The Rundown - Netflix Shares Pop on Earnings Beat, Tesla Under Investigation for FSD Software

Episode Date: October 18, 2024

Stock market update for October 18, 2024.

Public.com presents the rundown. Your daily market update in five minutes. My name is Zadadmani, and today is Friday, October 18th. In today's episode, we recap Netflix's blowout earnings and tell you about the market's reaction. We also tell you about the latest investigation to Tesla's full self-driving tech that could force a recall. Then stick around to the end of the show to find out why Apple stock is up and the crazy reason why Meta fired over two dozen employees. All right, let's go. Thursday was a flat day for the stock market.

The S&P 500 did make intraday highs, but then end up giving up those gains to finish the day slightly in the red. And the NASDAG finished the day a 0.04%. So, yeah, pretty much flat. The Dow did close that new record highs, but nobody cares. Gold was back to rallying this week, hitting a new record high yesterday. It's currently trading at almost $2,700 per Troy ounce. You know, uncertainty around the election and geopolitical tensions have investors running, to gold right now. It's considered a safe haven asset. Now, I'm not going to lie, I've kind of been a

gold hater in the past because, you know, it's just a shiny rock and I tend to prefer to invest in stocks instead, but it's hard to hate on gold this year. It's up more than 30% outperforming both the S&P 500 and NASDAQ. I feel like this year, anytime I started hating on something, it ended up making record highs. Gold, the Tao Jones. So maybe I'm the problem here. If you guys have a certain stock that you want me to start hating on, just let us know in the comments. And I'll start being a and maybe it'll hit all-time highs as well. You can actually leave a comment on Spotify, so just let us know. Let's run through some headlines.

And we have to start with Netflix earnings. Netflix reported earnings yesterday after the bell, and they crushed it again. Netflix revenues were up 15% to over $10 billion. They made over $2.4 billion in profit last quarter, which beat estimates. In fact, it was Netflix's most profitable quarter ever. On top of that, they added 5.1.1%.

million subscribers, which was more than expected, and they now have over 283 million subscribers worldwide. I mean, just up and down, solid quarter for Netflix, and it's pretty clear that the password crackdown and price increases over the last year or so definitely helped Netflix's business. Despite them getting a lot of hate and people threatening to cancel their Netflix subscription, nobody did that. Netflix added more subscribers and made more money. Netflix knows that we're addicted, okay? And Netflix isn't done making moves when it comes to their business strategy.

Remember, Netflix introduced an ads tier about a year ago, and that strategy seems to be paying off. Netflix's ads tier grew by 35% quarter over quarter, which was slightly less than what they expected, but still solid. And Netflix now says that half of all signups are for the ads tier membership. So Netflix is prioritizing their ads business, and don't be surprised if they become a dominant player in advertising soon. And don't forget, Netflix is going to be doing more and more live events. They're actually going to be broadcasting an NFL game this year. first time they've done that. I mean, I know it's been pretty clear for a while now, but Netflix has run away with the streaming worse. Like, it's not even close. The revenues continue to climb,

they're making record profits, and they're still adding more subscribers. I'm, this is over. Netflix has won. Investors definitely seem to think so. Netflix stock was up 7% this morning in reaction to these earnings. By the way, starting next year, Netflix won't be reporting the subscriber numbers anymore. They want investors to focus more on revenue and profit. I think Wall Street was already doing that when it comes to these streaming companies, but this just kind of solidifies that. Also, I think we're going to see more and more companies do password crackdowns or just membership crackdowns.

You know, Disney's already starting to do it. Costco is starting to do it now. I think these companies saw the success and pay off by Netflix and they're going to want to do the same thing. I probably shouldn't say this on a podcast where thousands of people listen to, but I'm still sharing passwords for Netflix. I don't know how much longer it's going to last, but I'm still safe. I'm probably going to get an email from Netflix next week now.

