The Rundown - JetBlue-Spirit Merger Blocked, Apple Tops Samsung in Smartphone Shipments

Episode Date: January 17, 2024

Stock market update for January 17, 2024. Consumers Start 2024 on Strong Footing After a Jolly Holiday (WSJ) Judge blocks JetBlue takeover of Spirit Airlines (Axios) Apple back at #1 in Smartphone Shipments (businesswire) Impinj preliminary Q4 2023 (Impinj) The $65 Million Perk for CEOs: Personal Use of the Corporate Jet Has Soared (WSJ)

Welcome to the rundown, your daily market update in under five minutes. My name is Zadmani, and today is Wednesday, January 17th. Today, we're going to be diving into economic data from December. Spoiler alert, December was another strong month for consumers. We're also going to be talking about the DOJ blocking the Jet Blue Spirit Airlines merger and also Apple overtaking Samsung. Then we wrap the show with market movers and a fun fact. All right, let's go.

Let's start with a quick recap of stocks on Tuesday. trading day of the week was not a great one. The Dow, S&P, NASDAQ were all down to start the week. And not just that, the 10-year treasury yield climbed above 4% for the first time this year. The drop in stocks and the rise in the bond yields might have been a reaction to Federal Reserve Governor Christopher Waller's comments. In a speech on Tuesday, he pushed back against the market's expectations that the Fed will cut rates six times this year. And look, when Fed officials talk, the market tends to listen and react. Investors have been expecting a rate cut from the Fed starting in March. But now there seems to be some real chatter that the Fed might hold off on cutting

rates until later in the year, especially with the economy continuing to show signs of strength, more on that in a bit. Stocks continue to slide today as all three major indices are in the red at the time of this recording, around 1130 Eastern. All right, let's run through some headlines. And let's start with the economic data, because it looks like the holiday shopping season was stronger than expected. Retail sales were up by 0.6%, which was better than the 0.4% that the economic nerds were expecting. This is yet another data. point that consumer spending continues to stay strong. And it gives the Fed another reason to hold off on cutting rates. Because if consumer spending continues to outperform expectations without the Fed having to cut

rates, then maybe they'll just wait. Let's talk about the Spirit Airlines JetBlue merger because a federal judge is blocking JetBlue from buying Spirit Airlines. Now, I almost forgot that this deal was happening because it was announced 18 months ago. JetBlue agreed to buy Spirit Airlines for $3.8 billion back in July of 2022. And the Department of Justice was like, wait, hold up, and sued to block the deal because they said that it violated antitrust laws. Now, JetBlue was making the case that they need to buy Spirit Airlines to compete with the bigger airlines in the U.S., like Delta, United, American, and Southwest.

A JetBlue Spirit Airlines merger would become the fifth largest airline in the U.S. But after months in court, a federal judge just didn't see it that way and agreed with the Department of Justice saying that the deal would be anti-competitive and bad for consumers. I guess the judge was worried that if Spirit Airlines, gets taken over by JetBlue, that there would be no way for people to buy $39 flights to Vegas or Miami. I'm not going to lie, Spirit Airlines came in clutch for me in my early 20s. So this was a rare W for the Department of Justice here when it comes to blocking mergers and acquisition. And it's also a win for people trying to fly to Vegas for $50. As long as you don't bring a bag,

okay? Because that's extra. Now when this news came out, Spirit Airlines stock dropped more than 47% on Tuesday, and JetBlue stock actually jumped more than 5%. Let's talk Apple real quick, because Apple is now the number one smartphone maker in the world. Apple might not be the most valuable company in the world anymore because they lost that title to Microsoft earlier this year. But they did overtake Samsung to be the top smartphone maker in the world for 2023, according to the IDC. Apple shipped 234.6 million iPhones versus 226.6 million for Samsung.

This might be a surprise to some, but 2023 was actually the first time that Apple has been the number one smartphone maker ever. Samsung has been the top smartphone maker since 2010, and before that, it was companies like Nokia or Rim, which is the maker of BlackBerry. You know, BlackBerry really dropped the ball when it comes to smartphones. Like, how are they not still in the market today? While I'm sure that Apple is happy to have this title as a top smartphone maker in 2023, it still doesn't change the fact that Apple hasn't grown their revenues in four straight quarters, which has caused banks to downgrade Apple stock to start the year. But hey, they have that Apple Vision Pro VR headset thing coming out later this year. So something to look forward to.

And finally, let's talk about stocks that are making moves today. Impinged, ticker symbol PI, which is a manufacturer of RFID devices and software, is up more than 10% today at the time of this recording around noon Eastern after saying that they expect their Q4 revenues to be more than $70 million, which is higher than what was expected. Also, Draft Kings, ticker symbol DKNG, is up more than 4% today at the time of this recording as well. And as for losers, Solar Edge, ticker symbol SEDG, is down more than 5% at the time of this recording around noon eastern. The solar company was downgraded by Barclays. And Rivian is another loser today.

The EVMaker stock is trading down more than 6% at the time of this recording after being downgraded from hold to buy from Deutsche Bank. Okay, let's wrap up the show with a fun fact of the day where I share something that I thought was kind of interesting. Today's fun fact, companies in the S&P 500 spent $65 million for their executives to use corporate jets for personal travel in the year 2022. That's up more than 50% from 2019. And one of the top spenders was Meta, which spent $6.6 million in 2022 for personal flights for Zuck and then executive Cheryl Sandberg.

You know, this makes a ton of sense, especially for Meta because I don't know if you guys have seen Zuck's latest Instagram post, but this guy is building a bunker in Hawaii. And he's raising a cattle farm in Hawaii. So I'm sure he has to make that flight from Silicon Valley over to Hawaii. Also, meta stock is like back to almost all-time highs again. So I'm sure shareholders aren't going to be too concerned about $6 million spent on a private jet. All right, guys, that's all I got for you guys today. Thank you guys so much for listening, and I'll see you guys back here tomorrow. This is Public Live, your real-time resource for news events and trends in the markets.

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