The Rundown - Warren Buffett Adds to SiriusXM Stake, SBUX Cuts Back on Discounts

Episode Date: October 14, 2024

Stock market update for October 14, 2024.

Public.com presents the rundown, your daily market update in five minutes. My name is Zadmani, and today is Monday, October 14th. In today's episode, we get you ready for an action-pack week. Earning season is finally here. There's a lot to look forward to. Also, Starbucks's new CEO is already making moves to turn around the company. We'll tell you about his plan. We'll also tell you about changes happening at Boeing as they deal with a strike and a lot of other issues.

Then stick around to the end of the show to find out who the king of Spotify is. This man just keeps breaking records. All right, let's go. Well, guys, the stock market has been on a hot streak right now. Five straight positive weeks in a row for the S&P 500 and NASDAQ. Last week, both indices added more than 1% with the S&P closing in at record highs again. The Dow will also close at record highs, but nobody cares about the Dow. So, it's been a great few weeks for stocks, and I should mention crypto as well.

Because it's also having a great few days. Bitcoin rallied over the weekend, hitting over $65,000, and ether is back above $2,500. So we got good vibes and positive momentum across the board right now. And now we enter a huge week. Earning season, baby. Earning season is finally here. This week we're getting earnings from a ton of major companies. Morgan Stanley, Bank of America, Goldman Sachs, United Airlines, Netflix, American Express. I mean, that's just to name a few. There's a lot of companies reporting this week. Bank stocks are getting a lot of buzz right now. I think it's because J.P. Morgan and Wells Fargo stock hit their highest level since before the collapse of Silicon Valley Bank

after both these banks reported solid earnings on Friday. We talked more about these banks on Friday's episodes, so go check that out if you missed it. And we're also getting some economic data this week. The September retail sales report is coming out on Thursday. So there's a lot to look forward to, and I think investors are becoming more and more optimistic of a soft landing. And if we see some solid earnings this earnings season,

Oh, it's going to be a fun three or four weeks. Ha, I'm so pumped. Let's run through some headlines. Let's start with Starbucks, because their new CEO is already cooking up some changes to turn around the company. The big change coming up, no more discounts. Starbucks wants to be a premium brand again, and offering discounts all the time waters down that premium feel, you know? Typically, premium brands don't offer discounts. When's the last time you saw a sale at a Louis Vuitton store?

So say goodbye to your buy one, get one freeze, and 50% off. drinks. Another benefit of getting rid of these big discounts is the crazy rush it creates at stores during the days there are big discounts. Antignotally speaking, I have been to a Starbucks to take advantage of some of these discounts on their app, and it's crazy at the store of those days. And this was causing an issue for store managers. So with less of a rush and less mobile orders coming through, that should give Starbucks staff more time to focus on customers at the store. We'll see if the strategy works. I mean, in the short term, it might not pay off. But this is part of their new CEO Brian Nichols' plan to turn around the company. Remember, Brian,

Nickle took over last month coming over from Chipotle. He has huge expectations to fill. Starbucks stock is up more than 25% since he was announced his new CEO. Brian Nichol says he really wants to emphasize making Starbucks into a more inviting space instead of just being a mobile order pickup place, you know? It'll take a few months to see what kind of impact these changes are going to have on the business. And I wonder what other changes they end up doing. These changes might end up hurting the business too, you know? There's no guarantee that it's going to help. Let us know what you guys think. We'll make this the poll on Spotify today. Tad today's episode on Spotify. and vote in today's poll.

Let's shift gears and talk about another company that's been struggling, Boeing. Boeing announced that their plan to cut around 17,000 jobs because of the over 30,000 machinists that went on strike back in September, halting production at Boeing factories. On top of the layoffs, the company also delayed the release of their 777 X jet to 26. The previous target was 2025. And they also planned to stop selling their 767 cargo plane. The update to Boeing's product plan will lead to the company burning 6,000,

billion dollars in expenses. Man, Boeing is in a tough spot right now. The strike is costing them more than a billion dollars per month. And according to the Wall Street Journal, the company has around $10 billion in cash as of September. So I don't know how much longer they can weather the storm. Boeing failed to make a deal with the union last week. So there's currently no end in sight. Boeing, so the union was unrecepted to the new deal and are making demands that are out of reach for the aerospace company. So I guess Boeing is doing whatever they can to save cash. We'll see. how long this lasts, but this year just continues to get worse for Boeing. Let's talk about some stocks making moves today. Shares of Sirius XM are up this morning after it was revealed that

Warren Buffett bought 3.6 million shares for $87 million last week. As a result, Sirius XM stock is up 5% in the pre-market because if Warren Buffett is buying it, then there must be a good reason, right? For the younger listeners out there, Sirius XM is a satellite radio company. And back in the day, it was a big deal. didn't think anyone still listen to it. I mean, I know that Warren Buffett is the goat and everything, but I don't get this move, to be honest. Serious XM stock is down more than 50% this year, so maybe he's just buying the dip, but he's owned this stock since like 2016. So I don't know. Now, on the flip side, shares of Caterpillar are down after the construction equipment company was downgraded this morning by Morgan Stanley. Caterpillar has had a good year so far.

The stock is up 36% this year, thanks to an increase in infrastructure spending in the U.S., but Morgan Stanley thinks the stock has peaked. As a result, the shares are down around 2% this morning. Let's wrap the show with the fun fact. The weekend just broke his own Spotify record last month with 120.5 million monthly listeners. He became the first artist across the 100 million mark back in February of last year,

and he just did it again. And the 100 million club is pretty exclusive, okay? The only other artists who have reached that are Taylor Swift and Billy Elish. So it's a pretty big deal, and the weekend seems to be the king right now. And just to put this number into perspective, Spotify has 626 million monthly active listeners. So that means that 19% of Spotify users listened to the weekend last month. And if I'm being honest, I was one of them.

Well, all right, guys, that's the rundown for today. We have a really action-pack week coming up, like I mentioned in the intro. We are going to be locked in, not just this week, but for the next three or four weeks as we go through earnings season. So if you guys haven't already, make sure you guys are subscribed to the podcast and hit that notification bell if you want to be notified as soon as an episode goes up every morning. My caffeine consumption might get pretty unhealthy over the next few weeks, but that's okay. Earning season only happens four times a year, you know? Thank you guys again for listening. Shout out to Mike and Connor for all the help behind the scenes, and we'll see you guys back here tomorrow.

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