The Rundown - Novo Nordisk Tanks on Weak Obesity Drug Results, Nike Delivers Another Quarterly Sales Decline

Episode Date: December 20, 2024

Stock market update for December 20, 2024. Follow our new Instagram account @TheRundownDaily

Public.com presents the rundown. Your daily market update in five minutes. My name is Zadmani, and today is Friday, December 20th. In today's episode, we talk about the bloodbath of the crypto markets. Everything seems to be down except for one. We also discuss why shares of Nobano Nordisk are tanking and why FedEx is splitting up the company. Then stick around to the end of the show to find out why Nike stock is down and why malls might be making a comeback.

All right, let's go. I was hoping we'd see a nice bounce back in the stock market on Thursday after the bloodbath on Wednesday. That wasn't the case, though. Both the S&P and NASDAQ were down 0.1%. So not a big drop, but still a down day. The Dow did squeeze out again, just barely, but technically the index is officially broken the 10-day losing streak,

so I'm going to have to retire the Dow jokes for a little bit. By the way, this sell-off is starting to hit. hit the crypto markets pretty hard now. Bitcoin is down below $94,000. Eath is trading around $3,000. Solana is under $200 now. All these major coins are down more than 10% over the last few days. So things are getting pretty rough for crypto too, except for fart coin, which somehow continues to rip higher despite the rest of the market's tanking. If you guys aren't familiar with fart coin, it's a meme coin that's up 50% in the past week and its market cap has crossed $1 billion. dollars. This coin was literally trading at two cents on Halloween, and today it's trading above a dollar.

So I don't even know how to react to that. Now going back to economic news, we just got some inflation data. The PCE inflation report, which is the Fed's preferred inflation gauge, that report just came out and measured inflation in November to be 2.4%. That's below the 2.5% that was expected. So that's kind of nice to see. That's some good news to end the week, you know? But again, the Fed wants to see inflation under 2%. So there's still some more work to do here. But hopefully the markets can use this inflation data point as a catalyst to end the week on a good note. We'll tell you how the markets end of the week on Monday's episode. So make sure you guys tune in for that. Let's run through some headlines. Shares of Novo Nortis, the company behind OZempic is having its worst day on record

after its next generation obesity drug fell short of expectations in a late stage trial. This new drug is called Cagory Semma. It's supposed to be the sequel to OZempec and Wee Govy, but the results haven't been as good as expected. Cagree Semma helped patients trim their weight by nearly 23%, but that was below the 25% goal. So they missed it by a little bit. And that caused investors to freak out with Novo Nord's stock dropping as much as 27% following these results. Eli Lilly's stock on the other hand, their main competitor, is up more than 5% after this news. The Danish drug maker will take another shot at increasing the effectiveness of its new drug in a new trial during the first half of 2025, and they're going to file for regulatory approval at the end of next year. The company is racing to get this to the market before their competition catches up because the weight loss market is projected to grow to $130 billion by 2030.

And a ton of pharmaceutical companies are scrambling to introduce new drugs that are more effective and have less side effects. And also that are easier to take, like a pill form, which would be a game. changer. We actually talked more about the weight loss market in our weekend deep dive episode. We posted it on Sunday. So if you want to learn more about that, go to our podcast feed, scroll back a few episodes and go give that episode to listen. We got some more news when it comes to the obesity drug market. The FDA announced on Thursday that the nationwide shortage of Eli Lili's Manjaro and Zepbound has been resolved. That means that the compound versions of those drugs have to come off the market. Compound drugs are essentially copycats that companies like

him and hers are approved to manufacturer during a supply shortage. Now that the supply shortage has been resolved, they can't sell those anymore. Shares of him and hers drop more than 10% when the FDA made that announcement. Let's shift gears and talk about FedEx. FedEx is planning to split up the company. Most people think of FedEx as the company that delivers your packages whenever you buy stuff online. Well, they also have a big freight business. Freight shipping is usually done by businesses for big items, you know, like industrial stuff. Well, FedEx is now planning to spin out that freight business into a separate publicly traded company. And the reason for this corporate divorce is to quote, unlock shareholder value. FedEx believes the market isn't valuing FedEx properly.

And you know, sometimes you got to break up to show the value you bring to the table. FedEx thinks that their freight business and their shipping business will get a better valuation as separate companies. And this actually has been a trend lately. Big conglomerates are breaking up into smaller, more focused companies. GE is the most famous example of this. And the initial reaction by the markets has been pretty positive. Shares of FedEx are up more than 5% this morning. Let's talk about some stocks making moves today. Shares of Occidental Petroleum are up this morning after Berkshire Hathaway revealed they bought

an additional $405 million worth of the stock, bringing Warren Buffett's overall stake in the company to around 28%. Warren Buffett seems to be a pretty big fan of this company. Occidental is an energy company based out of here in Houston that conducts oil explorations, projects and they also have other energy infrastructure businesses. The company's currently worth around $44 billion and Warren Buffett thinks they should be worth more. Shares of Occidental are up more than 2% this morning on this news. Now on the flip side, shares of Nike are falling after the sneaker giant reported an 8% sales decline in their last quarter. This was the company's third

consecutive quarterly sales decline, but it was the first earnings report under new CEO, Elliott Hill. Remember, Nike fired their last CEO John Donahoe back in September and put in Elliot Hill, so he's going to need some time to turn the company around. Elliot Hill said the company is relying too much on promotions, and he laid out his vision to get the company back on track, which might mean less promotions moving forward. Hill plans to focus on new product innovation, repairing relationships with retailers like Foot Locker, and making sports a key part of the business again. I mean, that's good to hear because, again, Nike has had a lot of competition lately from On

and Hoka and other sportswear companies, so they really need to lock in here to get the company in the right direction. I'm excited to hear about new products coming from Nike because I'm kind of tired of seeing everyone wear the same pairs of panda ducks everywhere I go, you know? It's time for something new, guys. The turnaround plan is showing some signs of early progress. Nike did beat on both earnings and revenue estimates for this past quarter, but despite that, shares of Nike are down more than 6% this morning. Wait, I just checked again, and Nike's only down around 2% this morning. So a nice little mini bounce back, but they still got a lot of work through to get investors confidence up again. Let's wrap the show with a fun fact. Malls are seeing fewer stores and more restaurants.

Because of online shopping, less people go to the malls to shop. So malls are now turning to restaurants to bring in the shoppers. 10 to 20 years ago, restaurants accounted for only around 5 to 10% of the general leasing area. These days, some malls and shopping centers are seeing 20 to 30% of the general leasing area dedicated to food. This is according to Brookfield Properties, which operates a ton of malls in the U.S. Honestly, I think this is a pretty good strategy. Restaurants have become an attraction point now. And this might be an unpopular opinion, but malls are pretty great, you know. They've become more of an all-around entertainment hub. You can do shopping, you can do movie theaters. I've seen bowling alleys at malls now. There's food. I think malls are starting to

become fun again. Or maybe I'm just really nostalgic of how awesome malls were back when I was a teenager. Well, all right, guys, that's the rundown for today. That's the rundown for this week. What a wild week, man. I do that we were going to get some action with a bed meeting. I wasn't expecting the markets to react the way they did. But yeah, the vibe has kind of shifted in the markets right now. And it'll be interesting to see how the last couple weeks in the markets end up going. Next week is a short week, but we'll still be posting some episodes. So if you guys need a quick update on what's happening in the markets while you guys are getting ready for the holidays, just check your podcast feed or hit the notification bell on

Spotify to be notified as soon as an episode goes up. Thank you guys so much for listening. Shout out to Mike and Connor for all the help behind the scenes. 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. Rundown 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.

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