The Rundown - Warren Buffett Buys Ulta Beauty, Walmart Raises Sales Outlook

Episode Date: August 15, 2024

Stock market update for August 15, 2024. Subscribe to the ⁠⁠⁠⁠Halftime Report⁠⁠⁠⁠, our weekly newsletter breaking down the most important stories investors need to know.

Public.com presents the rundown, your daily market update in five minutes. My name is Zaid Mani, and today is Thursday, August 15th. In today's episode, we recap earnings from Walmart and tell you why they're ready to take on Amazon. Also, Apple is working on a robot that looks like an iPad with arms. We also tell you about stocks that Warren Buffett and Bill Ackman bought the dip in. Then stick around to the end of the show to find out why Starbucks's new CEO became a legend during his time at Taco Bell. We got a lot to talk about, so let's go. Not going to lie, yesterday was a bit underwhelming in the stock market.

The S&P was up slightly and the NASDAQ was essentially flat, but I think some investors, myself included, were expecting a stronger move up after the July CPI report showed that inflation dropped below 3% for the first time since March of 2021. I mean, you would think news like that would cause investors to be pretty hype, right? Because historically, whenever we get good inflation news, the markets would shoot up. But that didn't really happen yesterday. I mean, it could be because everything is just priced in or investors are still just being cautious right now

with talks of recession still in the conversation. But it's kind of hard to complain too much because technically the S&P 500 has gone up for five days in a row. So building some momentum here. By the way, we did cover the CPI report in more detail in yesterday's episode. So if you want more information on that, go check that out. And we just got some economic data

that should make investors happy. The July retail sales report just came out and retail sales in July were up 1% compared to June. That is much better than the 0.3% that was expected. So despite a cooling labor market, consumer spending continues to be strong with increased spending on cars and electronics. And that should give investors some relief that maybe the economy might be okay. Remember, consumer spending makes up about 70% of the U.S. economy. So this week we got data showing that inflation continues to cool, retail spending continues to be strong, and interest rates are likely

headed lower. Maybe the soft layling is back on track. Just crazy how sentiment changes week by week. Let's run through some headlines. Starting with Walmart. Walmart just reported earnings this morning, and investors seemed to be pretty happy. The company beat on earnings for this quarter and raised its full year sales outlook.

Comparable sales at Walmart grew by 4.2% in last quarter. That's better than the 3.4% that was estimated. Walmart says that consumers continue to be priced conscious and seek out deals. Grocery sales, which makes up about 60% of Walmart U.S. sales, continued to boom. Walmart saw more traffic across all income groups. In fact, Walmart actually pointed to wealthier shoppers being a meaningful driver for the increase in grocery sales. Another bright spot for Walmart was their U.S. e-commerce business, which grew by 22% in the quarter and is now

approaching profitability. Amazon's starting to get some competition here. Walmart has continued to build products to compete with Amazon, including third-party buyers and sellers, advertising tools, and more. So investors have a lot to be excited about. And Walmart, shares jump 7% on the upbeat performance of these earnings. Let's shift gears and talk about Apple because Bloomberg reported this crazy story that Apple might be building a robot. Bloomberg's Mark German, who's very plugged into all things Apple, wrote this article about a product that Apple's building. And the way he describes this robot is like an iPad with arms that'll sit on your desk. Apparently this bot will run Apple intelligence. That's Apple's upcoming AI

features because Apple is trying to compete against other home assistants like Google Home and Amazon Alexa. But these home assistant devices haven't really been a great business. Like Amazon lost north of $25 billion from 2017 to 2021 on its Amazon Alexa business. And that's why last year Amazon announced that it's cutting its Alexa division to shift priorities. So Apple's now trying to swoop in and maybe take some of that market share. According to Mark German, Apple plans to release this robot in either 2026 or 2027. But here's the kicker. Because it's Apple, the price is going to be around $1,000. Compare that to like the Amazon. Amazon Echo that you can buy for like a couple hundred bucks. So yeah, if you're looking for a

thousand dollar iPad with arms that could potentially choke you out, I guess this might be for you. Honestly, I'm kind of curious to see what this is going to be like. I think the bigger problem here is that Apple is trying to find another home run product. They haven't really had one since like the Apple Watch or the AirPods. I think they were hoping the Apple Vision Pro was going to be that product, but I don't think anyone's talked about the Apple Vision Pro since like March. So that didn't really work out for them. According to Mark Germant Apple is also working on a foldable iPad and AirPods with cameras. So that'll be interesting. Also, I'm not really sure how I feel about big tech companies like Tesla and now Apple building robots. That's why you've got to be nice

to these AI assistance, man, because soon enough, they're going to have a lot of power. Let's talk about some stocks making moves today. Ulta Beauty stock is up more than 10% after it was revealed that Warren Buffett bought a $266 million stake in the company. And whenever a company gets a Warren Buffett stamp of approval, the stock tends to move. Honestly, this couldn't come at a better time for Ulta. Ultra CEO warned earlier this year that the company was facing cooling demands for beauty products, and then in the end of May, they lowered their full year sales forecasts. In fact, as of yesterday, Ulta's shares have lost a third of their value this year. I guess Warren Buffett bought the dip. Also, Nike stock is rallying on the news that outspoken hedge fund manager Bill

Ackman has taken a $230 million stake in the company. Bought 3 million shares during the second quarter. But it's not the first time that Ackman has invested in Nike. He actually made a hundred million dollar profit back in 2018 on a quick six-month trade. I mean, Nike hasn't had a lot of great news. The stock is down more than 20 percent and they've really struggled with sales and they provided a dim outlook for the quarter ahead. So Bill Ackman out here buying the dip. Nike stock is up more than 3% in reaction to this news. Now on the flip side, shares of Alibaba are slipping after they missed revenue and net income expectations. The Chinese e-commerce giant continues to fuel the competitive pressure from rivals like jd.com and timu for the longest time alibaba was labeled by many as

the amazon of china at one point their stock was over three hundred dollars a share back in 2020 but it's been all downhill since the stock price is now below 80 dollars a share let's wrap the show with a fun fact starbucks's new ceo brian nickle was in charge of launching the doritos loco's taco brian nickel is getting a lot of love right now for his 10-year as CEO of Chipotle, where the stock price for Chipotle shot up like 700 plus percent since he took over back in 2018. But before Chipotle, Brian Nicol worked at Taco Bell. Eventually, he became the CEO of Taco Bell from 2015 to 2018. And his accomplishments during his time at Taco Bell might be the most impressive thing on his resume. He was in charge of launching the Doritos Locos Taco, which was a huge hit for the company. And he also launched the Taco

Bell breakfast menu, which is extremely underrated. So I can see why he's considered like a a goat tier restaurant CEO. I mean, this man might belong in the Hall of Fame. Now, just to be clear for all my Taco Bell historians out there, Brian Nickel didn't invent the Doritos Locos Taco. That would be Todd Mills. So I want to make sure that Todd Mills gets his flowers. But Brian Nichol was in charge of bringing it to market

and, you know, marketing the product, which, again, huge hit. So Brian Nickel, man, he has huge expectations going into Starbucks. Well, all right, guys, that's the rundown for today. Got one more episode tomorrow before heading into the weekend. Hope you guys have been enjoying the show this week. If you have, don't forget to hit us with a five-star rating on Apple and Spotify, getting awfully close to the 3,000 five-star ratings on Spotify. So thank you guys so much for all the support.

Shout out to public.com. Go check out their app. They've got a lot of new futures that they're cooking up. And shout out to Connor and Mike for all the help behind the scenes. 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.

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