The Rundown - McDonald's Sales Fall for 1st Time Since 2020, Tesla Named Top Auto Stock by Morgan Stanley

Episode Date: July 29, 2024

Stock market update for July 29, 2024.

Public.com presents the rundown, your daily market update in five minutes. My name is Zadadmani, and today is Monday, July 29th. In today's episode, we recap last week's market performance and get you ready for one of the most important weeks of the year. Also, we break down the latest earnings from McDonald's and tell you how much money the new Deadpool movie made over the weekend. Then stick around to the end of the show to find out how much money Olympic athletes get for winning gold. It's not as much as you think, depending on where you're from. All right, let's go. Last week was another tough one for the stock market.

Both the S&P and NASDAQ were down for the second week in a row, dragged down by poor performance from tech stocks. The NASDAQ is now down nearly 7% from when it made all-time highs back on July 10th. Small caps, on the other hand, continued to rally. The Russell 2000, which is made up of small-cap stocks, was up nearly 3.5% last week, and it's up more than 10% since July 10th. So that money coming out of big tech seems to be going into small caps. That's called a good old-fashioned market rotation.

Now, this is going to be a pivotal week for the markets, especially big tech, because over 160 S&P 500 companies are reporting earnings this week, including the big ones like Apple, Amazon, Microsoft, and meta. The expectations for these companies are sky high, but even if these companies crush their earnings, their stock could tank. I mean, just look at what happened to Google last week. Right now, investors aren't just looking at revenues and profits. They're also looking at how much money these big tech companies are spending on AI, and if they're ever going to see a return on that investment.

So something to keep an eye on as these big tech companies report this week. Now, on top of all the earnings coming out this week, the Fed meeting kicks off on Tuesday and concludes on Wednesday with a Jerome Powell press conference. Now, some are saying that we might actually get a rate cut from the Fed this month. I don't think that will happen, but the Fed could set the table for a rate cut in September. Either way, I think we're going to get a pretty interesting press conference from Jerome Powell. I don't think it's going to be the same old, same old. I think we're going to get a little bit more information on the feds thinking because I've never seen so much optimism for a rate cut since earlier this year.

So really looking forward to seeing what Jerome Powell has to say this week. Really looking forward to seeing all the earnings come out this week, especially the big tech earnings. I'm loaded up on coffee and energy drinks. I'm locked in for the week. We'll be recapping it all here on the rundown. So make sure you guys are subscribed to the podcast. Hit that notification bell on Spotify so you're notified as soon as an episode goes up every

morning. I can already feel my heart rate going up. Let's run through some headlines. McDonald's just reported their second quarter earnings, and it wasn't so great. They missed on both revenues and profit estimates for the quarter, driven by declines in same store sales. McDonald's same store sales declined by 1%,

which is a pretty big deal because McDonald's hasn't experienced a drop in that metric since 2020. Now, one of the reasons why this could be happening is because McDonald's has been raising prices for some time now. The cost of its menu items are now up nearly 40% since 2019, and consumers are cutting back as a result. But lately, McDonald's is shifting more to offer discount meals. Starting in late June, McDonald's offered a $5 value meal, which gives you a burger or a make chicken, four piece chicken nuggets, fries, and a drink.

I mean, sounds like a pretty good deal, to be honest. They rolled that out last month, five days before the end of the quarter. We're not going to know how successful that value meal is in driving customers back until they report their next earnings results. But it looks to be pretty popular because the value meal was only supposed to last around a month, but the company has decided to keep it going, at least for now. So it looks like consumers were starting to get sick of the high prices. and they're starting to come back once they see a good deal.

Other fast food chains are starting to offer value deals as well. Burger King, Wendy, Starbucks, and more have all started to roll out of some sort of value meal. So we'll see if customers end up coming back. We have to wait about three months for the next round of earnings reports. Switching gears a bit, let's talk about Disney and Deadpool. Movie theaters were packed this weekend because the new Deadpool movie made over $205 million at the domestic box office in its debut weekend. That's the highest rated debut for a rated R movie.

Deadpool and Wolverine just straight crushed it. The estimates for the weekend was around $170-ish million, and they made over $200 billion. And just to give you some perspective here, the previous record for the highest debut for a rated R movie was the first Deadpool movie, which was released back in 2016. It made around $132 million in its opening weekend. So now the record is over $200 million,

and I got a feeling this record is going to stick around for a while. Disney's having a great summer when it comes to the box office in all categories. Inside Out 2 has made over $1.5 billion. worldwide. It's the highest ever for an animated movie. And now Deadpool making a record 200 million opening weekend. So it's got something for the kids. It's got something for the parents. Got something for superhero fans. I mean, they're covering all categories here. By the way, I saw Deadpool over the weekend. I mean, it wasn't bad, but I was surprised to see it make that much money, you know? I guess it was kind of cool to see Wolverine back on the screen. Maybe I'm just being a

hater, but you can't really argue with the numbers, you know? Let's talk about some stocks making moves today. Tesla shares are up in the pre-market this morning. After more, Morgan Stanley named the EV Giant as the top pick on its automobile list. Morgan Stanley thinks that Tesla's $600 million cost-cutting efforts has pushed the company to be able to maintain positive cash flow production. Tesla previously cut about 10% of its global staff, which is about 14,000 employees, which is expected to save the company around $1 billion annually. Morgan Stanley holds a price target of $310 per share for Tesla compared to the current price

of around $220. Tesla stock is up around 2% in the pre-market on this news. On the flip side, Abbott Labs stock is down this morning. The maker of the Simulag baby formula has been ordered by a jury to pay $495 million in compensation and damages for failing to warn that its baby formula could increase the risk of developing deadly bowel illness. And this was just the first of over 1,000 similar cases the company is facing. And as a result, the stock is down more than 5% in reaction to this news in the pre-market. All right, let's wrap the show with a fun fact.

The Olympics kicked off on Friday in Paris, so I thought it'd be kind of cool to give you guys an idea of how much these Olympic athletes get paid if they win the gold medal. Now, each country provides different rewards for its athletes if they win gold. The highest is Hong Kong, which gives gold medal winners $768,000. Singapore is second. They give $744,000. As for the U.S., the U.S. pays out $37,500 for gold. and $22,000 for silver, $15,000 for bronze. So it's not a lot, but fortunately, the prize money is tax exempt. So I guess that's nice. I got to say, the Olympics is the perfect thing to have on in the background.

I had it on all weekend on my TV. I probably watched maybe a couple hours, but it was just on the entire day for most of the weekend. Like, it was cool to just see a couple minutes of these sports that I typically would not watch. Water polo, super sick, handball, rugby, like, it was just cool to see a few minutes of action here or there. We'll probably have a few more Olympic-related fun facts for you over the next couple weeks. Well, all right, guys, that's the rundown for today. Action pack week, like I said in the intro. We're going to be covering earnings.

We're going to be covering the Fed meeting. There's a lot to talk about this week. Make sure you guys are tuned into the podcast. This is the week to lock in. If you guys enjoy the show and have like 12 seconds, please hit us with a five-star rating on Apple and Spotify. And don't forget to vote in our Spotify poll. We put up a poll every single day.

That engagement really does help the show. Thank you guys so much 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.

Run-down 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. Respective 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.