The Rundown - Nike CEO Steps Down, Microsoft Strikes Deal for Nuclear Power

Episode Date: September 20, 2024

Stock market update for September 20, 2024.

Public.com presents the rundown. Your daily market update in five minutes. My name is Zadmani, and today is Friday, September 20th. In today's episode, I'll tell you why the markets are rallying right now. Stocks, gold, crypto, it's all going up. Thank you, Jerome Powell. Also, we got a shake-up happening at Nike. Their CEO is out, and for good reason.

And nuclear power plans are making a comeback in the U.S., all thanks to AI. Then stick around to the end of the show to find out why FedEx stock is tanking and how Buffalo Bills fans will have the option to invest in their new stadium. All right, let's go. We are so back. One day after the Federal Reserve cut rates by 50 basis points, the markets were rallying, making record highs in the process. The NASDAQ was up 2.5% yesterday.

The S&P was up 1.7% and hit all-time highs. The Dow was up over 1% making new record highs. But, you know, nobody cares about the Dow. And a lot of individual stocks also had big days. Tesla pops 7%. Nvidia, Apple meta were all up almost 4%. In fact, meta and Netflix also hit all-time highs. So the vibes were good all around.

And it wasn't just stocks. Gold also hit all-time highs yesterday because lower interest rates weakens the US dollar, which is good for gold. And Bitcoin jumped 6% yesterday with prices back above $64,000 for the first time in like a month. So the reaction to the Fed rate cuts have been overwhelmingly positive.

I guess all that talk about a 50 basis cut causing a panic. That hasn't material. realized so far. Looks like we all might be headed for a soft landing. But hey, with the way the markets are acting these days, the vibes could change again next week. Let's run through some headlines. Nike is replacing their CEO. Nike's current CEO, John Donahue is retiring. And I'm putting air quotes up when I say the word retiring because I got a feeling he was asked to hit the beach early. See, Donahue took over as Nike CEO back in January of 2020. And he's more of a tech guy. He's not really a

retail guy. His work experience includes companies like eBay and Service Now. So when he took over as Nike, it was always kind of a weird fit. During his tenure, he shifted Nike to be more of a direct-to-consumer company, boosting their e-commerce business, and it really hasn't worked out. Recently, Nike sales growth have evaporated with revenues rising less than 1% in their most recent fiscal year. And as a result, Nike stock is down more than 20% this year. So Donahue is out, and the guy replacing Donahue is Elliot Hill. And this dude is a Nike lifer. Like, go look up this dude's LinkedIn. He started off as an intern at Nike in the 1980s, working his way up as president of the company's consumer division before retiring in 2020.

So he's taken over to the company in October, so we'll see if he can turn things around and reestablish Nike's image as a dominant consumer brand. The initial market reaction has been positive. Nike shares are up more than 7% on this announcement. Now, Elliot Hill will have some challenges. There's a lot of companies coming into the running shoe space like Hoka and OnCloud. So Nike needs to start innovating again. Investors seem to be pretty optimistic so far. And that's got to be a great feeling. You know, Bing announces the new CEO and seeing the stock price pop,

that's got to feel pretty good and feel pretty bad if you're the CEO being replaced. Let's shift gears and talk about something else trying to make a comeback. Nuclear Energy. Constellation Energy is seeking approval to restart operations of a nuclear power plant in Pennsylvania. And they want to sell that nuclear power to Microsoft to run AI. That sounds like an ad lib headline, but no, this is real. Constellation Energy is looking to restart the Unit 1 reactor, which is located on the famous 3-mile island in Pennsylvania. This reactor was shut down back in 2019.

But it's expected to be up and running by 2028, with plans to request operation approval through 2054. Microsoft is going to buy all this nuclear power to help run its AI-powered data centers, which require a lot of energy. And it's not just Microsoft making deals. Amazon and Oracle also recently made deals to obtain nuclear energy to help run their AI power data centers. So there's a lot of energy demand these days. That might lead to a resurgence in nuclear power in the U.S. In fact, this will be the second nuclear power plant to restart operations in the U.S. The first being the Palisades nuclear power plant in Michigan,

which is expected to restart operations by next year. So yeah, keep your eye out on the space. Shares of Constellation Energy are up more than 9% on this news. Now, just to clarify, this nuclear reactor that's being restarted on Three Mile Island is not the one that famously melted down in 1979, which was the worst nuclear reactor. nuclear accident in U.S. history. This is a different reactor and like I said, it was in operation until 2019. Let's talk about some stocks making moves today. We already told you about two of the

big winners today, Nike and Constellation Energy. We'll add CrowdStrike to that list. Shares of the cybersecurity firm are up this morning after Goldman Sachs upgraded the company's price target to $324 a share. Currently, CrowdStrike trades at around $290 a share. CrowdStrike is up 5% on this upgrade. The stock is still down more than 20% since before their major outage this summer. That famously took down computers all over the world, airports, banks, train stations. Yeah, people don't forget. Now, a stock not doing so great this morning is FedEx. Shares are down big after the company reported disappointing earnings for their last quarter

and cut their outlook for the rest of the year. The company's revenues and profits last quarter came in below estimates with the FedEx CEO saying the company had a challenging quarter from weaker demand, especially in the U.S., as customers pulled back on spending. on priority shipping services. FedEx expects business to be slower than what they previously projected in the year ahead. Shares of FedEx are down more than 14% this morning, which is brutal. Let's wrap the show with the fun fact. Fans of the Buffalo Bills NFL team can buy bonds to help fund the team's new stadium. See, the Buffalo Bills are in the process of constructing

a new $1.6 billion stadium for the football team and scheduled to open in 2026. Now, $250 million of the stadium is going to be paid for by Erie County, where the stadium is located. And they're selling bonds to help finance that cost. So fans will have the option to buy bonds starting at $5,000 that will pay them interest for 25 years. Maybe I'm in the minority here, but I'm not a big fan of taxpayers paying for stadiums. A couple weeks ago, we talked about how valuable these sports franchises have become. The Buffalo bills are worth over $5 billion.

But, hey, I get it. Fans love their teams, and they want to make sure they stick around. so they're willing to finance a new stadium. What's interesting, though, is that the bond buyers won't know what the interest payment is until after the bonds are sold. I didn't really know that it worked like that, but I guess it does. I kind of wish that sports teams in the U.S. were publicly traded, like some are in Europe, because that would be kind of cool.

Like buying a stock in the team and the stock price goes up and down based on how the team does. I mean, that would be so cool. But I don't think it's going to happen in the U.S. Well, all right, guys, that's the rundown for today. That's the rundown for this week. week. It lived up to the expectations. We got a surprise Fet cut of 50 basis points. The markets rally. We hit all time highs. I mean, what more could you want? I wonder how the markets are going to react next week. You know, after everyone's had some time over the weekend to kind of digest all the

movements from this week, I wonder if the markets will continue to rally or if we're going to see a pullback. If you guys want to stay in the loop of all the market movement, make sure you guys are subscribed to the podcast. And turn on the notification bell if you want to be notified as soon as an episode goes up. And if you guys enjoy the show, don't forget to hit us with a five star rating on Apple and Spotify. Leave a comment on Spotify as well. vote in the Spotify poll, all 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. 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. You should make your own financial and investment decisions or consult. Respective professionals. Learn more at public.com disclosures. In partnership with Zayid Mani, brokerage services for U.S. listed, registered securities are offered by Open to the Public Investing Incorporated, member FINRA and SIPC.