The Rundown - Spotify Posts Record Profits, Spot Ether ETFs to Begin Trading

Episode Date: July 23, 2024

Stock market update for July 23, 2024.

Public.com presents the rundown. Your daily market update in five minutes. My name is Zaidadmani, and today is Tuesday, July 23rd. In today's episode, we recap a ton of earnings, Spotify, GM, UPS, all reported earnings, and their stocks are on the move. Also, the Ethereum Spot ETF is launching today. We'll tell you the latest. Then stick around to the end of the show to find out how much money Jake Paul's

new company is expected to make. All right, let's go. Markets got off to a nice start this week with big tech stocks leading the way. The S&P and NASDAQ were both up more than 1% on Monday, which is a nice bounce back after last week's losses. Some of the most notable moves were Tesla and Nvidia, which were both up nearly 5%. In fact, a lot of semiconductor stocks were up on Monday, which was probably a side relief for many investors.

After getting crushed last week, small cap stocks also had a great Monday with the Russell 2000 up 1.7% outperforming both the end. S&P and NASDAQ. So small caps are still hot. But Monday wasn't great for every company. CrowdStrike was down more than 13% as they still deal with the fallout of causing the largest IT outage in history. So tough time for CrowdStrike right now and for anyone that bought the CrowdStrike dip on Friday. Like me, should have waited. Overall, though, great start to the week. And let's see if markets can hold this rally as companies start reporting earnings. In fact, about 25% of S&P 500 companies are reporting earnings this week.

So these earnings, especially from bigger companies like Tesla and Google, could set the overall vibe for the markets this week. Let's run through some headlines. Spotify shares are soaring this morning after the company reported earnings and they crushed it. They beat Wall Street estimates across the board. Spotify's revenues were up 20% and their gross margin hit a record 29.2%. Spotify expects to hit a 30% gross margin by next quarter.

users also continue to grow, their monthly active users jumped 14% to 626 million globally, and their premium subscribers, the people that pay monthly, grew by 12% to 246 million. All those numbers beat Wall Street estimates. On top of that, Spotify's operating expenses declined by 16% due to job cuts. So it looks like Spotify's turnaround strategy seems to be working. They've recently raised prices and cut expenses, which is increasing their profitability without hurting their growth numbers. So a huge quarter for Spotify shares are up around 14% on this news.

I feel like this podcast, along with all the listeners, deserve a little bit of credit here. Because we've done a great job engaging with the Spotify platform. Shout out to everyone that's given us a five-star rating and votes in our daily polls. Maybe we can get Spotify CEO Daniel Eck on the podcast. Shooting my shot here. Let's switch gears and talk about another very exciting topic, Ethereum ETFs. Ethereum ETFs are expected to hit the market today after receiving approval from the SEC. Now, we kind of went through something similar when the Bitcoin ETF came out.

in January, so a lot of the same firms that released a Bitcoin ETF are releasing one for Ethereum. That includes grayscale, Invesco, Bitwise, Fidelity, BlackRock, and more. Now, Ether is up only around 3% in the past five days, so it hasn't really gotten the spite that Bitcoin did when its ETF was approved. Not going to lie, at least from my perspective, there doesn't seem to be the same level of height for the Ethereum spot ETF as there was for Bitcoin. But that could just be me. Now, Ethereum's market cap is considerably lower than Bitcoin.

It has a market cap of around $400 billion, while Bitcoins is $1.1.1. $1.3 trillion. So Bitcoin is more than three times larger than Ethereum when comparing market caps. So we'll see what kind of demand the Ethereum ETF has compared to Bitcoins. In fact, let's make that the Spotify poll of the day. Are you going to be investing in the Ethereum Spot ETF? If you're listening to this episode on Spotify, tap today's episode and vote in today's poll. And real quick, Google's plans to acquire cybersecurity startup Whiz for $23 billion has collapsed. Whiz is deciding to not accept this deal. Instead, Wizz will refocus its efforts to reach $1 billion in annual reoccurring sales within the next year and IPO within the next few years,

according to the Wall Street Journal. Kind of a shocker, I'm not going to lie, turning down $23 billion, which would have been Google's largest acquisition ever, topping the $12.5 billion acquisition of Motorola mobility back in 2012. I wonder if they're going to end up regretting that. And I wonder if the Crowdstrike debacle over the last few days has anything to do with their decision. Because maybe Wiz thinks that they can steal some business from CrowdStrike and grow their business faster than expected. I don't know. We'll see. By the way, Google's reporting earnings today after market close. We're going to learn more about their business. I wonder if they're going to mention anything about Wizz. But regardless, we'll be breaking down Google's earnings tomorrow morning here on the

rundown. So make sure you guys go check that out. Let's talk about some stocks making moves today. No surprise here, but they're all earnings related. Let's start with GM. Shares of GM are rising in the pre-market after their earnings beat revenue and profit estimates. It was a big quarter for the company revenues were up 7% to $48 billion and profits were up 14% to $2.9 billion. And the U.S. market was the strongest for GM with their second quarter being the best U.S. sales since the fourth quarter of 2020, thanks to strong demands for trucks and SUVs. GM also saw strong EV growth. The company delivered 22,000 EVs, which is up 40% from a year ago. Investors were loving the numbers from GM. The stock jumped more than 4% in the pre-market. And she has to be a lot.

is quietly having a huge year. Their stock is up 37% this year as of close on Monday. I wonder if this means that we're going to see great numbers from other car companies. I guess we'll find out this week because Tesla's reporting later today, Ford reports tomorrow, so we'll find out pretty soon. On the flip side, UPS having a tough morning, their shares are down in the pre-market after they reported disappointing earnings. UPS revenues and profits were down both missing analyst estimates. UPS saw lower shipping volumes, weaker prices, and higher labor costs, which hurt their profit margin. And the company does not expect things to get better this year. The company lowered their guidance for the year. UPS now expects revenues of approximately $93 billion down from the $94.5 billion

they previously estimated. And they expect operating profits to be around $8.7 billion. Wall Street was hoping for $9.6 billion. So that's nearly a billion dollar haircut. Tough quarter for UPS. The stock is down more than 8% in the pre-market in reaction to these earnings. All right, let's wrap the show with a fun fact. Body care brand W, which was created by influencer Jake Paul, just raised $11 million in Series A funding, valuing the company north of $150 million. This funding round brings the total funding for W to $14 million, which includes capital from high-profile names,

like Fanatic CEO Michael Rubin, rapper Lil Durk, Celsius CEO John Fieldley, and even OG influencer Paris Hilton. What's crazy is the brand launched just a few weeks ago back in June. And the brand is expected to hit $50 million in sales by the end of its first year in business. The W brand launched with deodorants, body wash, body spray, which puts it up against products from heavyweight companies like Unilever and Procter & Gamble. But Jake Paul says he's swinging big and he says he wants to take over the whole bathroom.

So expect more products pretty soon. Man, these Paul brothers have really figured out this influencer thing, huh? Well, all right, guys, that's the rundown for today. We're going to be locked in this week as more and more earnings come out. Make sure you guys are subscribed to the podcast. hit that notification bell so you're notified as soon as an episode goes up. You don't want to miss all the updates from this week. Thank you guys again for listening.

Shout out to Connor and Mike for all the help behind the scenes. 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. 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.

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