The Rundown - Musk Wins Big During China Trip, Domino's Delivers Hot Q1 Results

Starting point is 00:00:00 Public.com presents the rundown, your daily market update in five minutes. My name is Zadadmani, and today is Monday, April 29th. In today's episode, we get you ready for another action-pack week. We got Amazon, Apple earnings, we got Fed meeting, a lot to look forward to. Also, we tell you why Tesla investors are a hype that Elon went to China over the weekend. And then stick around to the end of the show to learn the shocking stat about the number of stocks on the stock market. All right, let's go. Well, guys, the stock market made a nice comeback last week.

Starting point is 00:00:31 The S&P 500 was up more than 2% and the NASDAQ was up more than 4%. Both indices having their best week of the year. And we could probably thank Google and Microsoft for that because both those companies reported earnings on Thursday and crushed it. Go listen to Friday's episode if you guys want to recap with those earnings. But yeah, investors were feeling pretty good after those earnings and it pushed the rest of the markets up with them. I mean, I was just happy to finally see some green on the screen after a brutal start to the month. Now, we are still in the smack dab middle of earnings season. Last week was full of fireworks.

Starting point is 00:01:01 Well, this week might be even more. We have earnings from Amazon and AMD on Tuesday after the market closed, and then Apple reports earnings on Thursday after the market closed. And then sandwich in between these two is the Fed meeting, which wraps up on Wednesday afternoon with a Jerome Powell press conference. Can't wait to see what color tie he's going to wear. Is he going to keep rocking the purple tie or is he going to switch it up this month? But I think more importantly, people care about what he's going to say about interest rates.

Starting point is 00:01:26 Now, the market isn't expecting the Fed to make any interest rate changes this month, but investors probably want to know what is the Fed's vibe around interest rates now? Are we going to have interest rate cuts at all this year? Because, you know, with new data showing that inflation is continuing to be annoyingly sticky, what is the Fed's reaction to all of this? We'll find out on Wednesday afternoon, and we're going to cover all of it this week on the rundown, along with the big tech earnings. So make sure you guys are tuning in every day to stay in the loop.

Starting point is 00:01:49 All right, let's run through some headlines. Let's start with some Tesla talk. Tesla CEO Elon Musk made a surprise, visit the China over the weekend on a mission to roll out Tesla's self-driving technology in China. And he left with a major win because he cleared hurdles to allow full self-driving to roll out in China. Chinese authorities said that the Model 3 and Model Y are compliant with data security requirements, and Tesla also reached a deal with Baidu to access the Chinese tech company's mapping license

Starting point is 00:02:18 for data collection on Chinese public roads. So this means that Tesla cars can gather data from its surroundings like road layouts and traffic signs. And Tesla investors were hyped after this announcement because Tesla's full self-driving software has been available in China for four years, but it was restricted. But now with this mapping licensing deal, full self-driving can now be used on Chinese roads. And that can make Tesla's a more attractive option for consumers in China, where Tesla has sold more than 1.7 million cars since entering the market. Tesla stock is up more than 13% in pre-market trading because of this announcement. It's a big win for Tesla because investors had been concerned about Tesla's declining EVs

Starting point is 00:02:55 sales after deliveries in the first quarter fell for the first time in four years. And the full self-driving technology is supposed to be a big upside that investors are hoping to see. That's why some people call Tesla a tech company. So we'll see how the rollout goes, but big win for Tesla today. Not a great day for Paramount CEO Bob Backish, though. It looks like he's going to get the boot. Bob Backish is expected to get fired by the board as early as today. And investors are sending the stock higher as a response to this news. That's never a great feeling if you're the CEO when stock goes up when you get fired. Right now, Paramount is in deep acquisition talks with Skydance Media and Redbird Capital, and Bob Backish reportedly hasn't been a big fan of this deal behind the scenes. He says the deal

Starting point is 00:03:33 could dilute common shareholders. But controlling shareholder and executive chair, Sherry Redstone, has been unhappy with Babakish's strategic moves, like the failed sale of BET and a decision to not offload showtime. Paramount's going to report earnings after the bell today, and Bob Backish is not expected to be on the call, so the writing might be on the wall right there. Let's talk about some stocks making moves today. Domino's stock are up more than 6% this morning after the company reported solid earnings this morning. They beat expectations on both revenue and profit. Global sales jumped by more than 7% compared to a year ago and most of that growth coming from the U.S. market where sales grew by 5.6%, which was way above the 1% growth in international

Starting point is 00:04:13 markets. The growth in the U.S. has mostly been driven by delivery and carryout, which isn't surprising because you're not really going to a Domino's to wine and dine, you know? Domino's CEO made a point to highlight that order growth was happening across all incomes. Domino's also highlighted their partnership with Uber, which seems to be going pretty well. They started working with Uber 8's last year and started promoting in their app in Q1 of this year. Domino's now expects Uber will account for 3% of total sales by the end of the year. Investors like what they heard and Domino's continues to crush it. The stock is up more than 20% for the year and up more than 50% over the last year. On the flip side, company not doing so good this morning is Southwest Airlines.

Starting point is 00:04:49 The investment bank Jeffries downgraded Southwest Airlines to underperform. The company reported disappointing Q1 earnings. They reported a loss of $231 million in Q1, which is not great. But they do have some ideas on how to turn things around. Southwest talked about potentially changing their boarding and seating process to help improve their financial position. This might be a controversial opinion, but I personally don't like Southwest's open seating policy, so I think I'd be okay with this.

Starting point is 00:05:14 So we'll see if they actually go through with their seating changes and if that actually results in them making more money. I'm sure they're going to charge to allow people to pick their own seats. Southwest stock is down more than 5% for the year, while the rest of the market is up 7%. So not a good year so far. Let's wrap the show with a fun fact. Today's fun fact is about the stock market.

Starting point is 00:05:32 Specifically, the number of stocks trading on the stock market because since 1996, the number of stocks in the stock market has dropped by 43% in the U.S. That's according to the World Bank. 1996 was the peak with over 8,000 publicly listed companies. Today, there are less than $4,000 publicly listed companies. There are less than 4,700 publicly traded companies on U.S. exchanges. I mean, that stat was mind-blowing to me, because I would think over the last 25, 30 years,

Starting point is 00:05:56 we would have more publicly traded companies because of all the new companies in the tech sector and all the technological innovations. But no, that's not what happened. Now, there are a few theories in why this is happening. One reason could be because of the Sarbanes-Oxley Act, the 2002, which was new regulations following the fraud and accounting scandals of the early 2000s from companies like Enron. these new regulations made it more costly for companies to go public and stay public, and that made it tough, especially for smaller companies. But the number of publicly traded companies was already starting to fall by the late 90s.

Starting point is 00:06:25 So I'm not so sure about this theory. Another reason, though, could be that companies are choosing the state private for longer because of access to private capital from venture capital. One of the main reasons companies used to go public was to raise money. Well, if companies can raise money from VC firms, there's less reason for them to go public. In fact, there are a ton of companies today. they're worth over $10 billion that are still private. Companies like Stripe, BiteDance, SpaceX, Open AI are all private. So I wonder if we ever see this trend reverse.

Starting point is 00:06:52 I mean, this year has been pretty good for IPOs, but we're still a long ways away before we get back to 8,000 companies on the stock market. Well, all right, guys, that's the rundown for today. We have another action pack week coming up. I'm excited for this week. I hope you guys are too. We're going to be covering a lot of stuff on the rundown this week. So if you guys want to be notified as soon as an episode goes up,

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The Rundown - Musk Wins Big During China Trip, Domino's Delivers Hot Q1 Results

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