The Rundown - Nvidia Suffers Historic Rout, Intel Faces Expulsion from the Dow

Episode Date: September 4, 2024

Stock market update for September 4, 2024.

Public.com presents the rundown, your daily market update in five minutes. My name is Zadmani, and today is Wednesday, September 4th. In today's episode, we tell you why the markets got off to a bumpy start this month. We also cover some drama with Nvidia and the DOJ and tell you why Intel continues to struggle. Then stick around to the end of the show to find out how much money will be bet during the NFL season this year. Number keeps on going up. All right, let's go. September is a lot. off to a bumpy start. The markets got crushed on Tuesday. The S&P was down 2% and the NASDAQ was down

3.3%. This was the worst day in the market since August 5th, the start of last month. Do you guys remember how that month started off with markets melting down all over the world because of concerns of a global economic slowdown? Well, some of those concerns are starting to trickle back up. And there's some concerns about an AI bubble popping as well. Semiconductor stocks especially got wrecked on Tuesday. I mean, it was a sea of red across the board. Intel, AMD, Broadcom, Qualcomm. They were all down between 6 and 7%. And the worst of it was Nvidia. It was down nearly 10% losing nearly $300 billion in market cap. That's the biggest one-day drop in history. Now, we're going to talk more about Nvidia in a bit, but the stock is having a rough time since

it reported earnings last week. By the way, $300 billion, that's like the market cap of Netflix. Invidia lost that value in a day. Low key, I kind of love the volatility in the market. markets right now. It looks like September is living up to its reputation for being the worst month for the stock market so far. But remember, August started off the same way, and stocks ended up rallying the rest of the month and finished August on a positive note. So that could still happen in September, especially if we get some solid economic data, like the jobs report, which comes out on Friday morning. That report's going to tell us how many jobs were added to the economy last month. So if that number comes out to be pretty good, things could turn around. So let's hope it's a good

And if that job support turns out to be bad, well, then all the concerns and anxiety about an economic slowdown, they're just going to get louder. So yeah, we might get some volatility in the stock market over the next few days and weeks. Should be fun. Either way, we got you guys covered here on the rundown, new episodes every morning. So make sure you guys subscribe to the podcast. Hit that notification bell so you don't miss an episode right when it comes out every morning. Let's run through some headlines.

Invidia is having a tough go this week. The Department of Justice is investigating Nvidia on whether it's abusing its market power. In fact, the DOJ hit Nvidia and other third parties with a subpoena demanding information to determine if Nvidia is engaging in anti-competitive behavior. This is according to reporting from Bloomberg. Regulators are worried that Nvidia is making it difficult for its customers to switch to other AI chip makers. Also potentially penalizing buyers for not exclusively using Nvidia's AI chips.

This is according to the report. So that's being investigated right now, something to keep an eye on. And the fact that the DOJ sent a subpoena, it means that things are getting serious. So we'll let you know how things turn out, but this might take a few months to fully settle out. So yeah, Invidia having a pretty bad couple weeks, but I think that Intel might be having a worse time. At least Nvidia is having a great year outside of the last two weeks. Intel is having a bad year altogether. And it just continues to get worse.

Reuters reported that Intel's manufacturing business is hitting a snag after poor test results for silicon wafer's which the company sent to Broadcom. The chips were so bad that Broadcoms had the chips weren't ready for large-scale production. This is a terrible look for Intel. I mean, they're trying to compete with the big boys in chip manufacturing like TSM, but it isn't going great so far. And by the way, chip manufacturing is different than what NVIDIA or Broadcom does. NVIDIA and Broadcom, they designed their chips, but it gets manufactured at a place like

TSM or Intel. Intel used to be one of the largest manufacturers of chips in the world, but these days they're struggling. Now, Intel is supposed to receive $8.5 billion in funding and get access to $11 billion in loans from the U.S. government as part of the Chipsack. And Intel is one of the few companies that has the capabilities to manufacture chips in the U.S. But the issue is that Intel needs to hit a certain milestone before being granted access to that funding. And unfortunately, for Intel, they're dealing with performance issues.

And they don't have a quick fix pill for that. Intel lost $7 billion within its manufacturing business in 2023. And the company said that it's now cutting its dividends, they're cutting their capital expenditures, and they're laying off 15% of its staff in hopes of turning things around. The stock is down around 55% in the past six months. And because of the poor performance of the stock, Intel might get kicked out of the Dow Jones Index. Remember, the Dow Jones Index is made up of 30 companies, the pretty exclusive club. But because of how bad Intel has been doing, experts think that it might get kicked out.

Intel has been the worst performing stock in the Dow Jones so far. So if they do get kicked out, I wonder who's going to replace them. And then again, nobody cares about the Dow. Let's talk about some stocks making moves today. shares of the software development platform Git Labs are surging this morning after they reported better than expected earnings. Revenues were up 31% and profits also came in higher than expected. On top of that, the company raised their full year sales guidance. GitLab points to the fact that more businesses are trying to embed AI and security

protections into their tech, which is good for Git Labs because, again, they're a platform for software development. The stock is out 15% in response to these earnings, which is a relief to GitLab investors because as of market closed yesterday, the stock was dead. down 25% for the year. Now, a stock that's been struggling today, and frankly, all year, is Dollar Tree. The stock is getting cooked this morning after the company reported disappointing earnings and lowered their sales guidance. Dollar Tree sales last quarter were up less than 1% compared to a year ago, and Dollar Tree doesn't think it's going to get better anytime soon. They cut their

revenue forecast for this year. The company blames a challenging macro environment for its customers. Shares are down more than 10% in the pre-market, and like I said, Dollar Tree is having a terrible year. Shares were down more than 40% for the year as of market closed yesterday. Let's wrap the show with a fun fact. The NFL kicks off on Thursday night, which means millions of people are going to be sitting on the couch, ignoring their other responsibilities, checking their fantasy football teams, and depending where you live, a ton of betting. In fact, $35 billion is expected to be legally wagered this NFL season, according to the American Gaming Association. That would be a new record 30% higher than last season. Sports gambling continues to become a bigger industry.

in the U.S. with more states allowing it. But you know, what's funny is, gambling companies haven't really had a great year. Stocks for Draft Kings, Penn, Cesar's, and MGM are all down for the year. It's a pretty competitive industry, and it's one of the reasons why every other ad during a sporting event on TV is for a gambling app, which honestly is kind of annoying. I'm not going to lie. I kind of wonder if we're going to see a backlash to all the sports betting. There's been some studies on the negative impacts of it.

But until then, just get ready to see a ton of ads for sports betting apps talking about 10-game parlay. Well, all right, guys, that's the rundown for today. Hope you guys enjoyed today's episode. If you did, don't forget to hit us with a five-star rating on Apple and Spotify. And if you guys want another podcast to listen to, go check out the leading indicator podcast from public.com. In the latest episode, my friend Kyla Scanlan spoke with Jason Furman,

who's a Harvard economist. He spent eight years as President Obama's top economic advisor, and Furman argues in favor of the largely unpopular proposal for taxing unrealized gains. He also explains how tariffs impact economic. growth and explains immigration's role in the labor market. So if you guys are interested in those topics, highly recommend listening to the leading indicator podcast.

We'll drop a link in the description. 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, 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.

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