The Rundown - Space Stock Surges 60% After Winning NASA Contract, Investors Await Rate Cut Decision

Episode Date: September 18, 2024

Stock market update for September 18, 2024.

Public.com presents the rundown, your daily market update in five minutes. My name is Zadadmani, and today is Wednesday, September 18th. In today's episode, we get you ready for the Fed meeting today and why it's such a big deal. We also tell you about NASA's plans to put boots back on the moon and a space company that will help them do that. Then stick around to the end of the show to find out why U.S. Steel Stock is a big winner today and why Tupperware is filing for bankruptcy. All right, let's go. Well, guys, the S&P 500 hit record highs yesterday for like eight seconds,

but then gave up those gains in the afternoon and finished the day in the red. The S&P was down 0.15% yesterday and the NASDAQ was flat. So not a ton of movement yesterday, but I got a feeling today is not going to be like that. Because at 2 p.m. Eastern time today, Jerome Powell and the Federal Reserve will officially announce rate cuts the first time since 2020. You know, we've been talking about the Fed meeting and hyping it off for weeks now. And it's a pretty big deal. Remember, the Fed has been aggressively hiking rates since 2022 because inflation got out of control jumping to over 9%. And one way to fight that is by increasing

rates. The Federal Reserve hiked interest rates to the highest levels in over 20 years to 5.255%. And honestly, that worked. Inflation is now around 2.5%. So the Fed is finally ready to cut rates. See, the downside of having high interest rates is that it can weaken the economy. The Federal Reserve has what's called a dual mandate. The Fed has to keep inflation low, but also employment high. And recent data has shown there's a weakening in the labor markets. And that could be because of the high interest rates that we've had for the last year or so. So the Fed is finally ready to cut rates and it should be one of many over the next few months and that should help strengthen the labor market if it's not too late. That's why some people were hoping for the Fed to start

cutting rates earlier. There's still a question of how big of a rate cuts did the Fed start with. Typically the Fed likes to do rate cuts in 25 basis point increments, but some have called for the the Fed to cut rates by 50 basis points. We talked about the pros and cons of both in yesterday's episode, so go check that out if you missed it. So we'll officially know by 2 p.m. Eastern what the Fed decides to do. 25 basis points or 50 basis points. And we're also going to get a press conference from Jerome Powell. So I'm pretty pumped for that. I'm going to be watching it. I can't wait to see what he says and how the markets react. Historically speaking, investors like rate cuts. The S&P has rallied by an average of 13% six months following the first rate cut by the Fed,

except for years during a recession. This is according to data analyzed by Bloomberg. So we'll see what happens this time. I'll be watching the Fed meeting and we'll recap the Fed's decision and the market reaction on tomorrow's episode. So make sure you guys are subscribed to the podcast if you aren't already.

And I'll post an instant reaction to the Fed meeting on Public's Instagram account right after Jerome Powell's press conference. So go follow public on Instagram. I wonder if Jerome Powell is going to rock a different color tie now that the Fed is going to start cutting rates? He's been wearing a purple tie for the last year or so.

I wonder if he's switching. It's really talking about that. Let's run through some headlines. NASA is trying to go back to the moon and they just awarded a space company nearly $5 billion to help them do that. The space company Intuitive Machines won a $4.8 billion contract from NASA to help set up communication

and navigation satellites to help NASA's Artemis campaign to establish a long-term presence on the moon. Now the name intuitive machines might sound familiar to because earlier this year the company made headlines made history by being the first private company to land a spacecraft on the moon. It was also the first successful lunar landing by an American vehicle since 1972. So it's been a while. Well, I guess NASA took notice and they awarded the company a $4.8 billion contract.

NASA is starting to get pretty serious about the moon again. NASA's plan is to send astronauts around the moon in 2025 and then on the moon in 26. And finally, NASA wants to launch astronauts to a space station called Gateway around the moon in 2008. Now, Intuitive is going to have to carry out a bunch of tasks in order to realize the full value of the contract, which lasts until 2029. Only $150 million is guaranteed. It kind of sounds like an NFL contract where the total value of the contract might be $100 million, but only like $10 million is guaranteed. I don't know. It reminded me of that.

But hey, investors were loving this news. Shares of Intuitive Machines are up more than 50% on this news. By the way, intuitive machines? Based here in my hometown of Houston, Texas. Let's stick with the aerospace theme and talk about the, merger between Alaskan Airlines and Hawaiian Airlines. This merger was announced back in December of last year and it looks like it's finally going to close. The Department of Transportation finally approved Alaskan Airlines $1.9 billion buyout of Hawaiian Airlines. But as part of this

approval, Alaskan Airlines will have to maintain key flight routes to Hawaii as well as keep frequent flyer miles active. The frequent flyer mile stuff is important to a lot of people. So it looks like this merger is on the verge of closing in the next coming days. This merger cleared the Department of Justice's review back in August. By the way, Alaskan Airlines is the fifth largest domestic U.S. airline, and Hawaiian Airlines was the 10th largest carrier. I've only flown Hawaiian Airlines and Alaskan Airlines each once, and I've had a great experience, especially the Hawaiian Airlines flight to Hawaii.

That was incredible. Let's talk about some stocks making moves today. Shares of U.S. steel are climbing this morning after the Biden administration officially pushed back the review of U.S. Steel's takeover by Japanese steel company Nippon Steel. The president has the ability to block this deal, citing national security reasons. Earlier reporting indicated that President Biden planned to block this deal. But now the Biden administration is pushing back this decision to after election day. This is according to the Washington Post.

So we won't officially know what happens to this deal until after election day. For what it's worth, the U.S. Steel CEO, David Burritt, is very confident the deal will go through. Investors seem to be a little bit more confident about that as well. US Steel stock is up 4% in reaction to this news. Now, a stock not doing so good this morning is Res. Shares are falling after Wolf research downgraded the stock to underperform with a price target of $180 per share. ResMed makes sleep apnea mask and Wolf says that Eli Lilly's weight loss drug showing signs of treating sleep apnea is a risk to ResMed's business. I guess losing weight also helps treat sleep apnea.

Chairs of ResMed are down 2% on this news. These weight loss drugs are wrecking havoc to every industry. Let's wrap the show with a fun fact. Tupperware has filed for bankruptcy. And we probably shouldn't be surprised by this. The company known for its iconic plastic food storages has been struggling recently. They even warn investors back in April of 2023 that they could go out of business. But then the company became a meme stock back in the summer of 2023,

where the stock price jumped like 300% in a month. But just becoming a meme stock isn't enough to turn the business around, especially if your business is selling plastic containers where you can get a knockoff 92 pack on T-Moo for like 12 bucks. It's kind of tough business to be in these days, you know? Well, all right. guys, that's the rundown for today. We got a big show coming up tomorrow. We're going to recap the Fed's decision and the market reaction. So make sure you guys tune into tomorrow's episode.

And if you guys want an instant reaction to the Fed meeting, which wraps up today at 2.30 p.m. Go follow Public's Instagram account and keep an eye out for an instant reaction video. 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. Run down 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. In partnership with Zaited money, brokerage services for U.S. listed registered securities are offered by Open to the Public Investing Incorporated, member FINRA and SIPC.