The Rundown - Silicon Valley Takes on Defense Industry's Old Guard, Rumble Stock Nearly Doubles on Tether Investment

Episode Date: December 23, 2024

Stock market update for December 23, 2024.

Public.com presents the rundown. Your daily market update in five minutes. My name is Zaid Admani, and today is Monday, December 23rd. In today's episode, we discussed the Santa Claus rally and why investors look forward to it every year. We also discuss Palantir's plans to team up with other tech companies to take on the defense industry. Then stick around to the end of the show to find out why Xerox and Rumble stocks are up and why Netflix is excited about Squid Games too. All right, let's go. Well, the stock market is coming off a pretty tough week. Thanks to Jerome Powell.

Last week, the S&P, NASDAQ, and Dow were all down around 2% after the Fed cut interest rates by 25 basis points. But Jerome Powell hinted at fewer rate cuts moving forward, which seemed to cause a panic in the markets. We did a full recap of the Fed meeting on Thursday show last week, so go check that out if you missed it. But yeah, it wasn't a great way to end the last. full trading week of the year. Now, we are about to enter the period called the Santa Claus rally. That's actually a real term referring to the last five trading days of December and the first two trading days of January. During this time period, the S&P 500 has been positive 79% of the time. And historically, the S&P has averaged a gain of 1.3% during the seven-day period going all the way

back to 1950. So we got something to look forward to. I mean, Santa doesn't always come through, though. Last year, the S&P actually dropped nearly 1% during this period. So we'll have to see if Santa comes through for us this year. Speaking of the holidays, we do have a short week this week. The stock market will be closing early at 1 p.m. Eastern on Tuesday for Christmas Eve and the stock market will be closed on Wednesday for Christmas. Now, as for this show, we are going to have a quick show tomorrow. No show on Wednesday, but we'll be back here on Thursday talking markets, crypto and everything else happening. So keep an eye on your podcast feed for that. Let's run through some headlines. Tech companies are coming together to take on the defense industry. The Financial

Times is reporting that Palantir and Andrewl are teaming up and looking to create a group of tech companies that will jointly bid for government defense contracts. These two companies are reportedly in talks to recruit a dozen competitors, including OpenAI, SpaceX, and the autonomous shipbuilder Seronic. The idea behind these potential partnerships is to compete with the legacy defense companies like Lockheed, Martin, Raytheon, and Boeing for the $850 billion U.S. defense budget. These tech startups think they have a better solution. Like, Andrel has been working on offering smaller autonomous, cost-effective weapons that they can build at a much faster rate.

Think like drones and smaller AI missiles. Androl recently announced a partnership with both Palantir and OpenAI to integrate AI with their military weapons. It'll be interesting to see how this collaboration will work out. And the fact that Elon Musk and SpaceX might be part of this as well is very interesting. Elon Musk has been criticizing the Lockheed Martin F-35 fighter jets on X lately, emphasizing the superiority of swarm drones. So the defense industry could look a lot different in a few years' time.

I mean, markets seem to be very excited about these up-and-coming defense companies. Palantir stock has gotten up almost 400% this year, while the old-school defense contractors like Northrop German, Lockheed Martin, and Boeing have had subpar performances in the stock market this year. Now, speaking of AI and new tech, let's talk about meta. According to reporting from the Financial Times, meta is planning to release an updated version of the RayBan smart glasses that's going to have a display.

And it might be coming as soon as 2025. You have no idea how excited I am for this. I currently own a pair of the Rayban meta glasses that I bought earlier this year. The best tech purchase I've made all year. They look like regular sunglasses, but they can take pictures, videos. They have AI built in that is actually useful. It's a really great product for $300. But the current versions don't have a display.

And while that's not a huge issue, having a display would be great. These meta-smart glasses have been a surprise hit, even for meta, but it's part of their overall vision for the future of computing. In fact, Zuck just posted on threads that he thinks that glasses will be the next major computing platform. And he wants to be the leader in that space. And I think they might be, because remember earlier this year, they showed off their prototype AR glasses called Orion. Those glasses aren't ready to be sold to the public yet,

But the future looks very exciting. I'm a lot more bullish on these AR smart glasses that Mehta's working on than I am the VR stuff. I think the glasses form factor is a lot more appealing to people than a headset that covers your entire face. People have been wearing glasses for centuries now. So we're used to the form factor. It's lighter than wearing a VR headset. So I think the hope is that people will adopt these smart glasses at a much wider scale than VR. And I think I agree.

Let's talk about some stocks making moves today. Shares of Xerox are up this morning after the tech company announced a $1.5 billion acquisition of printer maker Lexmark. Lexmark isn't really a household name in the U.S., but they do have a big presence in Asia, which is a market that Xerox is trying to have a bigger presence in. Investors were liking this move. shares of Xerox are up around 8% this morning in reaction to this news. I'm not going to lie, though. I had no idea that Xerox was still around. I mean, it's not been a great year for them. The stock is down about 50% this year as of market cliques. close Friday. But yeah, I don't think I've seen an actual Xerox printer or copier in like 25 years. All right. Another stock having a big morning is Rumble. Shares of the video streaming company

are up more than 60% after they announced a $775 million investment from the cryptocurrency giant tether. Rumble plans to use the money for growth and share buybacks. Now, a quick history on Rumble. They were founded back in 2013 as an alternative to YouTube, but they've built a brand around protecting free speech and denouncing censorship. And that commitment has attracted the decentralization crypto audience. And it's a group that Rumble appears to be eager to deepen their ties with. In a statement, Tether CEO said that Rumble shares values of decentralization, independence, transparency, and the fundamental right to free expression. Also, a month ago, Rumble announced that it would purchase about $20 million worth of Bitcoin as part of their strategic reserve holdings.

So yeah, they're going all in on crypto. Speaking of going all in on crypto, we got to talk about Micro Strategy again. Their shares are trading lower this morning after Bitcoin fell below $100,000 last week. Remember, Micro Strategy has been buying billions of dollars worth of Bitcoins over the last few weeks. So they own a lot of Bitcoin on their balance sheet, which is why their stock tends to move with the price of Bitcoin. But despite Micro Strategy stock being down more than 14% in the last

five days, the company's now back and down. They announced this morning that they bought more Bitcoin for the seventh straight week. Last week, the company bought nearly 5,300 Bitcoin for a total of $561 million. So yeah, they're not worried about a 10% correction in the price of Bitcoin. Micro Strategy stock has down around 2% this morning, but today is the day the stock is said to enter the NASDAQ 100 index. So if you own an ETF that tracks that index like QQQ, your portfolio officially has some exposure to Bitcoin. Let's wrap the show. Let's wrap the show. show with a fun fact squid games too officially comes out on netflix on december 26th and i just want to take a moment to talk about how big squid games was season one of squid games is netflix's most watched

tv series of all time drawing in more than 330 million viewers since its release in 2021 and it was a hit right out of the gate over 1.6 billion hours of squid games was watched in its first 28 days which was more than anything Netflix had ever released at the time. So season two has big shoes to fill. I don't know if season two is going to become like the cultural phenomenon that season one was, but it's probably going to do big numbers. Well, all right, guys, that's the rundown for today. It's a short week, but we do have a show tomorrow.

So if you guys are traveling or packing last minute gifts and need your market recap fix, we got you. And if you have like eight extra seconds, consider giving us a five-star rating on Apple or Spotify. Leave us a comment on Spotify. vote in today's Spotify poll. All that engagement really helps us out, and it helps other people find the show. 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 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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