The Rundown - Tesla Kicks Off AI Era with 'Cybercab' Event, CPI Cools in September

Episode Date: October 10, 2024

Stock market update for October 10, 2024. Download the Public app

Public.com presents the rundown. Your daily market update in five minutes. My name is Zadadmani, and today is Thursday, October 10th. In today's episode, we recap the latest inflation report that's surprising the markets this morning. We also preview the upcoming Tesla Robotaxi event and the expectation from Wall Street. Then stick around to the end of the show to find out why Domino's stock is up, Delta stock is down, and what percentage of Gen Z are saving for retirement. All right, let's go. Stocks continued to rally on Wednesday, setting record highs in the process. The S&P 500 jumped 0.7% to a new record high.

The NASDAQ was up 0.6%, putting it within 2% of a record high. And the Dow also jumped 1% to a new record close. But, you know, nobody cares about the Dow. So. And a quick update on oil prices. You know, they've been going up for the past couple weeks. In fact, last week, oil prices had their biggest jump of the year because of rising tensions in the Middle East. but over the last couple days, oil prices have dropped 5%.

So I guess the market seemed to be less concerned of tensions escalating. And back here in the States, we just got some new economic data, and it's a bit of a surprise. Inflation came in a bit hotter than expected. According to the CPI report, inflation in September was 2.4%, which is lower than the 2.5% from August, but higher than the 2.3% that was expected. It looks like much of that has to do with an increase in food and shelter prices. which saw the biggest jumps.

So inflation continues to cool. It continues to move towards the Fed's 2% target. It's just not cooling as fast as expected. So it'll be interesting to see how the markets end up reacting to this. Initial reactions don't look so great. I'm recording this before the market opens. And I see red across the board. But things can change fast.

So we'll let you know how things fully shake out on tomorrow's episode. Let's run through some headlines. Guys, the time has finally come. Tesla's Robotaxy event is happening tonight, and we're going to finally get to see what Elon Musk and the gang have been working on. There is so much hype going into this event. Remember, it was first scheduled to happen in August, but they ended up pushing it back last minute to October, which only built on the hype. Obviously, investors are going to be paying very close attention to this. Now, the rumors are calling for Tesla to show off a cyber cab prototype. Elon Musk has said

that Tesla's Robotaxis technology will be built into a new vehicle model that works on its own and has its own ride-hailing app. And this car is rumored to have no steering wheels, pedals, mirrors, or anything. So pretty different than like a Waymo self-driving car. The car is expected to have two front row seats and two doors that open upward like butterfly wings. I didn't think that butterfly wings were cool anymore, but Tesla might end up going with them, according to reporting from Bloomberg. Now, on top of the cybercats, there's speculation that Tesla will also show off a robo van that can carry 12 plus people. But beyond just showing off the prototype, everyone, especially investors want to know what kind of timeline are we looking at for these to go into mass

production. That seems to be the biggest uncertainty. Alliance Bernstein analyst Tony Sakonaki thinks that the self-driving taxi business is more of a long-term vision, but some on Wall Street like Wedbush's Dan Ives believes the event could be a watershed moment and will kick this AI era off at Tesla. So there's different sides to this. I tend to think it's more of the former. I mean, I have a Tesla and I've used the full self-driving mode and I wouldn't say it's ready for prime time just yet. But hey, maybe Tesla's made some improvements and they're ready to go full self-driving.

Guess we'll have to see. Dan I've said on a note this morning that the AI FSD represents a $1 trillion in value alone for Tesla over the coming years. So some pretty high expectations going into the event tonight, and I'll definitely be watching. The event starts at 7 p.m. Pacific,

which is 10 p.m. East Coast, 9 p.m. for me on the central time zone, which is pretty late. So if you don't want to stay up late, Don't worry. We'll watch the event and we'll be recapping it for you on tomorrow's episode. Now let's shift gears and talk about Pfizer. We mentioned them earlier in the week because they had come under attack by an activist

investor Starboard Value. Starboard Value is a hedge fund. They built over a billion dollar position in the pharma giant and they were looking to make some changes at Pfizer to help turn around the business. And Starboard's plan was to partner with the former CEO and CFO to assist in getting the company back on track. Well, it looks like the former CEO and CFO. They're not going to play ball.

They actually announced that they fully support Pfizer's current leadership and they're not going to be involved in the activist campaign. So, yeah, kind of awkward. I don't know what Starboard is going to do now because having the former CEO and CFO on board probably would have been pretty helpful given that these pharma businesses can be pretty complicated. So we'll see what Starboard ends up doing. Maybe they just end up selling their shares and dropping this campaign completely. I also wonder what caused the former CEO and CFO to switch sides so fast.

Anytime I hear news like this, the succession theme music just starts playing. in my mind. Let's talk about some stocks making moves today. Domino's is an early winter this morning after the company reported earnings. Their numbers were kind of a mixed bag. They're still experiencing growth, but Domino's did mention that they're facing difficult macroeconomic challenges that could impact their growth moving forward. In fact, the company cut their sales projections from 7% down to 6% for the rest of the year, and they also lowered the number of stores they expect to open globally over the next year. But investors still like the earnings enough, to send the stock higher. Shares are up around 1% this morning in reaction to these earnings.

Also, I don't know about you guys, but Domino still ranks number one for me on my pizza chain rankings. And their pan pizza, it's my personal favorite. I wonder if most people feel this way. Maybe I'm delusional. So let's make that deep poll on Spotify today. If you're listening to this episode on Spotify, tap today's episode and vote on your favorite pizza chain. Now, on the flip side, shares of Delta Airlines are sinking after they reported earnings and missed on estimates. Last quarter was pretty tough for Delta. They had some challenges they had to overcome.

The big one being the crowd strike outage, which shut down their systems, forcing them to cancel hundreds of flights for over a week. I just remember seeing scenes of people being stranded at Atlanta's airport. So that was a pretty big deal for Delta. And according to the airline,

that outage cost them over $380 million in revenue and reduced their earnings by $0.45 a share. And on top of the crowd strike outage, Delta also faced an oversupply of seats. I'm not going to lie, this is a bit confusing to me because there was a record number of travelers over the summer. But I guess even given that, there were still too many seats, which forced Delta to cut their prices, and that hurt the company's revenues and profits. But on the bright side, Delta seems to be pretty optimistic about Q4. The company mentioned that they're seeing strong holiday bookings, and they expect revenues to rise 2 to 4% in Q4, and they expect their margins to increase as well.

So there's some good news to look forward to, but that wasn't enough for investors to get excited. Delta stock is down around 3% in the pre-market. Let's wrap the show with a fun fact. Only 20% of Gen Z are saving for retirement. This is according to a new study from TIAA Institute. And the number one reason cited is that they don't know where to begin. The study also blames the high cost of living for making it more difficult to actually have money to save for the future.

51% of the average Gen Z monthly budget is spent on housing, according to TIAA. But hey, if you are someone that's interested in, in investing, but don't know where to start, go check out the public app. It's a great place to get started and learn more about investing. I mean, I've personally been using the app for more than four years now, and it gets better every week. We'll put the link in the description if you want to go check that out. I mean, I feel like that was a pretty natural plug. Couldn't pass that up. Well, all right, guys, that's the rundown for today. Hope you guys enjoyed today's episode. We got one more episode this week, and it should be a banger. Keep an eye out for that tomorrow

morning. 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 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. Run-down 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. Respected professionals. Learn more at public.com disclosures. In partnership with Zayidemani. Brokered services for U.S. listed, registered securities are offered by open to the public

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