The Rundown - Disney's Standoff with DirecTV Causes Channel Blackout, Tesla Shows Signs of Improvement in China

Episode Date: September 3, 2024

Stock market update for September 3, 2024.

Public.com presents the rundown, your daily market update in five minutes. My name is Zad Admani, and today is Tuesday, September 3rd. In today's episode, we recap the wild month of August and preview September. Historically, not a great month for stocks. We also tell you about Tesla's performance in China and the beef between Disney and direct TV that left millions of sports fans in the dark. Then stick around to the end of the show to find out how popular the NFL is when it comes to TV. The stats are wild.

Let's go. September is here, everybody. Summer is unofficially over. And I got to say, August was a wild month in the markets. Remember, August started off with a stock market freaking out because of overall economic uncertainty and the Yen-carry trade unwinding. That caused a mini panic attack,

and markets all over the world had their worst day in years to start off the month. I mean, it was pretty brutal. At one point, the S&P was down 7.3% and the NASDAQ was down more than 10% for the month. But then the markets rallied, and the S&P and NASDAQ finished the month in the green. In fact, the S&P ended up posting a 2.3% gain for its fourth winning month in a row. So you love to see that.

But now that September is here, some investors might still be on edge, because September is historically the worst month for the stock market. The S&P 500 has declined 1.2% in September and finished higher only 44% of the time, going all the way back to 1928. This is according to the Dow Jones market data. And it's not just because everyone's too distracted with their fantasy football team. In fact, September happens to be the second highest month for trading volume because people are coming back from summer vacation and starting to trade stocks again.

So I guess we'll see what happens this month. Maybe the positive momentum will continue through September because there's a lot of stuff happening that could impact the markets. I mean, earnings season is over, but we still have a Fed meeting in a couple of weeks. There's a presidential debate happening next week. And we're also getting economic data, like the jobs report, which comes out on Friday. So we've got a busy month ahead. Make sure you get to subscribe to the podcast.

We got new episodes every morning. We'll keep you guys in the loop. Let's run through some headlines. Tesla just reported their sales numbers from China, and they had their best sales month of the year. Tesla's that has sold more than 63,000 vehicles in the world's largest auto market during August. That's up 37% from July.

But that number is still slightly down from a year ago. So there's some improvements happening for Tesla in China, but if you zoom out and look at how Tesla's competition in China is doing, it kind of shows you why Tesla has face of difficulties in the market. Like BYD, the largest EV maker in the world, said that sales in China jumped to a record monthly high of nearly 3701,000 vehicles, which is up 35% compared to a year ago. Tesla, on the other hand, saw that sales in China were down 5% in the first half of 2024, but Tesla has been making some adjustments to help boost sales. Like they're offering zero interest loans up to five years, and Tesla is also planning a new six-seat variant of its model Y car in China with production scheduled to begin in 2020. This is according to the Reuters report this morning.

So we'll see if Tesla will continue to turn things around in China. Let's shift gears and talk about some drama between DirecTV and Disney. Labor Day weekend is a stack one for sports fans. It's week one of college football. You got the U.S. Open, which is my personal favorite. And DirecTV sports fans couldn't watch it because of a dispute between Disney and Direc TV that resulted in Disney pulling all their channels from Direc TV, which includes ABC and ESPN.

So that means that the 11 million Direct TV subscribers couldn't watch the U.S. Open or watched the football game between USC and LSU, which was a great game, by the way. See, DirecTV and Disney agreed to a distribution deal back in 2019 and it expired on Sunday night. And because they couldn't reach a deal, Disney just decided to pull their channels. And the timing couldn't be worse, especially with the NFL season kicking off on Thursday. But the thing is, that's actually by design. These companies schedule these deals to expire around these pivotal moments to incentivize the two sides to get a deal done quickly.

Disney thinks that DirecTV isn't paying enough for its content. But DirecTV on the other hand, thinks that Disney is charging too much for its content, especially since Disney's putting all their best content on Disney Plus. And these two sides are exchanging words as well, like DirecTV's chief content officer said that Disney's only magic is forcing prices to go up while simultaneously making its content disappear. It's a good line. This is the second year in a row that Disney's found themselves in a dispute with a cable company. Last year, Disney pulled all their channels from Charter right around this time as well,

but did eventually agree to a deal like a day before Monday night football. So maybe the same thing will happen with Disney and DirecTV. But I feel like Disney doesn't have as much leverage as they used to. They did end up giving some confessions to Charter. So we'll see if they do the same thing for DirecTV. But yeah, if you're a DirecTV sports fan right now, it's not great. All right, let's do a quick hit on what's going on with U.S. Steel, which trades under ticker symbol X.

Vice President Kamala Harris said on Monday on the campaign trail that the company should remain American-owned and American-operated. Now, remember, there's currently a $15 billion takeover bid. by Japanese steel maker Naipon Steel. So it doesn't seem like Kamala Harris is cool with that, and that's actually a sentiment also shared by President Biden and former President Donald Trump. Since this bid was announced back in December,

the Steelworkers Union also expressed their objections to the deal, setting concerns about national security and possible layoffs. But Napan Steel has tried to combat hesitations by arguing the purchase would be good for the company and their employees. Shares of U.S. Steel are down in response to this news. Let's talk about some stocks, Making moves today. Shares of Southwest Airlines are early winners this morning after it was revealed that

hedge fund Elliott Management now owns 10% of Southwest Airlines common stock, which allows them to call for a special meeting with management. See, Elliott Management is not a big fan of Southwest's current leadership. In fact, they've called for the CEO Robert Jordan and the executive chairman Gary Kelly to be removed because the company's stock has lost half its value in the last three years. They don't like the way the company's being run right now. Elliot management also wants to nominate 10 board of directors to the airline's 15-person board so they can make some changes of the company to turn things around.

But the CEO has refused to step down so far, and he says he's ready to fight Elliott. The two sides are actually scheduled to meet on September 9th. I kind of wish they would live stream that meeting because I would definitely watch. Right now, investors seem to be hopeful that things are going to turn around in Southwest soon. The stock is up around 2% in the pre-market. On the flip side, Boeing is an early loser this week after Wells Fargo downgraded the stock, dropping the price target from 185 to 119. On top of that, Boeing could also be dealing with a potential strike with union workers that

represent about 20% of Boeing's workforce. So Boeing has a lot to figure out right now. Their stock is down around 5% in the pre-market reaction to this news. Let's wrap the show with a fun fact. The NFL season is about to kick off and the NFL is king when it comes to TV. NFL games accounted for 93 out of the 100 most watch TV broadcast in 2020. according to Nielsen. That was an increase from 82 the previous year.

Out of the other seven broadcasts, three of those were college football games. In fact, no other sports cracked the top 100, although the March Madness College basketball final just missed the cut at 101. But ultimately it goes to show you that football is king in America. Well, all right, guys, that's the rundown for today. Hope you guys enjoyed your long weekend. We got a short week this week. Still a lot to cover.

And if August is any indication, September might be another wild month. If you guys enjoy the podcast, don't forget to hit us with a five-star rating on Apple and Spotify. That engagement really does help us out. 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.

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