The Rundown - Microsoft Raises Dividend 10%, Trump Launches Crypto Venture

Episode Date: September 17, 2024

Stock market update for September 17, 2024. Plus, check out the Leading Indicator interview with Rep. Ro Khanna!

Public.com presents the rundown. Your daily market update in five minutes. My name is Zaid Admani, and today is Tuesday, September 17th. In today's episode, we tell you about the letter from Amazon CEO that made a lot of people upset. We also tell you about the big moves from Intel to turn around the business. Then stick around to the end of the show to find out why Microsoft stock is surging and the new crypto venture that Donald Trump is launching. All right, let's go.

Stock market is off to a mixed start. this week, the S&P was up just 0.1% while the NASDAQ was down 0.5%. The Dow Jones did make a record high, but nobody cares about the Dow. As hard as it might be to believe, but the S&P 500 is less than 1% away from all-time highs. The S&P made all-time highs back on July 16th, and what's been interesting over the last couple months has been the market breadth. So not just the fact that the stock market is going up, but how many stocks are going up? The first half of the year was dominated by tech stocks and AI stocks, especially the Magnificent 7th stocks, which includes Nvidia, Apple, Microsoft, Meta, Amazon, Google, and Tesla.

Those stocks really put the entire markets on their back, and they were the main drivers of the S&P 500 and NASDAQ. But over the last couple months, the market rally hasn't been as top-heavy. It's been more spread out. In fact, since the S&P 500 hit all-time highs back in July, the max-7 stocks have collectively dropped 5% while the rest of the market is down less than 1%.

So I wonder if that trend continues. And I think the upcoming rate cuts could be a reason for that. And speaking of rate cuts, remember we have the most anticipated Fed meeting coming up. The meeting actually starts today and wraps up tomorrow afternoon with the Jerome Powell Press Conference. The press conference is at 2.30 p.m. Eastern time. As of this morning, the markets are still pricing in a 65% chance of a 50 basis cut. So that's actually more than it was yesterday. But according to our Spotify poll that we put up on yesterday's episode, a majority of you guys think the Fed will cut by 25 basis points. I'm going to go with the listeners on this one.

Let's run through some headlines. We have to start with Amazon. because Amazon CEO, wants everybody back in the office. Amazon CEO Andy Jassy sent a letter to the company yesterday and it's getting a lot of attention. The letter was also posted on Amazon's website and I read it. It's a pretty short letter about five minutes long

and Andy was not holding back. Andy Jassy thinks that Amazon has hired too many people over the last six to eight years and it's having an impact on their culture and he wants to fix that. He specifically calls out the number of managers at Amazon saying that there are too many managers and too many meetings

which is delaying decision-making, and so he wants to fix that by flattening the organization and cutting managers. He says that Amazon plans to increase the ratio of individual contributors to managers by at least 15% by the end of Q1 2025. But the big headline coming from this letter is that he's requiring employees to come back to the office five days a week starting in 2025. Now, Amazon already required employees to be in the office three days a week since May of 2023, but starting in January of 2025, Amazon employees,

has to be back in the office five days a week. Andy Jassy thinks this will further strengthen the company's culture. So being called back to the office five days a week, that's going to make some people upset. And I think that was the point of the letter. I think Amazon wants to reduce their head count without actually doing layoffs and paying severance and all that. They want people that want to work from home to quit Amazon. And it would be on brand for Andy Jassy. He took over as CEO from Jeff Bezos back in 2021. And since he's taken over, he's canceled a ton of projects at Amazon over the last three years, and in the process, Amazon has laid off thousands of employees. Now, what I'm curious to know is if other big tech companies will follow the same strategy. For what it's worth, though, Amazon stock has had a great year so far. It's up more than 20% in 2024. For example, I also want to point out that Nvidia still has a generous remote working policy, and their stock is up more than 140% this year. So just saying, let us know what you guys think about these return to office policies. We'll put a poll up on Spotify today. So go tap today's episode and vote in today's poll. Let's shift gears and talk about Intel. It's a pretty big week for Intel, because they are shaking things up.

