The Rundown - Warren Buffett's Letter, Intuitive Machines' Sideways Moon Landing

Episode Date: February 26, 2024

Stock market update for 2/26/24. The content of the podcast is for general and informational purposes only. All views presented in this show reflect the opinions of the guest and the host. You should not take a mention of any asset, be it cryptocurrency or a publicly traded security as a recommendation to buy, sell or hold that cryptocurrency or security. Guests and hosts are not affiliated with or endorsed by Public Holdings or its subsidiaries. You should make your own financial and investment decisions or consult respective professionals. Full disclosures are in the channel description. Learn more at Public.com/disclosures. Past performance is not a guarantee of future results. There is a possibility of loss with any investment. Historical or hypothetical performance results, if mentioned, are presented for illustrative purposes only. Do not infer or assume that any securities, sectors or markets described in the videos were or will be profitable. Any statements of future expectations and other forward-looking statements are strictly based on the current views, opinion, or assumptions of the person presenting them, and should not be taken as an indicator of performance nor should be relied upon as an investment advice.The content of the podcast is for general and informational purposes only. All views presented in this show reflect the opinions of the guest and the host. You should not take a mention of any asset, be it cryptocurrency or a publicly traded security as a recommendation to buy, sell or hold that cryptocurrency or security. Guests and hosts are not affiliated with or endorsed by Public Holdings or its subsidiaries. You should make your own financial and investment decisions or consult respective professionals. Full disclosures are in the channel description. Learn more at Public.com/disclosures. Past performance is not a guarantee of future results. There is a possibility of loss with any investment. Historical or hypothetical performance results, if mentioned, are presented for illustrative purposes only. Do not infer or assume that any securities, sectors or markets described in the videos were or will be profitable. Any statements of future expectations and other forward-looking statements are strictly based on the current views, opinion, or assumptions of the person presenting them, and should not be taken as an indicator of performance nor should be relied upon as an investment advice.

Welcome to the rundown, your daily market update in under five minutes. My name is Zadmani, and today is Monday, February 26. In today's episode, we get you ready for another fun week in the world of finance. We got some important earnings coming out and some economic data coming out this week as well. So get ready for another fun one. We're also going to recap Warren Buffett's investor letter. The letter came out over the weekend, and he said some really interesting things in the letter that you should know. And finally, we end the show by highlighting some market movers today and a fun fact about Tyler Perry.

All right, let's get into it. Last week was a wild one, but a record-setting week for the stock market. Thanks to Nvidia's earnings, the markets rallied in the S&P 500 and Dow Jones both finished at all-time highs. And the NASDAQ also finished in the green as well. The stock market has been up for six of the eight weeks this year. And hopefully we can keep that trend going this week. We are on the tail end of earnings season, but we still got some pretty big earnings coming up this week. Tech companies like Salesforce, Zoom, and Dell are reporting earnings.

We also got some retailers like Lowe's and Macy's reporting. Oh, and Kava is also reporting earnings this week. I know that's one that a lot of people want to know about. But beyond the earnings, a lot of investors are going to be looking out for economic data that's coming out this week. On Wednesday of this week, the fourth quarter GDP numbers will be coming out. So we're going to see how much the U.S. economy grew in Q4. On Thursday, we're going to get more data about inflation. The PCE index is coming out on Thursday, and it's the Federal Reserve's preferred inflation metric. And man, if that comes in hot, oh boy, look out. And who knows, you might get a random merger mix in there this week as well.

You know, it's finance. You never know what's going to happen. But one thing is for sure, if you listen to this show every day, you're going to be in the loop of all the important stuff that's happening. As for the stock market today, stocks are off to a bit of a mixed start. The NASDAQ is in the green, but the Dow and S&P are essentially trading flat at the time of this recording around noon eastern. Let's talk about Warren Buffett because over the weekend,

Warren Buffett released his annual shareholder letter. The letter was 15 pages long, and instead of watching Love is Blind over the weekend, I read through it. Well, I was reading it while watching Love is Blind. So anyways, here was my biggest takeaways from the letter. Warren Buffett started off the letter by giving a huge shout out to his longtime partner Charlie Munger who passed away in November. It was a great tribute to his old friend.

As far as any investment takeaways, what really stood out to me was that Warren Buffett expects Berkshire to only slightly outperform the average U.S. company. And the reason for that is Berkshire can't seem to find any attractive investments to make. Berkshire has a lot of cash on hand. They have a record $167 billion. But Grandpa Warren doesn't think there's any good investments to make right now. Warren Buffett essentially says that all in all, we have no possibility of eye-popping performance. Honestly, kind of a bummer to hear that.

