The Rundown - Starbucks' Turn-Around Plan Shows No Signs of Improvement, Palo Alto Networks Makes $25B Acquisition
Episode Date: July 30, 2025Stock market update for July 30, 2025. This video is for informational purposes only and reflects the views of the host and guest, not Public Holdings or its subsidiaries. Mentions of assets are not r...ecommendations. Investing involves risk, including loss. Past performance does not guarantee future results. For full disclosures, visit Public.com/disclosures.
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Public.com presents the rundown.
Your daily market update in under 10 minutes.
My name is Zadadmani, and today is Wednesday, July 30th.
In today's episode, we'll get you ready for a big Fed meeting and tell you when investors are expecting a rate cut.
We'll also recap earnings from Starbucks and tell you why investors are excited about their future.
Then stick around to the end of the show to find out where Elon's boring company is going to next.
We got a great show for you today.
Let's go.
Well, after six straight days of gains, the market finally hit a speed bump yesterday with the S&P and NASDAQ both dropping about 0.3%.
Now, looking forward to today, we have a lot of stuff going on.
First up is the Fed meeting.
The Fed meeting wraps up this afternoon.
And just like all the Fed meetings this year, no rate cuts are expected, despite the constant pressures from President Trump.
investors will still be paying attention to Jerome Powell's press conference for any hints,
winks, or clues of a rate cut at the next meeting. Right now, the markets are only pricing
in a 60% chance of a rate cut at the September Fed meeting, and I'm sure those odds will shift
depending on what Jerome Powell says in the press conference. One reason the Fed has been waiting to cut
rates is because of tariffs. They're worried that tariffs could reignite inflation, and they don't
want to cut rates to make the situation worse. But according to all the recent data, tariffs haven't
had a meaningful impact on inflation just yet. And with all these trade deals being announced in
the trade picture coming into clarity, it could set the table for a September rate cut. So we'll see
what Jerome Powell says and what its tone is this afternoon in this press conference. That'll tell us
a lot. The Fed will announce their decision on interest rates at 2 p.m. Eastern and Jerome Powell's
press conference will start around 2.30. So I'll definitely be tuning into that. But that's not the only
thing we're paying attention to today because after the market closed, we're getting earnings from
Microsoft and meta. So tomorrow's
episode is going to be stacked. You definitely don't want to miss that one. Maybe even consider
hitting the notification bell on Spotify if you want to be notified as soon as the episode goes
up. And if you guys want bonus content in an instant reaction to the Fed meeting today,
follow our Instagram account. We'll put a link in the description. Let's run through some
headlines. Starting with Starbucks. Starbucks just reported earnings and things are still kind
of lukewarm over there. The company's sales and profits both came in
below expectations in Q2 with comparable sales dropping 2% and profits coming in at 50 cents a share,
which was much worse than the 65 cents a share that Wall Street was expecting.
Starbucks has now reported a drop in same store sales for six quarters in a row.
Not a good streak.
Now, the company has been in full turnaround mode since bringing on new CEO Brian Nicol,
who, by the way, was previously running Chipotle and helped turn that company around.
And he's trying to do the same at Starbucks.
Starbucks has been revamping their stores to cut wait times.
in his words, bring back the warmth and human connection that defined Starbucks back in the day.
I know it might be hard to believe for some of the younger people out there, but Starbucks used to be
a spot that I used to go hang out with my friends after school.
That's definitely not the case anymore.
And Brian Nichol is trying to bring that back.
So Brian Nickle is closing down those mobile-only stores and instead the new Starbucks stores
will be an actual place to sit and drink your overpriced milkshake, I mean latte.
Starbucks is also planning to spend $500 million to increase.
staffing at U.S. operated stores, hoping that more baristas and better service will bring customers
through the door. I think it's a good start, but none of those changes have impacted the numbers yet.
Now, Brian Nichol did promise to unleash a wave of innovation in 2026, whatever that means,
but investors were eating that up because Starbucks stock is up more than 5% this morning at the time
of this recording. The company also had some positive news coming out of China, which is Starbucks's
second biggest market. They saw sales jump 2%, which is the first time they've seen positive.
growth since Q1 of 2024. The company attributes that turnaround to cutting prices and offering more
sugar-free options. So Starbucks's turnaround plan is still brewing. The numbers haven't fully
bounced back yet, but investors are giving Brian Nickel time to cook. Let's take a quick break
from earnings and talk about a big acquisition in the cybersecurity space. Palo Alto Networks is
acquiring the Israeli identity security firm CyberArk in a $25 billion deal. CyberArk is one of the
leading companies in what's called privileged access management. They help secure sensitive information
and serve as a gatekeeper for who can access certain data inside a company. They're basically
like a digital bouncer for the enterprise. And this deal will give CyberArg shareholders
$45 a share, which is a 26% premium from Friday's close. This is the second major M&A deal in
the cybersecurity space. Google made headlines back in March with a $32 billion purchase of WIS,
and now you have Palo Alto making this move. I think these companies are,
betting that cybersecurity is going to become even more crucial as cyber attacks increase in the age of AI.