Intel announced they're going to be separating its chip manufacturing business into a separate unit with its own board of directors. This move would give Intel the ability to raise outside capital. And beyond just that, Intel is even considering spinning off the manufacturing business into a separate publicly traded company. I mean, the manufacturing business has not been doing great for Intel. They spent over $50 billion in the past two years, but it's only resulted in a growth of 4%.

That's pretty sad if you compared to some of the other chip makers in the world. I mean, Intel's been making some pretty drastic moves to turn around the business, they plan to lay off more than 15,000 employees over the next 10 years to save $10 billion. On a more positive note for Intel, Intel did receive $3 billion from the Biden Chips Act to be used to expand manufacturing efforts related to creating chips for the U.S. government. Intel also made a deal with Amazon to manufacture AI chips for Amazon Web Services. So they got some good things going for them.

We'll see if Intel can land the plane here. I mean, they have a lot of things they've got to figure out. They're cutting costs and pausing factories, but they're also getting billions of dollars in funding and signing big clients like Amazon to build their chips, it's a lot of moving pieces. So far, the markets have been liking what they've been hearing because Intel stock is up close to 10% this week, but still down more than 50% for the year. Let's talk about some stocks making moves today. Microsoft is seeing their shares jump this morning after they announced a 10% increase

in their dividend. Microsoft is increasing their quarterly dividend from 75 cents to 83 cents a share. So that means that for every share of Microsoft that you own, you're going to get 83 cents. every quarter. But beyond just the dividend increase, the company also authorized $60 billion in share buybacks. So share buybacks and dividends, investors love the sound of that, and Microsoft shares are up close to 2% in reaction to this news. On the flip side, shares of solar edge technologies are following this morning after investment bank Jeffries downgraded the stock and lowered its price target to $17 per share. Jeffries had a poor long-term outlook for the European market, followed by

an increase in competition. European sales made up close to 64% of solar edge. solar business in 2023, but now it makes up only 37% as of Q2 this year. That is a huge change. Shares of Solar Edge are down 5% in reaction to this news. Let's wrap the show with a fun fact. Donald Trump is launching a new crypto venture called World Liberty Financial. This project was teased during a live broadcast on X, formerly known as Twitter, where Donald Trump has more than 90 million followers. Now, the former president didn't himself speak about this project, but instead he turned it over to his sons and partners to explain what they're building. It's being described as like a D-5 platform, meaning there's not going to be any centralized entity involved in the financial

transactions. So no banks, no middleman, just the blockchain. D-5 platforms have been around for a long time now. Now, the live broadcast on X was pretty light on the details, but the new crypto token tied to this platform will be called WF-L-I. So I guess we'll see where it goes from here. It seems like time traveled back to 2021 when everybody was launching a D-5 platform or something related to crypto. Donald Trump has been getting more involved in the cryptocurrency. community as of late. This is just another example of that. There have been more political figures recently calling for the U.S. to get more involved in crypto and embrace crypto. Like Congressman Roe Kana, he was on the leading indicator podcast from public.com. He explained why being pro-crypto is crucial

to win young voters during the election. He also talked about why he thinks the Federal Reserve may be acting too slowly with cutting rates. So it's a very interesting conversation. Definitely go check that out. We'll put the link in the description for that podcast. Well, all right, guys, that's the rundown for today. Thank you guys so much for listening. If you guys enjoyed today's episode, don't forget to hit us with a five-star rating on Apple and Spotify. And don't forget the vote in today's Spotify poll. 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. 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 a recommendation to buy, sell or hold that security. Run-down guests are not financial advisors and are not affiliated with public holdings or subsidiaries. You should make your own financial and investment decisions or consult. Respected professionals. Learn more at public.com disclosures. In partnership with Zayidimani, brokerage services for U.S. listed, registered securities are offered by Open to the Public Investing Incorporated, member FINRA and SIPC.