The Rundown - Fed Cuts Rates by 0.25%, Airbnb Slips 10% Following Profit Miss

Episode Date: November 8, 2024

Stock market update for November 8, 2024.

Public.com presents the rundown. Your daily market update in five minutes. My name is Zadadmani, and today is Friday, November 8th. In today's episode, we recap a memorable Fed meeting and Jerome Powell's comments on his job security. We also recap earnings from Block, Lucid, Airbnb, and Pinterest. Then stick around to the end of the show to find out how much money the crypto industry spent on the election and why it totally paid off. All right, let's go. Well, guys, stocks continued to rally yesterday breaking new record highs.

The S&P 500 added 0.7% and had its 49th record close of the year, and the NASDAG jumped 1.5% for its 30th record close of the year. So it looks like the post-election stock market rally hasn't fizzled out yet, and investors could also be reacting to the Fed meeting yesterday. Jerome Powell and the Federal Reserve cut rates by 25 basis points to be between 4.5 and 4.75%. That was expected, all right? no shockers there. Now, I did tell you guys yesterday that Jerome Powell's press conference could get

pretty interesting, and there were definitely moments. The press conference started off in a typical fashion. Jerome Powell said the Fed believes the economic conditions are on solid footing, citing progress on inflation and low unemployment. Those are the typical comments I think Jerome Powell has made in pretty much every meeting this year. But then we got to the Q&A session, where Jerome Powell predictably got a few questions about the election and Trump. Jerome Powell was asked if the election results would have an impact on the Fed's policy. decision, he said in the short term the election would have no effect on the policy decision. And then another reporter asked Jerome Powell if he would step down if Trump asked him to resign.

And Jerome Powell was straight up like, no. Some of the president's elects advisors have suggested that you should resign. If he asked you to leave, would you go? No. Can you follow up on his, do you think that legally you're not required to leave? No. So then after that, another reporter followed up asked asking Jerome Powell if he thought the president had the power to fire him.

And his response, you know what? Just listen to the clip here. Do you believe the president has the power to fire or demote you? And it has the Fed determined the legality of a president demoting at will any of the other governors with leadership positions? Not permitted under the law. Not what? Not permitted under the law. So yeah, that was probably the most memorable moment of the meeting.

Now, I don't really know if there's major beef between. Trump and Powell. I know they've had some disagreements. But I mean, Trump is the one who appointed Jerome Powell as the Fed chair back in 2018 for a four-year term. And then Biden ended up reappointing him in 2022. So Jerome Powell's term doesn't expire until 2026. And I guess he expects to fully serve out that term. That exchange, I thought was pretty funny. And it was like a real life example of Powell doing the Wolf of Wall Street. I'm not leaving. Meme. Let's run through some headlines. Let's start with TSM, Taiwan Semiconductor, the world's largest chip producer. They just reported their slowest revenue growth in eight months.

Revenues in October were up 29% year over year, which sounds pretty good, but this was the first time that the revenues had dropped below 30% for the first time in seven months. Now, this revenue slowdown from TSM comes at the same time of reports that TSM's not going to be making AI chips for Chinese companies anymore. like Alibaba and Baidu, that's pretty interesting. And I think the U.S. government has a role to play here because the U.S. government has been working to block China from getting access to these advanced AI chips by placing export restrictions on companies like NVIDIA

and other American chip producers. So I got a feeling that the U.S. government might have made a couple calls to TSMC. And remember, TSMC is based in Taiwan. So yeah, pretty interesting dynamics playing out here. And I wonder how it will impact TSM's business moving forward. Let's shift gears and talk about Block, the company behind Cash App,

and Square, they announced a strategic shift in their growth plan. The company is planning to cut back on its investments in Title, which is Block's music streaming service. Block, which used to be known as Square, bought Title from Jay-Z back in March of 2021 for like $300 million. I'm still not sure why Block bought title. It just might be because Jack Dorsey, who was Block CEO as boys with Jay-Z, kind of a weird move in my opinion.

