The Rundown - Target Sales Rise for 1st Time in Five Quarters, Netflix Increases Ad Sale Commitments by 150%

Episode Date: August 21, 2024

Stock market update for August 21, 2024.

Public.com presents the rundown, your daily market update in five minutes. My name is Zadadmani, and today is Wednesday, August 21st. In today's episode, we tell you why Netflix stock is making all-time highs and why we might start seeing more ads on there. Also, we recap Target's surprisingly good earnings and tell you how they turned around their business. Then stick around to the end of the show to find out how much a bar of gold cost and how you can invest in it. Gold's having a great year.

All right. No. Well, the eight-day winning streak has come to an end. Both the S&P and NASDAQ finished lower on Tuesday. And I'll take the blame for this one, okay? Because I was hyping up the winning streak on yesterday's show and I think I jinxed it. I just shouldn't have said anything. You know, it's kind of like baseball. When a pitcher is throwing a no-hitter, you're not supposed to say anything. So that's my bad. But the good news is it looks like the stock market seems to be out of its funk from earlier this month. The S&P is not too far away from making all-time highs. Now all the attention turns to Jackson Hole. Wyoming as Jerome Powell and the Fed gang gathered there starting today. There's going to be central bankers and economists from all over the world. Seems like a huge econ nerd fest. And I mean,

I'm not going to lie. I really wish I was there. Jerome Powell is expected to give a speech on Friday morning. The Fed's not going to make any policy decisions this week. Like they're not going to cut rates. But I'm sure we're going to get some hints in that speech. So I'm really looking forward to it. We'll obviously recap all the important stuff here on the rundown. So make sure you guys are subscribed to the pod. Maybe next year we'll record the pod from Jackson Hole. Who knows? We can do some on the ground reporting. You know, rub shoulders with Jerome Powell. I can ask him about why he always wears a purple tie. But for this year, I'll just have to watch it here in Houston. Also, it's like 70 degrees in Jackson Hole right now and 101 with 80% humidity in Houston. So it'd be

nice to get away from the heat for a couple of days. Also, we're going to be getting payroll revision data later today, which will grab attention of investors and economists. See, every year, the Bureau of Labor Statistics releases updated numbers on payroll growth. And, you Usually it's not a big deal, but it's getting more attention than usual because of how closely the Fed is relying on the labor market to measure the health of the economy and guide its interest rate policy. This year, economists are expecting job growth to be far lower than what was initially reported. In fact, Goldman Sachs predicts there could be a downgrade revision as big as one million jobs. Any number over $501,000 would be the largest revision in 15 years, and it would suggest the labor market is much cooler than everyone had thought. So that number is coming out later today.

We'll tell you more about it in tomorrow's episode. So again, make sure you guys are subscribed to the pot. Let's run through some headlines. Target just reported earnings this morning, and I got to say, they crushed it. Target's comparable sales grew by 2% in the second quarter. That's the first time the company has seen sales growth in five quarters. It's been a while. And their profits also jumped by 40% to $1.2 billion.

Target says the growth has come because of higher store traffic and increased digital sales, which was up more than 8% last quarter. Over the last year or so, Target saw their profits and sales get hurt because of increased inflation as more people spent money on groceries, leaving less money for scented candles and clothes and other knickknacks that Target has now become known for. But over the last few months, Target has started to cut prices aggressively, and that seems to be bringing back customers. I feel like I've gotten more text for my wife than ever to pick up her Target order

from curbside, so whatever they're doing is working on my wife. I mean, I've even caught myself buying some groceries at Target over the last few weeks. weeks. So things are turning around at Target and investors are pumped. Target stock is up more than 13% in the pre-market in reaction to these earnings. Let's shift gears and talk about Netflix. Looks like Netflix's ad business, it's starting to make a splash. The streaming giant revealed that it saw its ad bookings rise 150% in upfront ad sales this year. In the entertainment industry, the upfront is where streamers and other TV networks gather with major advertisers. They all get together, and the goal for these streaming companies and these television networks is to sell as much

advertising space as possible. This year was Netflix's second ever up front ever, and it looks like advertisers are buying Netflix ads. According to Netflix's president of advertising Amy Reinhardt, Netflix is going to have advertisers from all key categories, including consumer package goods, tech, entertainment, auto companies, quick service restaurants, and retailers. So it looks like Netflix's investment in their ad tech, along with all the content they're going have this year is starting to pay off. Remember, Netflix is going to broadcast NFL games on Christmas Day this year, which they paid around $75 million for. They also bought live rights for WWE, and sports is perfect for advertising. Along with sports, they're going to have a new season of Squid Games and

Outer Banks, and advertisers want to put their ads in front of that content. Now, if you have an ad-free tier of Netflix, you're probably not going to see these ads, but according to the Financial Times, around half of the new streaming signups are ad-supported accounts. And with advertisers spending less money on TV ads because nobody watches cable anymore, that ad money is now going towards streaming. And Netflix is trying to get some of those dollars. Looks like it's working so far. Amazon also entered the ad-supported game for its streaming service about five months ago. And then you have Max, Disney and Paramount. They all have ad tiers now as well. But the market seems to think that Netflix is going to be the winner here. And as a result,

Netflix stock hit all-time highs yesterday. Let's talk about some stocks making moves today. Shares of T.J. Max companies are rising after the retailer reported earnings and raise. its full year guidance. The owner of Marshalls, home goods, and obviously T.J. Max saw a 4% jump in same store sales last quarter. T.J. Max is seeing some success right now because consumers are looking for a more cost-efficient option, according to CNBC. And I've personally found some great deals at Marshalls and T.J. Max. So this checks out. Shares of TJX are up around 5% in the pre-market on this news. Not all retailers are doing great this morning. Macy's reported earnings this morning. They beat estimates, but the company is not too optimistic about its future.

Same store sales were down 4% in the quarter. That's below expectation. Consumers were more cautious in the quarter. Macy's management used the word discriminating to describe the consumer last quarter, which might be the most corporate BS word to use to cover their backs. Macy's expects things to continue to get worse and they lowered their net sales and same store sales guidance. Not a surprise here, but Macy's stock is down 8% on this news. Let's wrap the show with a fun fact.

A gold bar is now worth over $1 million. for the first time ever. The price of gold has surged this year. It's up more than 20% since the start of the year. An ounce of gold hit a record $2,500 this week. And a typical gold bar, that's the kind that looks like a brick, it weighs about 400 ounces. That's like 25 pounds.

So just doing some simple math here, that would make the bar of gold a million bucks. Now, if you want to buy gold, you don't have to buy a full bar of gold. They do sell smaller gold bars like Costco sells one ounce gold bars. And they're super popular because Costco keeps selling out. Every time I go to Costco to try to buy a gold bar, it's always sold out. You can also invest in gold by buying a gold ETF, like ticker symbol GLD.

You can find that on the public app. And that way, I guess you don't have to carry around the physical gold bars. But I think some people like having the physical gold. So yeah, gold having a great year. I'm getting a lot of I Told You So's from my parents. Well, all right, guys, that's the rundown for today. Thank you guys so much for tuning in. If you guys enjoyed the episode, don't forget to hit us with a five-star rating on Apple and Spotify.

And if you are listening on Spotify, don't forget to find the fun down. vote in today's Spotify poll. That engagement really does help us out. Thank you guys so much for listening. Shout out to Connor and Mike for all the help behind the scenes and 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. Rounddown guests are not financial advisors and are not affiliated with public holdings or subsidiaries. You should make your own financial and investment decisions or consult.

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