The Rundown - Super Micro Joins S&P 500, Apple Hit with $2B EU Fine

Episode Date: March 4, 2024

Stock market update for March 4, 2024. Apple Fined $2 Billion by E.U. for Using App Store to Thwart Competition (NYTimes) ‘Dune: Part Two’ Soars Past Box Office Expectations (Barron's) Super Micro shares jump as AI-bet gears up for S&P 500 entry (Reuters) Rivian, Lucid's 2024 production targets disappoint as EV demand wanes (Reuters) Microsoft hasn’t been worth this much more than Apple since 2003 (MarketWatch) The content of the podcast is for general and informational purposes only. All views presented in this show reflect the opinions of the guest and the host. You should not take a mention of any asset, be it cryptocurrency or a publicly traded security as a recommendation to buy, sell or hold that cryptocurrency or security. Guests and hosts are not affiliated with or endorsed by Public Holdings or its subsidiaries. You should make your own financial and investment decisions or consult respective professionals. Full disclosures are in the channel description. Learn more at Public.com/disclosures. Past performance is not a guarantee of future results. There is a possibility of loss with any investment. Historical or hypothetical performance results, if mentioned, are presented for illustrative purposes only. Do not infer or assume that any securities, sectors or markets described in the videos were or will be profitable. Any statements of future expectations and other forward-looking statements are strictly based on the current views, opinion, or assumptions of the person presenting them, and should not be taken as an indicator of performance nor should be relied upon as an investment advice.The content of the podcast is for general and informational purposes only. All views presented in this show reflect the opinions of the guest and the host. You should not take a mention of any asset, be it cryptocurrency or a publicly traded security as a recommendation to buy, sell or hold that cryptocurrency or security. Guests and hosts are not affiliated with or endorsed by Public Holdings or its subsidiaries. You should make your own financial and investment decisions or consult respective professionals. Full disclosures are in the channel description. Learn more at Public.com/disclosures. Past performance is not a guarantee of future results. There is a possibility of loss with any investment. Historical or hypothetical performance results, if mentioned, are presented for illustrative purposes only. Do not infer or assume that any securities, sectors or markets described in the videos were or will be profitable. Any statements of future expectations and other forward-looking statements are strictly based on the current views, opinion, or assumptions of the person presenting them, and should not be taken as an indicator of performance nor should be relied upon as an investment advice.

Welcome to the rundown, your daily market update in around five minutes. My name is Zadadmani, and today is Monday, March 4th. In today's episode, we recap the stock market performance from last week and look ahead to the finance calendar this week. There are still a ton of companies reporting earnings, especially retailers. And these earnings could give us a better picture of how the U.S. economy is doing. We also got some breaking news this morning. Apple is getting hit with a $2 billion fine by the EU. We're going to dive into the fine and why Spotify might be the reason.

for Apple's antitrust issues in Europe. And finally, we wrapped the show by highlighting some stocks making moves today, like a very popular AI company, which is up big again today because it's being added to the S&P 500 this month. All right, let's get into it. Let's start the show with a quick recap of the stock market last week. Last week, the stock market had another winning week with the S&P and NASDAQ both closing in at record highs.

This was the first record closed for the NASDAQ since November of 2020. The stock market continues to be on a hot street, being up 16 of the last 18 weeks, which hasn't happened since 1971. Look, I know everybody's talking about LeBron hitting 40,000 points. That's very impressive, but what the stock market is doing right now is pretty impressive too. But it's not just stocks, though. Crypto is getting in on the fun as well. Last week, Bitcoin had a monster week up more than 20%. And some of these altcoins are starting to fly as well.

The total market cap for crypto has now crossed $2 trillion. dollars. And funny enough, Nvidia's market cap also crossed two trillion dollars for the first time last week as well. So the vibes are good all the way around. This week should be another fun one because we're going to be getting earnings from a lot of retail companies that you've probably heard of. Companies like Target, Ross, Nordstrom, Abercrombie, whose stock has quietly been an absolute monster, are all reporting earnings this week. And investors like to keep an eye on retail earnings because it gives us a sense of how consumers are doing right now. If these retailers report solid earnings, it could be yet another sign of strong retail spending. Also, on Friday of this

week, we're going to be getting the jobs data for February. That's going to tell us how many jobs were added in the U.S. economy for the month of February. So yeah, another fun week ahead. So make sure you guys are tuning in every day this week to this show to stay in the loop. All right, let's talk about the big news that broke this morning. The EU is fining Apple 1.8 billion euros. It's about $2 billion U.S. dollars over antitrust violations regarding music streaming. So this all started like five years ago back in 2019 when Spotify, which is a European-based company, by the way, filed a complaint against Apple. Spotify complained that Apple prevented Spotify from telling its users of cheaper subscription service options outside of the app store.

