The Rundown - Tesla Investors Shrug Off 'Cybercab' Reveal, Bank Earnings Roll In

Episode Date: October 11, 2024

Stock market update for October 11, 2024.

Public.com presents the rundown, your daily market update in five minutes. My name is Zadadmani, and today is Friday, October 11th. In today's episode, we recap the Tesla Robotaxi event. I thought it was cool. Wall Street didn't love it so much. Also, AMD showed off their latest AI chip that they think is better than Nvidia. We'll tell you about that. Then stick around to the end of the show to find out why bank stocks are up

and why Bitcoin Options Trading might be coming soon. All right. Let's go. Stocks were in the red for most of the day yesterday after a slightly hotter than expected CPI report. The S&P finished the day down 0.2% and the NASDAQ was down 0.1%. Bitcoin also saw a dip dropping below $60,000, but did end up recovering and is now back above $61,000. We're going to talk more about Bitcoin near the end of the show. I think the CPI report yesterday definitely caused some market jitters.

I think investors might be worried that the Fed might hold off on cutting rates for a bit to ensure that inflation keeps heading lower. In fact, the markets now think there's a 15% chance of no rate cuts at the November meeting. This is according to the CME Fed watch tool. A week ago, there was a 0% chance of no rate cuts. So vibes have definitely shifted because of this inflation report coming in slightly hotter than expected.

We did a more detailed recap on the CPI report on yesterday's episode, so go check that out if you missed it. Now personally, I still think the Fed will move forward with a 25 basis point cut at the November meeting. we'll have to see. We did get another inflation report this morning, this time the PPI report, which measures inflation at the wholesale level, and it came in at 1.8%, which is below expected. So maybe that'll calm some market jitters today. Let's run through some headlines. We got to start with the Tesla Robotaxy event. It finally happened last night, so much hype

going into the event, and we got a chance to see what Tesla has been cooking up. Now, I thought the event was pretty cool, even though it wasn't. light on the details and investors didn't seem to like it so much. But, well, it gets all that. First of all, the event started an hour late. It was supposed to start at 7 p.m. Pacific, 9 p.m. my time. And I was just locked into the live stream waiting for this thing to start and nothing happened for an hour. But once things got started, we saw some pretty cool stuff. Elon rolled up to the event in the cyber cab concept car, which looks like it's straight from a sci-fi movie. And this car is super unique. It has no steering wheels, no pedals, and it drives fully by itself. Elon said that consumers

would be able to buy this car for a price tag of under $30,000. And it's expected to go into production before 2027. So it's still a few years away. Tesla also showed off their robovan, or like Elon pronounced it, Robovin. Similar to the cyber cab, it has no steering wheels, no pedals, and it can carry up to 20 people. So that was the big reveal. Honestly, the presentation wasn't that long. It was around 30 minutes. They showed off a couple cool cars, gave some general timelines, and that was it. So while it was pretty cool, it wasn't enough to impress investors. Tesla stock is actually down more than 6% in the pre-market. And in fact, Uber stock is up more than 8%.

So it just tells you everything you need to know about market's reaction to this. Morgan Stanley came out with the report saying that there was a disappointing lack of detail and substance to this presentation. And it's hard to disagree. There was nothing in the presentation that could provide a short-term boost to Tesla. Everything shown off was a grand vision for the future. Now, in the event last night, Elon did say that fully autonomous versions of their full self-driving software will be coming to Texas and California next year for the existing Model 3 and Model Y.

So that's something to look forward to. If it comes out, I'll be one of the first to try it, and I'll let you guys know how it goes. Oh, I've almost forgot to mention. Tesla also showed off their humanoid robot, which they call Optimus, and that might have been the coolest thing that I saw last night. It looked like it was straight from the movie I Robot. This robot was talking to people. He was hanging out, cracking jokes, bartending. I mean, that was cool.

