The Rundown - Nuclear Stocks Reach New Highs, Spirit Airlines Shares Rally 60%

Episode Date: October 21, 2024

Stock market update for October 21, 2024.

Public.com presents the rundown, your daily market update in five minutes. My name is Zad Admani, and today is Monday, October 21st. In today's episode, we preview an action-pack week with 100 companies reporting earnings. We also tell you about the latest development happening at Boeing that has investors excited. We also learn more about Disney's succession plans for Bob Eiger. Then stick around to the end of the show to find out why Spirit Airline stock is soaring and how much money the hot new AI startup just raised. They're ready to take on Google.

All right, let's go. Well, the stock market continues its hot streak and has now gone up for six straight weeks in a row. The S&P, NASDAG, and Dow all finished in the green last week with both the S&P and Dow setting record highs. Still don't care about the Dow. Now, things are going to get very interesting over the next few weeks as we enter into the thick of earnings season.

This week alone, about 100 companies from the S&P 5. are reporting earnings, including some of the major ones like 3M, GM, Verizon, and Tesla. I feel like Tesla has a lot writing on these earnings. I mean, their stock hasn't been doing so great since that Robotax event a couple weeks ago, which was kind of a disappointment. The stock is down over 7%. So Tesla investors are hoping to see some solid numbers on this earnings report. If these earnings disappoint, though, I mean, it could get pretty bad for the stock.

We will have to see Tesla reports earnings on Wednesday after the market close. We'll definitely keep an eye on that, along with the, all the other earnings this week. And it's not just the earnings report that are important, but also what the executives say in the earnings call. And like, what is their vibe for the future? If we get solid earnings and a strong guidance by these companies this week and over the next few weeks, I mean, this stock market rally could keep going. And don't forget, we're also getting economic data and a Fed meeting is coming up in a couple weeks as well. Oh, and there's also an election happening. So we will have a lot to cover this week and over the next few weeks.

I'll be very caffeinated, but we are locked in. So make sure you guys are subscribed to the podcast if you want to stay in the loop. Let's run through some headlines. Let's start with Boeing, because they reached a tentative deal with a striking union that has halted work at their factories for the past five weeks. The International Association of Machinists representing about 33,000 workers has been on strike for the past five weeks, and that's caused major disruption for Boeing. The strike has halted production of nearly all of Boeing's commercial jets, costing the company about $100 million a day. But that nightmare might finally. be over for Boeing. I mean, the union workers still have to vote on this proposal, which raises

their wages by nearly 40% over the next four years. But if this proposal gets approved, the strike could come to an end on Wednesday. And man, Wednesday's going to be a pretty important day for Boeing, not just because it's the potential end of the strike, but also because Boeing reports earnings that day as well. Probably a lot of caffeine consumption happening in the Boeing executive team right now. And this earnings is even more notable because there'll be the first earnings with new CEO Kelly Ortberg, who became CEO back in August. I mean, he's got a lot on his plate right now to help turn around the company. Boeing has been in financial trouble for a while now.

In fact, Boeing has lost more than $33 billion since the two fatal crashes of their 737 Max Jet back in 2018 and 2019. So Kelly Orpberg is going to have a lot of work to do to help turn the company around. Boeing stock is up nearly 3% this morning, so that's a nice bump. But we'll have to see what they say when they report their earnings on Wednesday. The stock is down more than 35%. since the start of the year. Let's shift gears and talk about another company that's been struggling recently, Disney.

Disney's making some changes to their board of directors, and they also said they're going to announce Bob Iger's successor in 2026. I mean, come on, what a tease. If you feel like you're getting deja vu, well, it's because Bob Eiger has delayed his retirement like five different times now. He's been the CEO of Disney for a long time. He first took over back in 2005. And he actually did retire in 2020.

