The Rundown - Musk's $56B Pay Package Approved by Shareholders, Dave & Buster's Slumps on Earnings

Episode Date: June 13, 2024

Stock market update for June 13, 2024.

Public.com presents the rundown. Your daily market update in five minutes. My name is Zadadmani, and today is Thursday, June 13. In today's episode, we recap the Fed meeting from yesterday and why rate cuts aren't coming anytime soon. Also, we tell you the latest on Elon's $50-plus billion pay package from Tesla. Then stick around to the end of the show to learn about how much money be real was just sold for. Honestly, it's more than I thought they would go for.

All right, let's go. The stock market continues to be on an absolute heater. The S&P and NASDAQ both finished higher on Wednesday, and that's three days in a row of making record highs. The Dow was in the red again, but nobody cares about the Dow. Now, investors were loving the good inflation news that we got yesterday. The May CPI report showed that inflation in May was essentially flat when you compare it to April, and it was up 3.3% from a year ago.

But that's lower than what economists had forecasted. Also, core CPI, which excludes volatile items like food and energy, increased at its slowest monthly pace since 2021. So you could see why investors were getting pretty hyped yesterday following this inflation report. But if you thought that cooling inflation would mean a rate cut anytime soon, yeah, it's probably not going to happen. Yesterday afternoon, the FOMC meeting wrapped up with a press conference from Fed chair, Jerome Powell, and no surprise here, but the Fed is not cutting rates,

and they might not cut rates for a while. The Fed is now projecting only one rate cut this year. I mean, I've been saying this for months now. I don't think we get any rate cuts in 2024. And it's hard to blame the Fed for not cutting here, you know? They think they're in a good spot right now. Interest rates are high enough to where inflation continues to move lower, while other parts of the economy remains strong, at least according to the data.

Job market continues to be strong. GDP is growing, so the Fed sees no reason to cut rates anytime soon, especially since inflation isn't fully backed down to the Fed's 2% target. So I think the current Fed rate of 5.25 to 5.5%, it's here to stay for a while. In fact, I think the most interesting comment that Jerome Powell made was that rate aren't likely to return to pre-pandemic levels, which is around 1 to 2%. I mean, they went to 0 during the pandemic. But before the pandemic, rates were around 1 to 2%, which is considerably lower than what it is at today. So kind of a bummer for anyone that was hoping to get a cheap mortgage, that might not happen for a long, long time.

Overall, though the stock market didn't get spooked by Jerome Powell's comments. And this might make investors feel pretty good because we just got another piece of inflation data, this time the PPI report, which is the whole. Wholesale prices, that unexpectedly dropped by 0.2% in May compared to April, which means that wholesale prices went down. Economists were expecting a 0.1% increase. So we've gotten back-to-back days of encouraging inflation data. It's one of those weeks where you want to check your portfolio. Let's run through some headlines, starting with Elon Musk. It looks like Elon got his money. Elon announced that Tesla shareholders would approve his $56 billion pay package that was up for vote at 10,000. Tesla's shareholder meeting this week.

Elon's compensation deal would boost his ownership of Tesla to north of 20%. Currently, it's around 13%. Elon previously had said that he was not comfortable building out AI at Tesla without a larger stake in the company, so I'm sure that Tesla investors are hoping that this additional ownership gives Elon the incentive that he needs to start working on that AI stuff at Tesla now. On top of the approval of the $56 billion pay package, Elon also said he expects shareholders to approve Tesla's reincorporation in Texas away from Delaware.

All this will become official today at Tesla's annual shareholder meeting, which is set to begin at 4.30 p.m. Eastern time. Tesla's stock is up more than 6% in the pre-market in reaction to this news. It looks like Elon's going to be sticking around Tesla. There was some real worry that he would leave if he didn't get his money. Let's shift gears and talk about Sony Pictures. This Hollywood studio is buying Alamo Draft House, the seventh largest movie theater chain in the U.S. The most interesting about this deal is that this is the first time in more than 75 years that a Hollywood studio, is going to own a movie theater chain.

Because between 1948 and 2020, it was illegal for them to do that. The ban was due to something called the Paramount Decree, but lawmakers ended up terminating that restriction back in 2020. Now, this Paramount Decree was originally put in place back in 1948 to break up the monopolistic practices of big Hollywood studios. Back then, big movie studios would produce the movies and distribute them because they owned the movie theaters as well,

which means they controlled every aspect of the business. Kind of like a monopoly, right? So this meant that independent movie theaters couldn't compete with the big boys and independent movie producers also couldn't get their movies shown on a lot of movie theaters that were owned by the big studios but these days things are a lot different there's so many ways to distribute movies now including streaming so this restriction was lifted back in 2020 so maybe we'll see more movie studios by movie theater chains now it's not like movie theater chains are a great business now what makes alamo draft house a little interesting is that they were one of the first to do

dine in movie theaters almo draft house was pretty popular here in texas i remember going to my first one they served you dinner while you watched a movie. Pretty cool concept back when I first tried it over a decade ago. Now I feel like there's a lot of movie theater chains that do that. These days, it's just easier to watch a movie at home and order Uber Eats. Probably cheaper than going to the theaters too. Let's talk about some stocks making moves today. Starting with Broadcom.

Shares of the semiconductor company were a big in reaction to their earnings report beating on both top line and bottom line. Revenies were up 43% from a year ago to $12.5 billion. Broadcom is another one of those semifference. my conductor companies that's getting a lot of hype because of AI. Now, they don't make the AI chips like Nvidia does, but they do provide other components for data centers that companies, especially big tech companies, are spending a ton of money on upgrading right now to run AI applications. Broadcom expects their business to continue growing and raise their forecast for

the year. Oh, and they also announced a 10 to 1 stock split. Investors love the sound of that. The stock is up more than 14% in the pre-market. Company not doing so great this morning is Dave and Busters. Shares of the adult Jackie Cheese are down. after missing on first quarter earnings. The company points to challenging economic conditions like the price of food and other essentials going up. So I guess people are cutting back on going to the arcade and playing ski ball with their friends.

Investors did not like the sound of that and shares are down more than 10% in the pre-market. And you know what? This is partially my fault too. I used to go to Dave and Busters at least twice a year, but ever since having my second kid nine months ago, I haven't gone. So you know what, Dave investors?

You can just blame my nine-month-old son for the disappointing earnings. All right, let's wrap the show with a fun fact. Be Real was sold for 500 million euros yesterday to a French app developer voodoo. Now, I'm sure you guys remember Be Real. It was the app that gives you like two minutes to take a photo once a day. I mean, it was all the rage back in the summer of 2022. And I downloaded it to try it out.

And I'll be real with you guys? It got kind of boring after like three weeks. And the numbers showed that it was just a fad because the popularity peaked in October of 22 at 15 million monthly active users and then dropped to less than 6 million by March of This is per a report from the platformer newsletter. But, you know, shout out to Be Real for still getting a 500 million euro bag. That's pretty impressive. It also puts things into perspective when you think about how crazy it was at Facebook,

bought Instagram for just $1 billion back in April of 2012. That has to be one of the best deals of all time, right? All right, guys, that's the rundown for today. Hope you guys enjoyed today's episode. If you did, please give us a five-star rating on Apple and Spotify. The ratings really do help the show. It's been an action-packed weekend. We're getting pretty close to the end.

you guys so much for listening. Shout out to Connor and Mike 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 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,

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