The Rundown - Stocks Rally as Powell Signals 'Time Has Come' for Rate Cuts, Uber Partners with Cruise

Episode Date: August 23, 2024

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Public.com presents the rundown, your daily market update in five minutes. My name is Zadadmani, and today is Friday, August 23rd. In today's episode, we tell you what Jerome Powell said in his speech today in Jackson Hole. Kind of sounded like he was taking a victory lap. We also tell you about Uber's deal with another autonomous driving company and why Uber is making these partnerships. Then stick around to the end of the show to find out how many crayons Crayola makes for back-to-school season. It's a lot.

All right, let's go. Not a great day for the stock market yesterday. Both the S&P and NASDAQ were in the red for pretty much the entire day. The S&P dropped by 0.9% and the NASDAQ was down more than 1.5%. So it was a pretty decent sell-off. But today all the attention turns to Jackson Hole and Jerome Powell's speech. He just wrapped up his speech. I watched the whole thing.

And he pretty much confirmed, we're getting rate cuts in September. Jerome Powell said, and I quote, the time has come for policy to adjust. If that's not dropping hints, I don't know what is. The whole speech was about 20 minutes, and usually Jerome Powell's press conferences have gotten pretty boring. This one was a good one. He talked about how the Fed thinks that inflation is back on a sustainable path to 2%. And he also mentioned how the labor market is cooling, with job gains being solid, but slowing. He kind of walked through the last four years of the Fed's policy.

He talked about the mistakes the Fed made by not raising rates sooner because they thought that inflation was transitory, then they found out that it wasn't transitory. Again, highly recommend you guys watch the whole speech. But the overall takeaway is rate cuts are coming because the Fed's not worried about inflation anymore and more concerned about a weakening job market. So we're finally getting rate cuts in September. Markets are loving it. Stocks are green across the board in reaction to that speech.

Let's run through some headlines. Uber is partnering out with another self-driving company. This time, it's Cruise. You guys might have heard of Cruz. They've been around for a while now. They were founded back in 2013. And then General Motors ended up buying a majority stake in the company back in 2016. Next year, Cruz is going to launch an undisclosed number of Chevy Bolt autonomous vehicles,

and those vehicles are going to be available on the Uber app. You know, it's been a pretty tough stretch for Cruz over the last year or so. The company was forced to suspend operations and recall 950 driverless cars off the road after a major crash last year. But then in June, Cruz took a step forward and resumed testing supervised autonomous driving in Phoenix, Houston, and Dallas. Honestly, I didn't know they were testing in Houston. I'm going to try to find one of these things.

Now, this deal with Uber is similar to the one that Uber has with Waymo. Waymo is Google's driverless car division, and they've been available through the Uber app in Phoenix since October. You know, Uber used to have their own autonomous vehicle division, but they sold it back in 2020. I think Uber now just wants to become the all-in-one app when it comes to transportation, and that's why you see them partnering with taxi companies all over the world and now autonomous vehicle companies. Because I bet developing these autonomous vehicles is really expensive and really hard.

So why go through all that when you can partner with companies that are building their own autonomous vehicles and still get a cut from all the rides that go through your app. I think it's a smart business move and Uber stock is hovering near all-time highs. By the way, these cruise vehicles will be available on the Uber app as soon as next year. So keep an eye out for that. Let's shift gears and talk about the housing market. It looks like the housing market is starting to unfreeze a bit. Sales of previously owned homes in July were up 1.3% compared to June, according to the National

Association of Realtors. This was the first time that sales have gone up in front. five months. Now, sales are still down two and a half percent compared to last year, so things aren't back to normal, but at least they're headed in the right direction. A few interesting tidbits here, all cash offers made up 27 percent of home sales in July. That's much higher than historical averages. And first time homebuyers made up 29 percent of sales in July. You know, with interest rates starting to come down, especially with the feds planning to cut rates pretty soon, I think we might see more activity in the housing market. But prices still remain

pretty high though, the median price of an existing home in July was 442,000. That's up 4.2% from last year. So there's not much relief when it comes to prices. Let's talk about some stocks making moves today. Shares of Kava are surging this morning after the fast casual Mediterranean restaurant reported earnings and they questioned, we can't seem to get enough of Kava. Revenue was up 35% and same store sales were up 14%. So that means that existing stores are selling more stuff. Both those numbers beat Wall Street estimates. Kava said that store traffic also grew by nine and a half percent. Kava CEO credits their new grilled steak option as one reason that customers keep coming back to the restaurant. And Kava keeps expanding too. They opened up

18 new locations last quarter and now they're up to a total of 341. The company is now projecting the open between 54 to 57 new locations this year. That's more than what they previously expected. So they continue to expand, sales continue to grow and investors are pretty high. the stock is up more than 7% in reaction to these earnings. Kava's market cap of over $11 billion is more than wingstop. It's more than Wendy's. It's more than Shake Shack, more than Sweet Green. They might overtake dominoes in market cap pretty soon.

I mean, I know that Kava stands are pretty loyal, but that seems a little bit rich to me, not going to lie. No, on the flip side of the stock not doing so good this morning is Las Vegas Sands. The casino and resort company was downgraded by the bank UBS to neutral with a price target of $44. UBS cites ongoing challenges in Macau for the reason for the downgrade. Now, what's funny is that the company is called Las Vegas Sands, but they don't own or operate any more properties in Las Vegas anymore. They're just headquartered there.

The company used to own and operate the Venetian and Palazzo, which are on the Vegas strip, but they sold those two properties back in 2022. Now all their properties are in Macau, and they also have one in Singapore. They should probably just change the name at this point. It's kind of confusing, you know. Las Vegas Sand stock is down around. in reaction to this downgrade. Let's wrap the show with a fun fact. Crayola's factory is making 13 million crayons a day right now as kids start going back to school. Back to school season is in full

bloom right now. My daughter just started kindergarten and part of her supply list was a box of crayons. Almost half of Crayola's annual sales occur between July 4th and Labor Day. So the Crayola factories have to start cranking out these crayons to meet the demand for all the kids going back to school. By the way, Crayola hasn't changed their packaging at all. It's still that iconic yellow green pack. I kind of like that. And if you try to look up Crayola on the public app, you're not going to find its stock because it's a private company.

It's actually owned by Hallmark, the company that makes all the cards and the cheesy Christmas movies. And Hallmark is also privately held. So you can't buy stocks in Crayola or Hallmark, but you can buy and sell pretty much any stock that is publicly listed on the public app. So yeah, shout out to public. Go check them out. And a quick fun fact, you can also lock in a 7% yield

on your cash with their new product, which allows you to buy corporate bonds. I don't think I've ever seen any app let you invest in corporate bonds. So if you're interested in that and you want to lock in your high yield, go check out the public app. Well, all right, guys, that's the rundown for today. That's the rundown for this week. This was a big week for the pod. The podcast crossed 3,000 5 star ratings on Spotify, and we also crossed 30,000 subscribers

on Spotify as well. I mean, it's crazy to see all the engagement, everyone voting in the polls, everyone that leaves comments. Thank you guys so much. It really does mean a lot. And we're going to keep pumping out great content every single day. So thank you guys again for listening. Shout out to Connor and Mike for all the help behind the scenes. Have a great weekend, everybody. And we'll see you guys back here on Monday. 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. Learn more at public.com disclosures. In partnership with Zayidimani, brokerage services for U.S. listed, registered securities are offered by Open to the Public Investing Incorporated, member FINRA and SIPC.