The Rundown - S&P 500 Pushes for 9th Straight Day of Gains, Eli Lilly Says Weight-Loss Drug Reduces Diabetes Risk

Episode Date: August 20, 2024

Stock market update for August 20, 2024.

Public.com presents the rundown, your daily market update in five minutes. My name is Zedadmani, and today is Tuesday, August 20th. In today's episode, we tell you about the stock market's hot streak, especially in video, and how close the stock market is from all-time highs. Also, we tell you about the new breakthroughs from Eli Lilly that has investors' hype. Then stick around to the end of the show to find out why Carl Icon got in trouble from the SEC and how much he's getting fine. All right, let's come.

Go. The stock market is on a roll right now. Both the S&P and NASDAQ moved higher to start the week, making that eight straight positive days in a row. In fact, that's the longest winning streak of the year for both indices. It looks like the market has fully recovered from the panic earlier this month, and the S&P is now within 1% from making all-time highs. I mean, I don't want to jinx it, but with the way things are moving right now, we might

get all-time highs this week. And Nvidia continues to rip. It was up another 4% on Monday after being up nearly 18% last week. In fact, yesterday, Nvidia overtook Microsoft to be the second most valuable company in the world at almost $3.2 trillion. So, Nvidia is making moves. And just a heads up, Nvidia will be reporting earnings on August 28th. That's next Wednesday. So it's coming up, but there's high expectations, as always.

Actually, some of the conductor stocks across the board have been rallying. Some of the popular names like Super Micro, Marvell, Micron are all up more than 20. 25% since August 7th. So maybe the AI hype isn't quite over yet. Anyone that bought the dip on NVIDIA or these other semi-conductor stocks has to be so hyped right now. Let's run through some headlines. Let's start with Loaves, which some people see as Home Depot's less cool younger brother.

They just reported earnings this morning, and it was kind of a mixed bag. They beat estimates for the quarter, but they lowered both their sales and profit guidance for the rest of the year. Loaves management said that it's concerned about lower demand for do it yourself projects, as well as the big macroeconomic picture. Loves expects comparable sales in 2024 to drop between 3.5% and 4% compared to last year. And we really shouldn't be surprised by this because Home Depot reported something pretty similar. They beat earnings for the quarter, but provided a downbeat guidance. I think it kind of makes sense because homeowners

are waiting for interest rates to go down before buying big ticket items or upgrading their kitchen. And also, there's a lack of new homeowners, right? Because the housing market is frozen due to high interest rates. I think when people buy a house, they tend to do some sort of renovation, right? Whether it's painting the walls or maybe revamping the kitchen a bit, maybe some bathrooms or the backyard patio, there's always some renovations done when new homeowners come in. So with housing markets frozen due to high interest rates, that is going to have an impact on Lowe's and Home Depot's business. But hey, like we've said, all signs point to the Federal Reserve cutting rates pretty soon. So with rates coming down, maybe people will start buying homes again,

and that might help Lowe's and Home Depot's business moving forward. about some that's seeing no slowdown in popularity, weight loss drugs. Drugs like Zepbound from Pharma Company Eli Lilly are more popular than ever. They can't make enough of them right now. And now Eli Lilly is saying that these weight loss drugs can act as a diabetes prevention tool. The pharma company released results of its recent trials for its weight loss drug Zetbound and found that the drug also helped prevent pre-diabetic patients from transitioning to type 2 diabetes. The drug helped reduce the risk of type 2 diabetes in 94% of the 1% of the 1%. 1,000 pre-diabetic patients during the test period of 176 weeks.

So not only will this drug help you lose weight, it'll also potentially protect you from getting diabetes when you're at the cusp of it. I mean, can this drug do everything? Can it help people grow hair and make them six feet tall? Because that's all that's left. I mean, it sounds like a miracle drug at this point. And that's why Eli Lilly's stock price has been going to the moon this year. Right now, Eli's market cap is just a little under $900 billion.

I mean, it looks like it's bound to hit the $1 trillion. dollar club pretty soon. Let's shift gears and talk about Paramount. I can't believe we're still talking about this. The Paramount buyout saga continues. There's this dude Edgar Brofman Jr. He's the chairman of Fubo, which is a streaming app. He submitted a $4.3 billion bid for national amusements. That's the majority shareholder of Paramount. Now, we've been talking about this off and on for the entire year. Skydance Media previously agreed to buy national amusements for $1.75 billion, along with other cash infusions, to help Paramount's balance sheet. But part of this agreement with Skydance left a time period open for Paramount to potentially get a

better deal. And it seems like they might have one. Brofman said that he would seek out partners within the tech industry and others if he took over the entertainment giant. Maybe Fubo will be involved somehow. I don't know. So we'll see how Skydance responds. Maybe they're going to up their offer.

Maybe they walk away. I don't know. Paramount stock is up 3% on this news, by the way. Let's talk about some stocks making moves today. Shares of Palo Alto Network are up after the company beat earnings this morning. The cybersecurity company reported that 90 customers shifted from using just one product to using multiple products compared to the 65 in the previous quarter. So I guess companies are getting more serious about cybersecurity.

I guess after the crowd strike debacle, it makes sense, right? Palo Alto's stock is up more than 5% in the pre-market and reaction to these earnings. On the flip side, Boeing is going through it again. The airplane manufacturer found cracks on its triple 7X test jets. Apple 7X was planned to be released in 2025, with hundreds of orders already submitted for the model. Boeing is pausing tests to this new plane and working on fixing the issue. Boeing stock is down more than 2% in reaction to this news. Honestly, Boeing did a pretty good job of not making any major headlines for a few months there, so good for them.

Let's wrap the show with a fun fact. Legendary investor, Carl Icahn, is getting in some trouble with the SEC. He just got charged by the SEC for not making the proper disclosures. Essentially, Carl Icon used his company stock, which is a publicly traded company, Icon Enterprises, ticker symbol IEP. He used that stock as collateral for a loan, and he didn't disclose that information. You have to disclose that information per SEC requirements. The SEC said that Carl Icon used anywhere between 51 to 82% of his company's shares as collateral

to get billions of dollars of loans. Now, this isn't anything sketchy, like rich people use their stock as collateral all the time to get a loan. In fact, Elon Musk uses Tesla stock as collateral. to get a loan to buy Twitter. But when you do that, you got to file some paperwork to disclose that information. Investors need to know how much stock is being used as collateral because if the value of the stock declines, the bar work could be forced to sell the stock to cover the loan, called the margin call. So that could affect the price of a stock.

Carl Icon didn't disclose it, and that's why he got charged by the SEC. But the SEC doesn't think that anything sketchy or fraudulent happens. So Carl Icon was able to settle the charges by agreeing to pay $500,000, and his company, Icon Enterprises, will pay at 1.5. million, which is like 0.01% of his net worth. So yeah, it's probably going to sting a little bit, huh? Well, all right, guys, that's the rundown for today. Hope you guys enjoyed today's show. If you did and you have like nine seconds, hit us with that five-star rating on Apple and Spotify. I wonder what's going to happen first. Are we going to get to 3,000 five-star ratings? Or is the S&P 500 going to make all-time highs first? Honestly, I'm good with either one,

but it would be pretty cool to get 3,000-5-star ratings. And if you are listening on Spotify, don't forget to vote in today's Spotify poll. All that engagement really does help us out. Thank you guys so much for listening. 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 the show reflect the opinions of the guests.

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