The guy who replaced Bob Eiger was Bob Chapic, another Bob. Unfortunately, he wasn't good as the first Bob. He didn't last very long in the role before Bob Iger ended up coming back in 2022. So the lack of a clear succession plan has been a point of contention for Disney shareholders. So Disney really needs to nail this successor because I don't think Bob Iger can keep coming back to save the company. In fact, Bob Iger hasn't been doing so great himself this time since he came back in 2022. Disney also announced a shakeup of their board. Former Morgan Stanley CEO James Gorman is replacing Mark Parker as chairman in January.

Mark Parker is also the executive chairman of Nike. So corporate moves are happening at Disney. I mean, they have a lot of work to do to help turn their company around because their stock has not been doing so great. Shares are down more than 50% from all-time highs back in 2021. Let's talk about some stocks making moves today. Spirit Airline shares are soaring this morning after the struggling airline announced that they're not going bankrupt yet. The airline announced that they were pushing back the deadline to refinance over a billion dollars in debt that it owes to its credit card processing company.

Now, they didn't actually refinance the debt yet. They just pushed back the deadline to refinance the debt. The deadline was today, but they pushed that deadline to December. So they have a couple months now to work out some refinancing deals. Spirit Airlines also announced that they're borrowing $300 million from a credit line that they set up back in 2020. So it's coming in handy now. I mean, this is great news for the airline short term, at least. Investors are hyped.

The stock is up more than 30% this morning. but Spirit still has like a bigger problem of like their business struggling. You know, the revenues have been declining for years now. So good short-term relief, not really sure if Spirit's fully out of the woods yet. I mean, the DOJ did Spirit Airlines dirty by not allowing that JetBlue merger earlier this year. I mean, that should have gone through. Another winner today is nuclear stocks. They continue to reach record highs as big tech companies are investing hundreds of millions of dollars

to meet energy demands from their AI data centers. Some of the nuclear companies that have rallied over the past couple weeks are Oclo, Cameco, New Scale, Constellation Energy, and BMX Technologies. In fact, shares of ACHLO doubled last week, and New Scale was up 37%. So they're on a roll right now. Now, on the flip side, shares of Cigna are down this morning after reports that Cigna restarted conversations to buy Humana, which is another health insurance company. This isn't the first time that Cigna has thought about buying Humana.

They actually first approached Humana late last year, but the two companies couldn't agree two terms, so they abandoned the deal. The market reaction to this news hasn't been so great, though. Sign the shares are down more than 4% this morning. So I don't think investors want this deal to happen. I'm not going to lie, man. The health insurance world is just so confusing for me. Let's wrap the show with a fun fact.

The hot AI startup perplexity is in talks for a new funding round that would more than double their valuation to about $9 billion. And the increase in value for perplexity, which is an AI search engine, has been crazy. At the start of the year, they were valued at 500 million. In fact, just a few months ago, back in June, they were valued at $3 billion. And now they might be valued at more than $9 billion. The company's looking to raise around $500 million in their latest funding round, according to the Wall Street Journal.

I mean, AI companies continue to be hot right now. Just a couple of weeks ago, Open AI raised $6.6 billion at a $157 billion valuation. That's the largest venture capital deal ever. And, in fact, in Q3 of 2024, VC's invested $3.9 billion. and generative AI startups across 206 deals per pitchbook. And that doesn't include OpenAI. So AI is still hot right now. And as far as perplexity, I mean, I use it all the time now.

Their product is amazing. I'm finding myself using perplexity more than Google these days. It's an incredible tool. So I can definitely see why their valuation has skyrocketed. Well, all right, guys, that's the rundown for today. Hope you guys enjoyed today's episode. We have an action-pack week, not just this week, but the next two to three weeks are going to be crazy.

The markets could get wild. If you enjoy our show, consider giving us a five-star rating on Apple and Spotify. If you have like 20 extra seconds, consider leaving a review or writing a comment on Spotify as well. All that engagement really does help us out and helps other people find the show. And shout out to the 20-plus people

that left a comment on Friday's episode. You guys are awesome. Thank you so much. Thank you guys again for listening. Shout out to Mike and Connor for all the help behind the scenes. And we'll see you guys back here tomorrow. This is the rundown,

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