The Rundown - Nordstrom to Go Private in $6.25B Deal, American Airlines Averts Travel Crisis

Episode Date: December 24, 2024

Stock market update for December 24, 2024.

Public.com presents the rundown. Your daily market update in five minutes. My name is Zaid Admani, and today is Tuesday, December 24th. In today's episode, we tell you why Nordstrom is going private. We also discussed why American Airlines had to ground all their planes this morning. Then stick around to the end of the show to find out why Broadcom stock keeps rallying and how much Netflix paid the NFL to broadcast games on Christmas. All right.

Let's go. Stock started this week on a jolly note. The S&P 500 was up 0.7% and the NASDAQ was up 1% thanks to a rally in tech stocks. One of the big winners yesterday was Nvidia, which jumped 3.7%. December had been a pretty tough month for Nvidia, but the stock has gone up around 10% over the last week or so. So nice little bounce back for Nvidia. Let's hope this rally continues through the holiday period and into January for the Santa Claus' rally. Just a heads up though, the stock market will be closing a bit early today, closing at 1 p.m.

Eastern. And the stock market will be closed tomorrow for Christmas. So just a heads up for anyone that's looking to get any last minute trades in before Christmas. And for some reason, if you're itching to trade tomorrow, remember the crypto markets are always open 24-7. I mean, Bitcoin could use a Santa Claus rally right now. It's been a tough few days for Bitcoin. Let's run through some headlines. Nordstrom is going private. The iconic retailer is being taken private by the Nordstrom family. The family is being joined by Mexican retailer El Puerto de Liverpool to buy up all of Nordstrom's outstanding stock.

Puerto actually bought a 10% stake in Nordstrom back in 2022 and they run franchise locations for brands, including Gap, William Sonoma, and Pottery Barn. So they're familiar with the business. The outstanding Nordstrom shares are going to be bought for $24.25 each, which puts this buyout deal at around $4 billion. Now, if you include debt, the deal values Nordstrom at $6.25 billion. The Nordstrom family will now have a majority ownership of the company. And they're hoping to turn the company around because things haven't been so great for this department store. Nordstrom has taken a beating over the last few years. Their shares have dropped more than 40%

in the past five years. And a decade ago, their valuation peaked at $15 billion. I can't remember the last time I stepped inside of a Nordstrom. A decade ago, I feel like they were a pretty significant brand name. Now, I mean, I don't know. But you know, this has been the story for all department stores, chains like Macy's and Coles. They're all struggling right now. They haven't been able to compete with the rise of e-commerce and online shopping. On top of that, fast fashion players like Sheehan have gotten really popular over the last couple years. And as a result, these department stores have not been able to compete with all the competition. But hey, keep an eye on Nordstrom, because now with the family back in control, we'll see what they can do to turn things around.

You know, whenever I hear about a billionaire family running a family company, the succession music just starts playing in my head. I think about all the conversations, the family members are happening around the dinner table, what their Christmas parties are like, or the dynamics are like. It just sounds so fascinating to me. Let's shift gears and talk about something that probably caused a panic to anyone flying on American Airlines today. American Airlines grounded all their flights this morning due to a technical issue. This technical glitch caused a ground stop on all U.S. flights on Christmas. see one of the busiest traveling days of the year. Now, thankfully, America Airlines was able to resolve this issue and the ground stop was lifted about an hour later. And all flights have now resumed.

