The Rundown - Gold Hits Record High, Zyn Sales Fuel Philip Morris Earnings

Episode Date: October 22, 2024

Stock market update for October 22, 2024.

Public.com presents the rundown, your daily market update in five minutes. My name is Zadadmani, and today is Tuesday, October 22nd. In today's episode, we tell you why gold is the hottest investment in the world right now. We also dive into Nike's new partnership with the NBA and why Cheesecake Factory has come under attack by an activist investor. Then stick around to the end of the show for an earnings recap of GM, Verizon, and more, and find out why Chick-fil-A is launching their own streaming. service. All right, let's go. Well, it wasn't a great start for the week for the stock market. The S&P 500 dropped 0.2% with over 400 companies finishing the red on Monday. Now, the NASDAG did squeeze

out a gain of 0.3% thanks to another solid day from big tech stocks, especially NVIDIA, which jumped 4% yesterday to a new record high. Invidia's market cap crossed $3.5 trillion for the first time ever. So, Nvidia's stock continues to stay hot. and I feel like the only thing hotter than Nvidia right now is gold. The price of gold crossed $2,700 per ounce yesterday for a new record high as well. It's just funny how two of the hottest investments right now is a high-tech company like Nvidia, which is the leader in the AI space, and then you have gold, which exists since the beginning of time.

I just find that funny, you know? Gold this year has been up more than 30% outperforming both the S&P and NASDAQ. And now Silver is getting in on the action. The price of silver jumped to over $33 per ounce. the highest level since 2012. I mean, I said this on last week's episode, but I'm not really a big fan of investing in precious metals like gold and silver because, you know, they're just a shiny rock that doesn't really make any profit or pay dividends, so I prefer to invest in companies that do those things. But it's hard to ignore gold and silver right now. Now, analysts are pointing to a couple

reasons on why gold is going up right now. Gold has historically been a safe haven asset. So when there's uncertainty in geopolitical tensions around the world like there is right now, investors tend to buy gold. On top of that, central banks all over the world are also buying gold in record numbers. And finally, a Bank of America analyst points to the concerns over U.S. government's debt levels and how these levels are only expected to increase over time. No one's getting the U.S. debt under control here. And that's making investors increasingly nervous, resulting in them pouring more money into gold. So a lot of factors are going into the gold rally right now. It'll be interesting to see how long the gold rally last, but both gold and silver are definitely having a moment right now.

Let's run through some headlines. Let's start with Nike. They announced yesterday that they are renewing their jersey partnership with the NBA and WNBA for another 12 years. Their current deal was signed back in 2017 and it was set to expire at the end of next season. And it was estimated to be worth around a billion dollars. This time around the deal is valued at much bigger than that, according to CNBC. That's literally the quote that we have. It's much bigger than that.

No specifics, unfortunately. Under this partnership, Nike remains the exclusive uniform and apparel provider for the leagues, in addition to being the global content partner. Now, even though that Nike's only been the official apparel provider for the NBA since 2017, I feel like the NBA and Nike go hand in hand. Maybe that's because of Michael Jordan, but the NBA and Nike have had a marketing partnership since 1992. That's the same year that Michael Jordan won his second NBA championship.

He would go on to win four more for a total of six. As far as Nike's relationship with the WNBA, they've had a deal with the W-EWW. NBA since 1997 when the league was created. And the league is becoming more and more popular these days. Shout out to the New York Liberty for winning the championship this week. So I think this is a win for Nike here. And Nike could really use that right now. Their sales are down this year. Their stock is is cut in half since their peak back in 2021. And they recently announced a new CEO change about a month ago. So this partnership with the NBA comes at a good time. But the new CEO, Elliot Hill, still got a lot of work to do to get things back in the right direction. Now let's shift gears and talk

about another iconic company, at least in my eyes, the Cheesecake Factory. They're now the target of an activist hedge fund. JCP investment management built a 2% stake in the company worth more than $2 billion, and they want to split the company into pieces. See, Cheesecake Factory has a lot of franchises under their umbrella. They own Flower Child, North Italia, the culinary dropout, and JCP investments think that those restaurant chains would perform better if they were spun off as their own company. JCP also thinks that some of these smaller restaurant brands would be worth selling off. It is kind of odd, though, that JCP investments is coming after Cheesecake Factory right now. I mean, the stock has been performing fantastic.

It's up more than 40% in the past year. Usually, these activist hedge funds go after companies that are struggling. That doesn't seem to be the case for Cheesecake Factory. So we'll see what ends up happening, but I hope they leave Cheesecake Factory alone. Let's talk about some stocks making moves today. And we're going to do some quick hitters today because all these stocks are moving because of earnings. Let's start with GM. Their shares are up this morning after the auto company beat Q3 earnings estimates and raised their outlook. The company's revenues and earnings per share

both came in higher than expected. The beat was driven by solid pricing in the U.S. with the average sticker price of vehicles hovering north of $49,000 in Q3. Great for GM, but man, cars have gotten really expensive these days. Overall, it's been a pretty great year for GM. In fact, this is the third time that GM has raised their outlook this year. GM stock is up more than 2% in pre-market trading and it's up more than 35% in 2024. Philip Morris shares are riding high after they beat their Q3 earnings and also raise their guidance due to a high demand for Zin. Zin continues to be extremely popular. Philip Morris saw shipments rise by more than 40% year over year. And the company's looking to raise prices on Zin according to Reuters. As a result, Philip Morris stock is up more than

4% on this news in the pre-market. Now on the flip side, shares of Verizon are dipping this morning after the Telecom Giant reported earnings and missed on revenue estimates due to a dip in wireless sales. So they're selling less phones, internet devices, and accessories. So not great for Verizon, and it could be potentially bad news for Apple. It could be a sign that the new iPhone 16s aren't flying off the shelves as people had initially hoped. Verizon will share more information later today about phone upgrades during their earnings call, and also Apple is expected to release their earnings on October 31st after the market closed. So we'll get a lot more information on how iPhone sales are doing next week.

Verizon stock is getting crushed this morning, though. It's down more than 5% in reaction to these earnings. And finally, Lockheed Martin's shares are trading lower despite raising their annual sales and profit forecasts. The defense contractor sees increasing demand for its military equipment as conflict in the Middle East and the Ukraine-Russia war resulted more spending for weapons. But while the company did raise their guidance for the future, Lockheed Martin did miss their quarterly revenue estimates, and they're also dealing with delays in the F-35 fighter jet program.

Lockheed Martin Stock is trading down more than 3% this morning in reaction to these earnings. Let's wrap the show with a fun fact. Chick-fil-A is getting into the content game. The six-day-a-week fast food restaurant announced their launching an app called Play, which is going to have original shows, scripted podcasts, recipes, and a ton more content. And the content is going to be family-friendly and geared more towards kids. In fact, I think one of the series is going to have their famous cow mascot. I got to say, I think this is a pretty smart move by Chick-fil-A.

The media and streaming business can be tricky and unprofitable, like we've seen with a ton of streaming companies lately, except for Netflix. But unlike those traditional media companies, which makes money by selling subscriptions or advertising, chick-fil-a is not trying to do any of that. They just want you to buy more chicken sandwiches. And they're hoping by integrating Chick-fil-A products in their content, that's going to get more people, especially kids, to want to buy more chicken sandwiches. I think it's a pretty smart move, and I bet more companies will start doing this. The Chick-fil-A Play app is expected to launch on November 18. Well, all right, guys, that's the rundown for today. Hope you guys enjoyed today's episode.

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