Now, as for Berkshire's actual business, remember, they own a ton of businesses from insurance companies like Geico to railway companies. They're also a major shareholder in Coca-Cola, Apple, and some oil and gas companies. And Berkshire made about $8.48 billion in operating earnings from those companies. That's up 28% from a year ago. And Berkshire stock has been off to a good start this year. It's up more than 10% this year so far. But today, it's currently trading down more than 1% at the time of this recording around noon Eastern.

I think it's because investors were really hoping to learn more about what Warren Buffett was going to do with the $160-plus billion in cash that Berkshire has. And it doesn't seem like Warren Buffett has any good plans for that right now. By the way, Berkshire hosts an annual shareholder meeting in Omaha, Nebraska every year. This year, it's on May 4th. You know, it'd be kind of cool to go there. I wonder if we can make that happen. All right, let's switch here's a little bit and talk about airlines. I don't know if you guys have seen the headlines, but airline companies are raising bag fees.

It started off with American Airlines. Last week they announced that they were raising bag fees from $30 per check bag to $35 per check bag. So then United Airlines was like, yo, we want to get in on the action. And so they raised their back fees as well. Other airlines like Alaska Airlines and JetBlue have also raised their fees. Now the airlines are arguing that they're experiencing higher labor and fuel costs. So they're raising the bag fees to offset those costs. And it's not a small amount of money.

I mean, according to one study, the top 20 airlines made a combined $33.3 billion in baggage fees in 2020. That's about 4% of their overall revenue. Now, I've always been a carry-on-only guy myself, so these baggage fees going up gives me another reason to make sure that I only take a carry-on. By the way, shout out to Southwest Airlines for still allowing two check bags for free. Honestly, it's pretty crazy that they haven't changed that policy yet, given that every airline these days are just raising baggage fees. Now, if only Southwest allowed you to pick your seat.

Anyways, let's talk about some stocks making moves today. Starting off with Domino's. Domino's reported better than expected Q4 earnings this morning, and as a result, their stock is up more than 6%. at the time of this recording. Domino's announced a 25% increase in their quarterly dividend. They're going to start paying $1.51 a share. And they also announced a $1 billion stock buyback. So yeah, those two things will definitely get investors excited. Speaking about getting excited, Bitcoin just crossed another threshold. Actually, not just Bitcoin, Ethereum as well. Bitcoin crossed

$53,000 this morning for the first time since December of 2021. And Ethereum crossed $3,000 as well. And as a result of this, crypto-related stocks are up today. Coinbase is up more than $2,000. 10% at the time of this recording, and micro-stratage is up more than 12%. Now, let's talk about a stock not doing so hot today. That would be intuitive machines. The stock is down more than 30% at the time of this recording. Now, remember, we talked about intuitive machines last week. This is the company that was landing a spacecraft on the moon.

And actually, they somewhat successfully did that last week. The company's spacecraft landed on the moon on Thursday, but tipped over during landing. And as a result, some antennas are not pointing towards Earth, which is limiting the communication with the spacecraft. Now, the company said that the science payloads are intact and operational. And in fact, NASA called the landing a success. But that wasn't good enough for investors and the stock is down more than 30% today. But honestly, having a spacecraft back on the moon, pretty cool stuff.

All right, guys, let's wrap up the show with a fun fact. Today's fun fact is about Tyler Perry. Tyler Perry, one of the biggest actors and filmmakers in the business, is pausing a $800 million expansion of his studios in Atlanta after he saw the Open AI SORA demo a couple weeks ago. SORA is this text of video model that Open AI showed off to the world a couple weeks ago, and it's incredible stuff.

And after Tyler Perry saw that, he's rethinking his entire business. Because who needs a fancy studio when AI could just do all of that in a few minutes just by typing in some text prompts? And Tyler Perry said that he's worried about the impact of AI on jobs in the industry, including actors, construction workers, and makeup artists.

Maybe in a few years, there'll be more prompt engineers working for Hollywood studios than there are actors. Personally, though, I still think that we're really far away from that happening. I mean, again, these AI models are really cool, but I don't see it replacing Hollywood movies anytime soon.

But, no, I can see why people would be concerned. All right, guys, that's all I got for you guys today. Thank you guys so much for listening to today's episode. Remember, new episodes every weekday this week. We'll be recapping the markets, recapping earnings, recapping economic data. So make sure you guys are checking back in here every day to stay in the loop. All right, I'll see you guys back here tomorrow.

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