The Rundown - 'Roaring Kitty' Takes 6.6% Stake in Chewy, Boeing Faces Criminal Fraud Charges

Episode Date: July 1, 2024

Stock market update for July 1, 2024.

Public.com presents the rundown, your daily market update in five minutes. My name is Zadmani, and today is Monday, July 1st. In today's episode, we'll recap the stock market's performance in the first half of the year and what to look forward to in the second half. Also, Boeing has agreed to buy a company to help fix its safety problems, and they're also being charged with criminal fraud. We'll give you all the details. Then stick around to the end of the show to see how dominant the U.S. stock market has been

when compared to other countries. I mean, the numbers are pretty shocking. All right, let's go. Well, guys, July is here, and the first half of the year is in the books. And you've got to be feeling pretty good if you're an investor. The S&P 500 added more than 14%, and the NASDAQ was up more than 18%. The Dow, on the other hand, was up only 4%. Just why we shouldn't care about the Dow.

Now, it's been a relatively smooth ride for the stock market this year. Except for a couple weeks in April, we really haven't had any major drawdowns or corrections. It's just been a stress-free ride up. And we could probably think the frenzy. around AI for that. Investors have been piling money into companies that have AI potential, but you know, most of the returns have gone to the big tech companies. In fact, if you look at the market, it's been carried by five stocks. Invitya, Microsoft, Amazon, Meta, and Apple. You know all those names, right? 60% of the gains in the first half of the year were because of those five stocks.

And if you want to get even more specific, Nvidia itself was responsible for 31% of the first half gains. Invitya and Big Tech really carried the show this year. And that's not really a bad thing, but some analysts are kind of worried that the markets are so top-heavy and dominant by only a handful of stocks that if we ever see a slowdown in those companies or if the AI frenzy suddenly stops, then it could take the rest of the market down with it. I guess we'll see. Overall, pretty good vibes on Wall Street going into the second half of the year with the stock market near all-time highs, inflation's starting to come down and maybe even a potential Fed rate cut coming soon.

So let's hope the second half of the year is just as good as the first. As always, we'll keep you guys updated here on the rundown, so make sure you guys are tuning in. I also want to give a huge shout out to everyone that listened to the show this year. I mean, the support for the show and all the feedback has been so amazing. Thank you to everyone that's left to review on Apple Podcasts and to everyone that leaves nice comments on each episode on Spotify. And for those of you guys that vote in our daily polls on Spotify, I mean, all that feedback really means a lot. I think we're at 1,900 5-star ratings on Spotify, which is crazy. So thank you guys again.

And if you enjoy the show and want to support it, hit us with that 5-star rating on Apple and Spotify, especially on Spotify because we're so close to 2000. Maybe with your help this week, we can get to 2,000 five-star ratings, maybe even hit 2,500 by the end of the week. That would be a pretty incredible start to the second half of the year. So thank you guys again. All right, let's run through some headlines. Starting with Boeing. The U.S. Department of Justice is charging Boeing with criminal fraud over the two deadly crashes involving the 737 Max Jets that happened back in 2018 and 2019. Those crashes resulted in the death of 346 people and the family members of the victims have been calling for Boeing to face a criminal trial and pay nearly $25 billion in fines. Now Boeing has a week to decide

whether to plead guilty or roll the dice and take it to trial. If Boeing does plead guilty, they'll have to pay a $243 million fine, bringing their total fines so far to $500 million. They'll also have to agree to an independent monitor who will keep tabs on Boeing's compliance with anti-fraud laws. Ever since those tragedies with the 737 Max, Boeing hasn't really cleaned up its act when it comes to safety. We know about the infamous door blowing off the Alaskan Airlines flight earlier this year. And that's why Boeing continues to come under scrutiny. Boeing did agree on Sunday to acquire Spirit Aerosystems for $4.7 billion. Spirit Aerosystems actually manufactures the door plugs for Boeing. In fact, they used to be a part of Boeing, but Boeing spun them off in 2005 as a cost-cutting move,

and some believe that came at the expense of safety. So Boeing is hoping that this reunion with Spirit Aerosystems is going to help fix its safety issues and tighten up its production line. Well, guess we'll see about that. And just to be clear, Spirit Aerosystems is not Spirit Airlines, okay? It's two totally different companies. I know it can be kind of confusing. Spirit Aerosystems is ticker symbol SPR, and you can actually check them out on the public app. In some lighter news,

Disney Pixar's Inside Out 2 has become the first $1 billion movie since Barbie last year. Inside Out 2 is the fastest animated film to ever reach the $1 billion milestone, according to Disney. It took Inside Out 2 just 19 days beating out the previous record holder, which was Frozen 2, which took 25 days.

That's a pretty big accomplishment, I gotta say, because the hype for Frozen 2 was insane. Some more facts about Inside Out 2. It's now the fifth highest animated film of all time in North America box office sales ahead of classics like The Lion King, Toy Story 3 and 4, and Shrek. So it's been a dominant movie. It's a positive sign for the industry that's been in a slump since COVID. In 2019, nine movies, including seven from Disney, crossed $1 billion at the box office.

But since then, only seven movies have joined the $1 billion club. So it just goes to show you that the movie theater. business has not bounced back at all since COVID. Let's talk about some stocks making moves today. Starting with Chewy. The online pet food retailer is up big in the pre-market after meme stock investor Roaring Kitty, aka Keith Gill, the guy who made millions of dollars from GameStop, reported to the SEC that he bought just under 9 million shares of Chewy worth over $200 million. Where's this guy getting all his money from? Now, Roaring Kitty hasn't talked about why he made such a huge investor. in the company. Chewy does have some connection to GameStop. Chui was founded by Ryan Cohen,

who is now the CEO of GameStop. But Ryan Cohen sold the company to PetSmart back in 2017 and set down as CEO back in 2018. So I don't really get it. But it doesn't matter because Roaring Kitty's invested in it and the stock is up more than 10% in the pre-market. At one point, it was up more than 20%. So we're still doing this meme stock thing. So even on a short holiday week, Roaring Kitty just finds ways to make things interesting. On the flip side, a stock not doing so good this morning, GameStop. It's funny how that works. GameStop is down 6% in the pre-market. I guess meme traders feel like Chewy is now going to take the stage and all the attention over GameStop now. Big picture, like, what does this all mean for the future of meme stock? You know, I'm kind of

confused by the whole thing. But we'll let you guys know how things work out. What a way to start the week. All right, let's wrap the show with the fun fact. The U.S.'s share of the world's stock market capitalization is 61%. That's the highest it's been in decades. It wasn't always that high back in 2008 during the financial crisis, America's share dipped below 40%, but it's been on a steady climb since then. Now, the tech sector's dominance is obviously been the story over the last decade or so, but if you take tech out of it, the U.S. would still dominate the share of the worldwide stock market. Without tech, America's share in the world stock market would be 55%. So American stocks are just dominating right now. And what makes us even crazier is that the U.S. accounts for

just 25% of global GDP, but yet accounts for more than 60% of the worldwide stock market. By the way, it's been a pretty good year for global stocks as well. They're up about 12% through the first six months of the year. You can actually track that using the MSCI World Index. Well, all right, guys, that's a rundown for today. Remember, it's a short week the markets will be closed on Thursday because of the July 4th holiday. So no show for us then, but we'll be here for the rest of the week. Thank you guys again for listening and for all the support throughout the year.

Shout out to Connor and Mike 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 this 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. Respective professionals. Learn more at public.com disclosures.

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