Let's shift gears and talk about Tesla. Tesla's full self-driving system, also called, FSD is under investigation by federal safety regulators. The National Highway Traffic Safety Administration is opening a probe into 2.4 million Tesla vehicles after receiving four reported collisions, one of which was fatal. According to the reports, the crashes occurred when the Tesla faced reduced roadway visibility, resulting from sun glare, fog, or dust. Now, this is just preliminary, but if they find that the software posed any risk of danger,

they could force the Tesla to be recalled. Last year, Tesla recalled more than 360,000 vehicles that were equipped with the FSD software after the NHSTA found safety risk. So something to keep an eye on, especially if you own a Tesla like I do. I mean, every time I've used the FSD, when it works, it's like magic, but there are a couple times where I just freak out. I'm not going to lie. Let's talk about some stocks making moves today. Apple shares are up more than 2% this morning after a report indicated a strong launch for the iPhone 16 in China. Sales of the iPhone 16 were 20% higher in China in the first three weeks of launch compared to the sales of iPhone 15 in the same period.

This is according to a report from Counterpoint Research. Now, what's interesting is one of the biggest selling points of the new iPhone 16 is Apple Intelligence. Well, Apple Intelligence won't be available in mainland China due to regulatory issues. Now, to be fair, Apple Intelligence hasn't come out in the U.S. yet either. It's supposed to come out in late October, so hopefully any week now. But seeing a 20% jump in sales for the iPhone 16 in China, despite never getting Apple intelligence, is a positive sign for Apple. And it could be a positive sign for how iPhone 16 sales are doing in the U.S. Apple reports earnings on Halloween after the market close.

Terrible time to do that, but whatever. That earnings report should tell us how the iPhone 16 sales have been doing in the States. I mean, talk about trick-or-treat. That Apple earnings report is going to be the ultimate trick-or-treat. My costume this year should just be Tim Cook. I'm going to dress up as Tim Cook, take my kids trick-or-treating, while I'm going to be. while listening to Apple's earnings call. That's perfect. Now this morning, we're seeing CVS shares plummet after the pharmacy giant announced the replacement of their CEO Karen Lynch.

Karen Lynch will be replaced by David Joyner, who was previously in charge of the pharmacy service unit. CVS has had a lot of struggles this year. They're struggling with their healthcare unit. Their retail stores are also struggling, and they also are facing pressures from an activist investor. So now they're doing this leadership change to maybe shake things up and turn things around. But all this uncertainty at the company is causing some investors to bail. Shares are down 10% on the announcement of this leadership change. Let's wrap the show with a fun fact. This story blew my mind when I saw it.

Meta fired over two dozen employees for abusing their $25 meal credits and using that money instead to buy personal items like toothpaste, wine glasses, and laundry detergent. This is according to reporting from the Financial Times. And what's crazy is that the median pay for meta, employees is $379,000, according to an SEC filing. So it doesn't sound like these employees needed to game the system, but they still did and they got caught. And now unfortunately, they're going to be looking for a new job. Man, that's, that's brutal. I'm actually curious to know what you guys think. Do you think these workers deserve to get fired for abusing the meal credit system? I feel

they should have gotten at least a warning before being fired. Let us know what you guys think. We'll make this the poll on Spotify. So tap today's episode and vote in today's poll. tech employee these days is definitely a different vibe than it was like three, four years ago. Well, all right, guys, that's the rundown for today. That's the rundown for this week. Another fantastic week. It looks like the stock market is headed for the six straight weekly win. And things are going to get more interesting over the next couple weeks as more and more companies report earnings, especially the big tech companies. So if you guys haven't already, make sure you guys are subscribed to the podcast and hit the notification bell on Spotify if you want

to be notified as soon as an episode goes up every morning. And if you guys have like 15 to 20 seconds, consider giving us a five-star rating on Apple and Spotify, leave a comment on Spotify, vote in the polls. All that engagement really does help us out. It helps other people find the show. Thank you guys so much for listening. Shout out to Mike and Connor for all the help behind the scenes. Have a great weekend, everybody, and we'll see you guys back here on Monday. 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.

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