Now, again, there's no timeline on when this will ever go on sale, but I'm interested. Also gave me slight Terminator vibes. Sticking with the AI theme, let's talk about AMD. AMD is putting Nvidia on notice. They showed off their new AI chip that they call the Instinct MI325X. AMD says that this chip is better than NVIDIA's H-100 AI chip. Remember, the H-100 AI chip is what turned NVIDIA into an AI powerhouse and probably the main reason they're a $3 trillion company today.

The Instinct MI325X, which is a terrible name, they should change that. It's going to begin production in 2024, according to AMD. And if this chip takes off, it could be a big deal for NVIDIA because more than 40% of Nvidia's revenues come from big tech players like Microsoft, Amazon, and META. If those big tech companies decide that the AMD chip is better and they fully switch to AMD, that could have a massive impact on Nvidia's business. At the very least, it's going to put pricing pressure on Nvidia. Because right now, Nvidia can set the price whatever they want and people will buy.

So yeah, Nvidia and AMD are ready to go to battle. Now, the initial reaction for the market doesn't see AMD as a threat to Nvidia. Invideo stock is up close to 7% this week, while AMD's stock is down 4%. Let's talk about some stocks making moves. today. Let's start with big banks because they've been the early winners this morning. JP Morgan's stock is up more than 3% this morning after they reported better than expected earnings. They beat on both revenue and profit estimates and JP Morgan saw their net interest income rise by 3%. This is the money that banks make from lending money. Also,

JP Morgan's investment banking fees jumped 31% in Q3. So solid quarter for JP Morgan. Wells Fargo stock is up more than 4% this morning, even though their earnings weren't that great. the revenues and profits were actually down. And most notably, Wells Fargo saw their net interest income drop by 11%. But yet their stock went up. So not sure what I'm missing there. And finally, BlackRock stock is up more than 3% this morning after they reported stronger than expected earnings.

Their revenues were up 15% last quarter and profits were up 5%. And BlackRock also hit a new key milestone. They now have over $11.5 trillion in assets under management. So solid quarter for big banks in Q3, except for Wells Fargo, but stock is still up, though. Now, on the flip side, shares of Stalantis are down after the auto giant announced a big shake-up of its executive team. Stalantus is the company behind Jeep, Maserati, and more.

They're parting ways with their CEO, Carlos Tavares, in early 2026. That's when he's supposed to retire. On top of that, the company's CFO is also leaving the company. Now, earlier in the summer, Stalantz had the company expected to fall into a negative cash flow territory this year, losing between 5 to 11 billion euros as the company looks to offer discounts to help boost its sales in the U.S. There's currently no successor to the CEO position, but the company said its new chief would be named at the end of 2025.

So they have some time to figure it out, but investors don't want to wait around to find out. Stalantis shares are down more than 4% on this news. Let's wrap the show with a fun fact. You will soon be able to trade options for Bitcoin ETFs. A couple weeks ago, the SEC approved listing. and trading of options for Black Rock's Bitcoin Spot ETF. It's ticker symbol I-B-I-T. So yeah, Bitcoin Options come into a brokerage app near you. Like, for example, the public app. Link in the bio to go check it out. I mean, I wonder how popular these are going to get. I mean, based on the popularity of the

Bitcoin ETFs, these options are probably going to be just as popular. The options trading has increased over the last couple years. And you add the Bitcoin element to it, it probably has a chance to be pretty popular. And I wonder what kind of impact this will have on the underlying asset that is Bitcoin. And what kind of strategies people utilize? Like, you know, imagine doing covered calls on these. So yeah, a lot of stuff happening in the world of Bitcoin and Bitcoin just continues to be embraced by traditional finance. Imagine that two years ago. Well, all right, guys, that's the rundown for today. That's the rundown for this week. Hope you guys enjoyed today's episode. If you did, consider giving us a five-star rating on Apple and Spotify. And if you're listening

on Spotify, don't forget to vote in today's Spotify poll. And leave a comment as well. You can leave comments on Spotify these days. Thank you guys so much for listening. Shout out to Mike and Connor for all the help behind the scenes. 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. Run-down guests are not financial advisors and are not affiliated with public holdings or its subsidiaries.

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