The Rundown - Disney's Deadpool & Wolverine Hits $1B at Box Office, Activist Takes Stake in Starbucks

Episode Date: August 12, 2024

Stock market update for August 12, 2024. Check out our ⁠Leading Indicator⁠ podcast for interviews with leaders in business and tech. Subscribe to the ⁠Halftime Report⁠, our weekly newsletter breaking down the most important stories investors need to know.

Public.com presents the rundown, your daily market update in five minutes. My name is Zadadmani, and today is Monday, August 12th. In today's episode, we recapped last week's chaotic week and tell you what to look forward to this week. We might still get some crazy volatility. Also, Disney announced a bunch of stuff over the weekend to energize their fans and investors and Starbucks is coming under pressure from activist investors. Then stick around to the end of the show to find out how much money the next Olympic Games

in L.A. is expected to cost. why they expect to turn a profit. Alright, let's go. I feel like last week was one of the craziest weeks of the year so far. Because literally one week ago, on Monday morning, markets were getting wrecked all over the world. Banks were projecting a recession, people were calling for emergency rate cuts from the Fed, it felt like the sky was falling.

But then by the end of the week, markets pretty much finished right back where they started on Monday. The S&P 500 finished two points lower for the week, down 0.04%, so pretty much flat. And the NASDAQ finished a week down 0. down 0.2%, which is pretty impressive given the fact that at one point the NASDAQ was down more than 5% last week. So we saw an incredible comeback from the stock market last week. Maybe investors were inspired by some of the incredible comebacks we saw from the athletes in the Olympics. Now, the volatility last week was pretty insane, and we might get some of that

this week too, because we are getting hit with some important economic data. The July CPI report comes out on Wednesday morning, so we'll see what's going on with inflation. Then on Thursday, we're getting the July retail sales data, so we'll see if consumers are still spending money or if things are slowing down. If inflation comes in too hot or if retail sales slow down significantly, things could get pretty bumpy in the markets. And then on top of that,

we're still going through earnings season. Notable companies reporting earnings this week are Home Depot, Walmart, and Alibaba. So we'll be recapping all the important stuff here on the rundown every day to make sure you guys are subscribed to the podcast and hit that notification bell on Spotify if you want to be notified

as soon as an episode goes up every morning. Should be another fun week. Let's run through some headlines. Let's start, with Disney. It's been a great summer for Disney and it continues to get better. Disney's Deadpool and Wolverine hit $1 billion at the box office over the weekend. It's only the second R-rated movie to hit that milestone and it's on track to become the highest grossing R-rated movie of all time. I don't know why, but I just find it funny that the highest grossing R-rated movie of all

time is going to be a Disney movie. But beyond just Deadpool, Disney's Pixar Inside Out to also hit the billion dollar mark a few weeks ago, becoming the highest grossing animated movie of all time in the process. But that's not it. Disney also announced a ton of new movies coming up in their pipeline. Toy Story 5, Incredibles 3, Avengers Doom's Day. That's the movie with Robert Downey Jr. playing Dr. Doom. All those movies are expected to come out over the next couple years. So Disney movies are making a bounce back after slumping in the box office the last couple years. But beyond just movies, Disney got fans excited over the weekend at their D23 Expo in Anaheim where they announced a ton of new improvements coming to their parks all over the world. Disney is currently constructing

rides and attractions in almost every park they have all over the world, Disney World, Disneyland, Disney Tokyo, Disney Paris. They're all getting some sort of improvements. And not just that, Disney cruises will be adding four ships to their fleet between 2027 and 2031. So despite Disney reporting a slight slowdown in their parks division last week in their earnings call, they're still committing to spend over $60 billion over the next 10 years to improve their parks, cruises, and everything involved in their experience division. It's making Disney fans very excited, but investors on the other hand still can't seem to get on board. Disney stock is actually down 5% for the year.

