of volatility leading up to the meeting and after the meeting. Because even if we do get a 50 basis point cut, it doesn't mean the markets are going to rally.

Like on one hand, yes, a 50 basis point cut sounds bullish, right? Because it would make borrowing money cheaper, which should help drive economic activity. But it could also be seen as a panic move by the Fed and cause investors to get nervous. So that's the dynamic at play here, and that's why I'm really looking forward to this meeting. As always, we will keep you guys in the loop leading up to the meeting and following the meeting. So make sure you guys are subscribed to the podcast if you aren't already, because this could be a big week. Stocks could end the week at all-time highs, or we might be looking at another down week. Everything is in play here, and that's why I'm so hyped.

Let's run through some headlines. If you have DirecTV, you were finally able to watch some college football over the weekend. Disney and DirecTV ended their standoff and agreed to a new deal. bringing ESPN and ABC back to more than 11 million Direc TV subscribers. The Disney blackout on DirecTV lasted for 13 days, and DirecTV consumers couldn't watch 16 Disney-owned channels. And the big ones were the sports channels like ESPN and ABC. So the DirecTV subscribers missed the U.S. Open tournament, which the final wasn't that great.

They missed the first Monday night football game, which also wasn't that great. And they missed the Bachelorette. But these two companies reached the deal on Saturday morning right before the college football game started. Now, with this new deal, DirecTV will have the option to offer. offer genre-specific packages related to sports, entertainment, and family, and also the ability to bundle Disney streaming services with select the direct TV packages. But at the end of the day, this fight between Disney and DirecTV highlights a rapidly changing media landscape.

Back in the day, these cable providers like DirecTV would pay Disney whatever they wanted for their channels, because where else are people going to get their content, right? Disney had all the leverage. These days, not so much. People have other means of being entertained, whether it's YouTube, TikToks, whatever. And DirecTV wasn't cool with Disney. Disney continuing to hike up rates for ESPN and its channels, especially because Disney's been putting a lot of their good content on Disney Plus

instead of Disney-owned channels. So the price was going up and the quality was going down, and that's why DirecTV didn't want to pay Disney more money. Direct TV held out on a deal, and it looks like they got something worked out. Honestly, if it wasn't for sports, Disney would be in deep trouble with their cable channels. Because who watches Disney Channel anymore? Let's talk about Chipotle because they're bringing robots to their stores to make guac. After testing these robots in a lab, Chipotle is supplying two California locations with a machine

that carves out avocados in 26 seconds. How do I get my hands on this thing? This robot is dubbed the otocado by Chipotle, and the robot is part of the company's strategy to reduce wait times and stores while also addressing the backlash about skipping out on portion sizes. If you guys remember, Chipotle came under fire over the summer because of small portion sizes. In fact, the CFO said in July, they're working with employees to serve correct and generous portions, even though it means taking a hit on the margins. So hooking up customers with an extra guac is a great place to start, if you ask me.

But what lays says it goes through 5.2 million avocado cases in the U.S., Canada, and Europe. So this robot should help cut down on prep time. Let's talk about some stocks making moves today. Shares of Zillow are up after the investment company, Wedbush, upgraded the stock to outperform and increase their price target from $50 to $80. Zillow is currently training around $60 a share. Wedbush points to upcoming lower mortgage rates as a catalyst for the housing market, which would be good for Zillow's business. Zillow stock is up around 2% on this news.

I've said this before, but the Zillow app is one of the best apps when it comes to entertainment and daydreaming. Like, I'm not looking to buy a house right now, but I'll still open the app once every couple weeks. Just to look at beach properties in San Diego. I know I can't afford it, but it's still fun to look. Or looking up the zestaments of the really nice house that your friend just bought. I mean, we've all done it, right? Now, on the flip side, Apple's not doing so good this morning. their shares are sliding after multiple reports suggest the early demand for the iPhone 16 hasn't been so great.

The reports point the delivery times of the iPhone 16's being shorter than that of the iPhone 15 at launch, which could be a sign that Apple didn't get as many pre-orders. Apple stock is down 3% on these reports, which is pretty significant for Apple. There was a lot of optimism leading up to the iPhone 16 launch that the new iPhone with all its AI features is going to have a ton of people upgrade, and that might still be the case, but these days people aren't out here camping outside of an Apple store at midnight to get their new iPhones, okay? That doesn't happen anymore. People that want to upgrade are probably just going to wait a week or two or maybe even a month before getting the new phone. So this might not be that big of a deal. Or maybe it could be. Maybe I'm underreacting

here. So I guess we'll find out at Apple's next earnings report, which should be a pretty crucial one. Let's wrap the show with a fun fact. Micro Strategy just bought $1.1 billion worth of Bitcoin. This purchase of 18,300 Bitcoin was the largest purchase by Micro Strategy since 2021, when about more than 19,000 Bitcoin. I mean, at this point, Micro Strategy has turned into a Bitcoin holding company. Yes, technically there are a software company that sells some services. I'm not really sure what they do, but they own more than $14 billion in Bitcoin. So that's kind of what they are, a Bitcoin holding company.

Company started buying Bitcoin four years ago because their CEO, Michael Saylor, is a big-time Bitcoin Maxi. And I guess they don't plan on stopping anytime soon. The company is currently the largest corporate holder of Bitcoin. and it trades under the stock ticker M-S-T-R. What's the end goal for Michael Saylor here? Like, they're just going to keep buying Bitcoin until it reaches like, what, a million bucks? I don't know.

But they're not stopping. Well, all right, guys, that's the rundown for today. We have a big week coming up. Can't wait to see how markets react this week. I'm so pumped. If you guys have a prediction for what the Fed's going to do this week, let us know in the comments. You can actually leave a comment on Spotify now.

And while you're there, don't forget to hit us with a five-star rating and subscribe to the podcast as well. Thank you guys so much 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.

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