The Rundown - Spotify Swings to a Profit, JetBlue Cuts 2024 Revenue Outlook

Episode Date: April 23, 2024

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Public.com presents the rundown, your daily market update in five minutes. My name is Zademani, and today is Tuesday, April 23rd. In today's episode, we dive into earnings from Spotify and GM and get you ready for Tesla's big earnings that drop tonight. Also, there's more trouble brewing for Apple in China. And stick around to the end of the show to find out about the New York Stock Exchange's latest plans that might cost them sleepless nights. All right, let's go.

Guys, the stock market finally broke the six-day losing streak on Monday. Both the S&P 500 and the NASDAQ were up to start the week. And I'm not going to lie, it felt really good to finally see some green on my screen. Now, yesterday could just be the calm before the storm because 150 companies are reporting earnings this week. And how these companies perform could either push the market higher or drag it down, especially some of these bigger companies like Microsoft, Google, meta, and Tesla. Speaking of earnings, let's run through some headlines. We've already had a few companies report earnings this week, so let's recap some of the bigger ones.

Starting with Spotify's. Spotify reported earnings this morning, and investors were loving it. Shares of Spotify are up more than 9% in pre-market trading. Spotify reported a profit of 197 million euros for Q1. And investors love this because in Q1 of last year, they reported a loss of 225 million euros. So anytime a company goes from a loss to a profit, that's going to make investors happy. Now, Spotify did miss on user growth. Their monthly active users jumped 19% to 615 million, but that was 3 million less than what Wall Street was expecting.

Now, the company has been focused on cost cutting over the last few months, and it looks like the cost cutting is paying off. So while it did hurt their growth a little bit, it looks like Spotify is finally turning a profit. Oh, and I forgot to mention, they now have 239 million premium subscribers, which is right in line with what Wall Street was expecting. And Spotify also raised their guidance for Q2. So pretty solid earnings for Spotify, and investors seem to be pretty happy right now.

Next up, we got General Motors. GM reported earnings this morning, and they also topped estimates on both revenue and profit. GM's overall profits grew by 24%. And they attributed that to their strength in the North American market, where they sold a ton of pickup trucks. The strength in the U.S. market helped offset the weakness in the Chinese market, which is the world's largest auto market. GM lost $106 million in China because of more competition from Chinese EV makers. This is the same problem that Tesla's been having as well. Just for context, not too long ago, GM used to make about $2 billion a year in profit from China, and now they're making a loss. So things have not been great in China for automakers.

But still, investors like what they heard from GM, and their shares are up more than 4% in pre-market trading. And now everyone turns their attention to the other big automakers reporting this week, Tesla. We did a Spotify poll on yesterday's episode, and you guys were looking forward to Tesla earnings the most. Well, we don't have to wait much longer because Tesla's reporting their earnings today after market closed. And the bar has been set so low for Tesla. I mean, they're expected to post their lowest gross profit margin in more than six years. And they're supposed to pose a decline in revenue and earnings. We're going to break it all down in tomorrow's episode with the rundown.

So make sure you guys tune in. If you guys want to be notified right when we post, tap that bell on Spotify. Speaking of China, automakers are not the only companies feeling pain in China. It's a major pain point for Apple, too. We got new reports this morning that iPhone sales in China dropped by 19% during the March quarter. This is according to data from counterpoint research. reported by Bloomberg. This would drop Apple down to third place in market share in China. It's definitely something to keep an eye on, and I bet you this gets brought up during

Apple's earnings call when they report earnings next week. Let's talk about some stocks making moves today. Shares of Roblox are up more than 4% this morning after J.P. Morgan upgraded the gaming company with a price target of $48 a share. Right now, the stock currently trades around $35 a share. JP Morgan points to the fact that Roblox booking business grew by 20%, which is the revenue that accounts for sales of in-game currency, the Robux. J.P. Morgan is also interested in Roblox's plans to enter into the advertising business in the second half of this year. And the commerce business in 2025. So keep an eye off for Roblox.

Stock not doing so good this morning is JetBlue. Shares of JetBlue are down more than 10% this morning after the company reported their earnings. The company expects their revenues to decline in 2024 and said that Q2 revenues could fall by more than 10%. JetBlue's management said that they're dealing with elevated capacity in the Latin America. market, which means they have a lot of empty seats during flights. JetBlue expects the Latin American market to put pressure on revenues for the rest of the year. I mean, it's been a tough few months for JetBlue. They had their merger with Spirit Airlines called off because of antitrust, and now they expect their revenues to decline. JetBlue does have a new CEO who started this year,

and their focus on cutting costs and getting the airline back to profitability. But right now, investors aren't happy. Let's wrap the show with a fun fact. Today's fun fact is about the New York Stock Exchange. They might be open 24 hours a day in the near future. According to the Financial Times, the New York Stock Exchange Data Analytics team is polling market participants about being open 24 hours a day, either seven days a week or just on the weekdays. You know, I do find it kind of funny that the stock market is only open like six and a half hours a day.

I mean, it's 2024. How is the stock market not already open 24 hours a day? And I know you can do some pre-market and after-hours trading, but usually the liquidity for those is much lower. Crypto trades 24 hours a day. Oh, wait. You know, maybe I'm okay with the stock market not being open all the time. You know, maybe that's a feature and not a bug.

Because I do know some people, including myself, I might lose some sleep if the markets were open all the time. So if the New York Stock Exchange decides to not go to 24 hours trading, I think I'd be okay with that. But maybe I'm way off here. Like, what do you guys think? Do you guys want the stock market to be open 24 hours a day? We'll make that the Spotify poll today. If you're listening on Spotify, tap today's episode and vote in today's poll. I'm genuinely curious to know how people are going to vote on this one.

All right, guys. Well, that's all I got for you guys today. Remember, tomorrow's episode is going to be a big one. I really hope I have some good news for Tesla shareholders. If you guys enjoyed today's episode, please consider giving us a five-star rating on Apple and Spotify. Thank you guys again for listening. And thank you to Connor and Mike for all the work 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 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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