I'm not going to lie though, I'm pretty excited about the movies. I mean, Toy Story 5, Incredibles 3, Avengers, those are some heavy hitters right there. We'll make that the poll on Spotify today. Which upcoming Disney movie are you most excited about? Go check out the poll on Spotify and vote in today's poll. Let's shift gears and talk about another iconic company struggling this year. Starbucks. The Wall Street Journal reported that Starboard Value and activist hedge fund took a stake

in the coffee giant. Now, the size of the steak is currently unknown, but Starbucks has become a target for activist investors. Starboard is not the only activist investor investing into the company. Elliot Management, another famous activist hedge fund, bought a stake in Starbucks last month. And what these activist hedge funds are looking to do is force some changes at Starbucks to turn around the company. The company has been struggling. Their sales are down all over the world, especially in China. Their same store sales in China declined by 14% in their latest quarter. According to the Wall Street Journal, Elliott Management is willing to take this to a proxy battle to force some changes at Starbucks. There's currently no word of Starboard would do the same,

but I don't know, maybe Elliott and Starboard can team up to get enough votes to make some changes at the company. Starbucks stock is nearly down 20% this year. Now, it is seeing a nice little bounce today, up 2% in the pre-market in reaction to the activist investors buying in. So we'll see what happens with Starbucks. Let's talk about some stocks making moves today. Elii Lilly's shares are up after Deutsche Bank upgraded the stock to a buck, with a price target of $1,025 per share. Now, this upgrade comes shortly after Eli Lilly raised their outlook for the year

on the strength of their weight loss drug, Zepbound. Shares are currently trading around $900 per share in the pre-market and up around 2% as a result of this upgrade. I mean, people just can't get enough of these weight loss drugs. If you want to learn more about this industry and weight loss drugs,

go check out Publix interview with the CEO of Hems and Hers on the leading indicator podcast. Hems is one of the companies capitalizing on the insane demand for these GLP1 weight loss drugs, and they have a competing product to Eli Lilly and Nova Nordisk. So yeah, we'll put a link in the description to that podcast in this episode.

Go check it out. Highly recommended. Now, on the flip side, shares of JetBlue are falling after they issued $400 million in convertible debt due in 2029. The airline is raising cash to cover up some of their convertible debt due in 2026. They're taking out loans to pay off existing loans. JetBlue has around $1.3 billion in cash on their balance sheet and nearly $5.4 billion of debt as of the most recent quarter. I mean, the company is trying to turn itself around by cutting various routes and focusing on the ones that have been strong, such as the ones in the New York, New England area.

But, I mean, the airline just can't seem to catch a break, man. It was supposed to merge with Spirit Airlines, but then antitrust regulators turned that down. JetBlue shares have fallen more than 67% in the past five years, and shares are down 6% in the pre-market on this news. Let's wrap the show with a fun fact. The Olympic Games wrapped up on Sunday in Paris, and now the Olympic flame is headed to L.A. will host the 2028 summer games and the budget for those games is $7 billion. Now, L.A. actually expects to turn a profit by hosting the Olympics because it actually did that when they hosted the games back in 1984. According to Olympic officials, L.A. made a profit of

$223 million in 1984, which is equivalent to $670 million today. That's pretty rare because most cities lose a ton of money hosting the Olympics. So we'll see if L.A. can pull this off. LA is already making a ton of improvements to prep for the games. They're building out more rail and bus services. They're also renovating the airport, which anyone flying into LAX knows how annoying that is. But yeah, they got four years and a lot of work that needs to be done. All right, guys, that's the rundown for today. We're getting ready for another action-pack week.

A lot of economic info coming out, some earnings coming out as well. We got you guys covered with new episodes coming out every morning. By the way, if you guys enjoyed the show and you have like 12 seconds, hit us with that five-star rating on Apple and Spotify. that engagement really does help us out. Like this show hit number six on the Spotify charts last week, and maybe this week we'll hit top five. So 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. Rundown guests are not financial advisors and are not affiliated with public holdings or its subsidiaries.

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