Now, on top of that, Block is scaling back its move to create a crypto-decentralized. internet based on Bitcoin. Jack Dorsey was calling this Web 5. I guess he just skipped Web 4 entirely. I remember when this announcement was made and I thought it was pretty strange. Block plans to kind of move on from those and shift their focus back to Bitcoin mining and crypto wallets. They recently launched BitKee, which is their hardware wallet that stores Bitcoin. And the company reported that Bitcoin made up nearly 41% of the company's revenue in Q3. So they're leaning harder into that. Investors seem to be kind of nervous though. Block shares are down around 7% in reaction to their earnings.

But seriously, though, does anybody use title? Let's talk about some stocks making moves today. Shares of Lucid are up this morning after the EV company announced that orders for its new SUV, the Lucid Gravity, are now available. The SUV is going to start at around $95,000 and will begin production in late 2025. So you've got to wait at least a year to get your hands on it. But buyers can put down a $1,000 deposit for the SUV today. The company also reported earnings and saw a slight revenue beat in the quarter, delivering

nearly 2,800 cars in the quarter. Investors seemed to be somewhat optimistic, and shares of Lucid are up more than 3% on this news. Now, on the flip side, shares of Airbnb are down after they reported mixed earnings. Airbnb's revenues were up 10% slightly beating estimates, but their profits did underperform. Overall, though, Airbnb continues to grow, especially in the international markets. Now, the stock's reaction to the earnings has been pretty volatile. So initially the stock jumped 5% when the earnings came out, but it's now down 6% at the time of this recording.

So that's a pretty wild swing. And finally, shares of Pinterest are plummeting after the company provided a weaker than expected Q4 Outlook. Management cited lower advertising demand from food companies for hurting sales. The company did beat earnings and revenue estimates for the quarter, though, but the poor outlook has investors kind of worried. Pinterest shares are down around 11% on this news. Let's wrap the show with a fun fact.

Crypto industry spent $135 million on this election to back more than 50 candidates, including both Democrats and Republicans, and it looks like that bet has paid off. As of right now, 48 out of the 48 candidates backed by crypto super PACs have won their races, and there are still eight races that are still being counted. You know, I mentioned how Trump embraced crypto during his campaign and his victory caused the price of Bitcoin to jump to record highs. Well, I think the other big winner was Republican Bernie Moreno. He was heavily backed by the crypto crowd, and he won the Ohio Senate race,

beating incumbent Sherrod Brown, who was kind of a crypto skeptic. So this election was a pretty big one for the crypto crowd, and I wonder what happens now. Like, what kind of regulations are we going to see when it comes to crypto? What kind of innovations are we going to get? It could get pretty interesting. And remember, if you've considered dabbling into crypto, you can buy Bitcoin and other cryptocurrencies on the public app. I mean, I had to plug the app right there.

It was just too easy. Well, all right, guys, that's the rundown for you. today. That's the rundown for this week. And what a week it was. We had an election, a Fed meeting, markets hitting record highs, a ton of earnings. I mean, it was just nonstop action. Next couple weeks could get pretty interesting. We'll find out how sustainable this market rally is, and we're still kind of in the middle of earnings season. I know it's starting to wind down, but there's still a lot of major companies that have yet to report. Disney, Spotify, Home Depot, Kava, Nvidia, so we'll have a lot to talk about over the next few weeks. Also, a quick reminder,

keep an eye on your feed on Saturday morning because we're going to be dropping our first ever weekend deep dive episode of the rundown. In this episode, we're going to do a five to seven minute deep dive on just one topic. And our plan is to post these every Saturday moving forward. So let us know what you think about that and leave a comment.

Let us know what topics we should cover on future episodes. Thank you guys so much for listening. Shout out to Mike and Connor for all the help behind the scenes. Have a great weekend, everybody. 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. Redound 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. Respected professionals. Learn more at public.com disclosures. In partnership with Zayidamani, brokerage services for U.S. listed, registered securities are offered by open to the public investing incorporated, member FINRA and SIPC.