In fact, Palo Alto CEO Nikesh Aurora called this a strategic play to solve the upcoming problem
with agentic AI.
And he said that CyberArx tools are critical for the next wave of cyber defense.
Now, what's funny is that Wall Street isn't quite loving this deal for Palo Alto.
Their shares are down around 8% this morning at the time of this recording.
But some analysts on Wall Street, like Dan Ives, are calling this a home run deal.
he says that this could spark a fresh wave of consolidation across the cybersecurity space.
He calls out names like Z-scaler, crowd strike, and checkpoint, potentially next on the M&A dance card.
So yeah, cybersecurity seems to be hot right now, and it's definitely a sector to keep an eye on over the next few months.
It also probably means we're going to have to do like six-factor authentication just to access
our work emails at some point.
Let's talk about some stocks making moves today.
Harley Davidson shares are revving higher this morning.
after reports that the motorcycle manufacturer is looking to offload their financing business
and a deal worth $5 billion.
According to Bloomberg, Harley is in talks with private equity giant KKR
and Pacific Investment Management to sell off its loan portfolio and motorcycle financing arm.
The financing unit makes up 20% of Harley's total revenue and provides loans to Harley dealers
to help buy inventory and to customers for motorcycle purchases.
This is coming at a time when Harley's core business is struggling.
The company just dropped Q2 earnings this morning, and they missed on profits and the declined to provide
annual guidance. On top of that, the revenue was down a whopping 19% as demand for motorcycles
continue to slide and tariffs add even more pressure. So yeah, Harley is struggling to sell motorcycles,
but they're still able to make a solid exit on their financing side, which is investors excited
and shares are up more than 20% this morning. Now, on the flip side, Mondalese, the company behind
Oreos and Chips Ahoy is seeing their stock drop more than 5% this morning after the company
reported a 3% drop in North American sales. Mondalise is blaming the pullback on consumer
anxiety over the economy and higher prices. Mondalise had to hike prices earlier this year in
response to Coco hitting all-time highs thanks to weather and supply chain issues in West Africa.
Now, supply of cocoa has since improved, but those higher cocoa costs are starting to hit
Mondalise's bottom line. The company reiterated that it expects a 10% drop in
earnings this year because of cocoa supply disruption. Now before you start blaming GLP1 drugs like
OZempeg for the drop in sales, Mondalese actually made this clear on their earnings call that
that's not the issue here. It just seems like people are cutting back on buying Oreos because of the
economy. But they are hoping that a new collab with Hershey's can sweeten things up this fall. The company
is launching Rees-flavored Oreos soon. And there's also going to be Oreo-flavored Rees cups as well.
You know, I'm not a big Oreos or Reeses guy, so I'm not sure.
of a wild collab like that's going to fix their issues. But hey, at least they're trying,
you know? Let's wrap the show with a fun fact. Elon Musk's boring company is set to build
tunnels under Nashville. The company is looking to build a 10-mile tunnel loop to connect the city's
downtown to the local airport. Now, the project still needs approval, but Tennessee's governor
said the tunnel could be ready as soon as fall of 2026, which is a pretty quick turnaround.
You know, I gotta say the boring company is probably the least talked about of Elon's companies.
And it's probably because the company hasn't had much success since they launched back in 2017.
Back when they first launched, Elon was hyping up innovation and tunneling and hyperloop technology
that would travel super fast and reduce street traffic.
But none of that has really come true.
In fact, the only project the boring company has completed has been the Las Vegas one,
where they dug a tunnel around the Las Vegas Convention Center.
And what's funny is, in order to take that tunnel, you have to ride in a Tesla,
which are driven by humans.
They're not even self-driving yet.
So I don't know why they couldn't have just gone
with a conventional metro system or monorail, you know?
I'm not sure if that's going to be the same way
for this Nashville project.
Hopefully it's more autonomous.
But if this project is completed quickly
and is a success,
maybe the boring company
will start getting more projects around the country.
Well, all right, guys, that's the rundown for today.
Hope you guys enjoyed today's episode.
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