See, Apple famously takes a 15 to 30% cut from all transactions happening through the app store. So if you sign up for Spotify through the app store, Spotify only gets to keep 70% of that monthly subscription fee. The other 30% goes to Apple. But if you sign up for Spotify outside of the app store, like through Spotify's website, they don't have to give Apple any money at all. And Spotify's biggest complaint is that Apple would not allow Spotify to inform users about the lower prices that were available for users that signed up for Spotify directly on Spotify's website.

It was against App Store policy. And Spotify thought that was unfair, anti-competitive, and complaining to the EU back in 2019. And five years later, the EU agrees with Spotify, and Apple gets hit with a $2 billion fine. Now, developers and companies have been complaining about Apple's App Store fee for a long time. But Spotify especially because they have to compete with Apple Music. And obviously, Apple Music doesn't have to pay the 30% Apple tax. And so Spotify thought that was really unfair. Now, obviously, Apple disagrees with this ruling and they plan to appeal the decision.

They point to the fact that Spotify is still the dominant player in streaming, and that this decision by the EU just solidifies Spotify's. dominance, which again is a European-based company. I can kind of see both sides to this, but it's really hard to defend Apple not allowing developers to notify users on ways to get a cheaper subscription by bypassing the app store. So I guess we'll see what happens with the appeal. This might take years to figure out as it goes through with European courts. Spotify being a European company probably helps them though, but we'll see what happens next. All right, let's talk about some stocks making moves today. Starting with Supermicro, ticker symbol SMCI, this company has been

an AI darling this year. This company makes powerful servers for AI applications and the stock is up over 200% just this year. Well, things keep getting better for SMCI investors because the stock is up another 15% in the pre-market trading at the time of this recording around 9 a.m. Eastern because it was announced that the company was going to be added to the S&P 500 starting on March 18th. Remember, the S&P 500 is made up of 500 companies and every quarter companies get removed and added. Well, this quarter two companies are being removed whirlpool and zion bank and those companies are being replaced by smc i and deckers outdoors which is a company that makes hoka sneakers and ugs decker outdoor stock is also up around 4% today as well so shout out to all the sm i investors the stock chart for this company

is just insane especially if you look at the last two years i just absolutely insane another company up big today is macy's macy's stock jumped more than 15% this morning after private equity firm arkhouse management and Brigade Capital raised their offer to buy the company to $6.6 billion, which is around $24 a share. See, late last year, these two firms offered $5.8 billion to buy Macy's, which Macy's ended up rejecting. So now that they've sweetened the offer, let's see what Macy's decides to do now. Finally, on the flip side, a company not doing so good is Neo. The stock for the Chinese EV companies is down more than 2% this morning. The company's going to report earnings on Tuesday of this week, and just the vibe around EV companies has been down.

which might be the reason why the stock is trading lower this morning. Investors seem to anticipate a slowdown in Neo's business. Let's wrap up the show with a fun fact. Today's fun fact is about Apple. Apple has held the title for most valuable company in the world for most of the last decade. Well, now they've dropped down to number two by a pretty big margin to Microsoft. Microsoft is now worth more than $300 billion in Apple. Just 18 months ago, Apple was worth over $700 billion in Microsoft.

So the fact is Microsoft is worth over $300 billion more than Apple now, was just crazy. A lot of it has to do with a huge surge in Microsoft stock price because of the AI hype and Apple's growth just kind of slowing down a bit. Investors are excited about Microsoft and not really excited about Apple right now. All right guys, that's all I got for you guys today. Thank you guys so much for listening. Remember, we have new episodes every weekday this week where we're going to be covering stocks, crypto, corporate drama, all the stuff that you need to to know to stay in the loop. If you like the show, please hit us with that five star rating on Spotify and Apple really helps out the show. Thank you guys again for tuning in. We'll see you.

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. In partnership with Zaid Admani, brokerage services for U.S. listed, registered securities are offered by Open to the Public Investing Incorporated, member FINRA and SIPC.