The airline says they don't expect any delays or other knock on effects. So if you're flying on American Airlines today, I think you should be good. Knock on wood. Now, this initial news definitely caused investors to panic a bit. American Airlines shares dropped more than 5% in pre-market trading, but have recovered since the news broke that the issue was resolved and everything seems to be on track. This is going to be flashbacks of the Southwest Airlines debacle back in 2022. Southwest had to cancel more than 16,000 flights over Christmas due to a technical issue. Because remember Southwest was using some super old software that crashed and they couldn't get it to work anymore. And that forced them to cancel all those flights. I remember people being strained

to that airports throughout the country. It was a pretty bad scene. In fact, Southwest got hit with a $140 million fine, which was the largest ever civil penalty. for travel disruption. So glad we're not getting that again. I'm sure that crowd strike is pretty happy to find out that they had nothing to do with this either. Let's talk about some stocks making moves today. Broadcom continues to rally this morning as it looks to finish the year as one of the market's hottest stocks. Broadcom was the best performing stock in the S&P 500 on Monday, and it's adding to those gains this morning after Morgan Stanley named the stock one of its favorite ideas for 2025. Just a little over a week ago, Broadcom became the eighth U.S. tech company to cross a trillion-dollar market cap after reporting earnings and a profit beat driven by their AI chip momentum.

I mentioned about a week ago that Broadcom had no Riz relative to Nvidia, but I feel like that's changing. I think Broadcom is starting to get a lot of attention these days. Broadcom is up more than 3% this morning in pre-market trading. On the flip side, shares of U.S. steel are falling after the power to approve the company's $15 billion, sale to Japan's Nippon Steel was passed to President Biden. Ultimately, the president now gets to decide the fate of this merger and he has 15 days to do it. This deal has gotten a lot of scrutiny because Nippon is a Japanese company, which caused uproar that a historic American company like U.S. Steel is going to be in the hands of a foreign power. So the U.S. government got involved

to decide if this deal would be approved because of national security issues. There's concerns about decreasing steel production in the U.S. if the Nippon acquisition actually passed. This decision was first in the hands of the committee on foreign investment, but they couldn't make a final decision. So now they passed it on to President Biden to get the last call. Biden has expressed his disapproval of the deal, according to Reuters. So we'll see what the president decides to do. Shares of U.S. Steel are down more than 1% this morning and down more than 18% in the last month or so. Let's wrap the show with a fun fact.

Netflix will be broadcasting live NFL games for the first time ever on Christmas Day. In fact, they're going to be broadcasting two NFL games, the Kansas City Chiefs versus the Pittsburgh Steelers, and my hometown Houston Texans versus the Baltimore Ravens. Now, Netflix paid a lot of money to the NFL to broadcast these games. About $75 million for each game. Netflix continues to lean into live sports, and the NFL is the biggest sports league in the U.S.,

so we'll see how it goes. Now, there is a lot of pressure on Netflix to not screw this up because there were a ton of complaints and glitches from the Jake Paul Mike Tyson fight they put on last month. I know Netflix is still new to the live streaming game, so hopefully they've learned their lesson from that event, and there won't be any issues for these NFL games. I gotta say Netflix got pretty lucky with some solid matchups too, because all these teams playing on Christmas are pretty good teams and likely headed to the playoffs.

So hopefully we'll get some good games here. By the way, Netflix is also going to have Beyonce perform at the halftime of the Texans game. So I'll definitely be watching, and I just hope the Texans don't embarrass themselves. I know the record's not that bad, but we're not a good team. Well, all right, guys, that's the rundown for today. Hope you guys enjoyed today's episode. Save travels to anyone that's traveling today. If you guys see something quick to listen to while you're waiting at the airports or driving,

go listen to our weekend deep dive episodes. On the week, as we post an episode diving into one topic, last weekend we talked about Nike. We've done episodes on Elon Musk, on Amazon. So go check that out and let us know what you think. And if you have like 12 extra seconds, consider giving us a five-star rating on Apple, on Spotify, vote in today's Spotify poll.

Leave us a comment on Spotify. All that engagement really does help us out. Thank you guys so much for listening. Merry Christmas and happy holidays. Shout out to Mike and Connor for all the help behind the scenes. Remember no show for us tomorrow. So I'll see you guys back here on Thursday. 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. Respected professionals. Learn more at public.com disclosures. In partnership with Zayidemani. Brokage services for U.S. listed, registered securities are offered by Open to the Public Investing Incorporated, member FINRA and SIPC.