← The Rundown
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Public.com presents the rundown, your daily market update in 10 minutes. My name is Zaydad Mani and Today is Tuesday, May 26th. In today's episode, we'll preview this upcoming week and give you the latest on the Iran war. We'll also tell you why Eli Lilly just bought three vaccine companies and why one investment bank thinks that Micron stock could double. Then stick around to the end of the show to find out why everyone is dunking on Ferrari right now. And honestly, honestly, it's totally justified. We got a great show for you today. Let's go. The stock market continued to roll last week with the S&P 500 jumping 0.9% while the NASDAQ climbed about a half a percent. And the Dow Jones actually closed at record highs on Friday. But nobody cares about the Dow. So now what people do care about is the S P500, which is now on an eight week winning streak, the longest stretch since 2023. The big talking point on Wal right now is that the stock market seems to be totally ignoring the warning signs from the bond market over the last couple weeks. As I talked about all last week, treasury yields have been surging. The 10 year treasury yield is sitting around 4.5% and the 30 year yield is above 5%. Now, yields are moving a bit lower this morning, but they're still elevated compared to a couple weeks ago. And that's usually a sign that bond traders are concerned about inflation or higher interest rates or the broader economy. And typically when bond yields go up, stocks tend to go down. That's because borrowing money gets more, more expensive. And some investors pull money out of stocks and put them into bonds to lock in the guaranteed high yields. But right now, stock market investors are flat out ignoring the bond market. You know, it's kind of like a toxic relationships. The red flags are everywhere. But investors are too in love with the AI driven rally right now to walk away. And it also probably helps that corporate earnings have been strong. 95 of S P 500 companies have reported Q1 earnings at this point and profits are up 28 year over year. So I think as long as earnings keep delivering like that, the market is willing to look past higher yields. The big question though is whether that pattern will hold for the back half of the year or whether investors will finally fall out of love with the AI rally. And the other thing overhanging all of this is the Iran war and oil prices. President Trump said over the weekend that a peace deal with Iran was close to being finalized, which would reopen the Strait of Hormuz. So that initially sounded like good news. But then on Monday, the US Military conducted strikes in southern Iran. And then this morning, Iran's Revolutionary Guard fire vowed to retaliate. So we're still getting mixed signals here out of the Middle east, and as a result, oil prices are whipsawing. The price of Brent crude fell 7% on Monday on the hopes of a peace deal, but now it's bouncing back this morning up over 3% to around $99 a barrel. So we'll see how it all plays out this week. And looking ahead a bit, despite it being a short week, there's still a lot going on. On Thursday, we are getting the PCE inflation report, which is the Fed's preferred inflation gauge. So we'll get more inflation data. Plus we're getting earnings from Salesforce, Marvell and HP on Wednesday and and Costco and Dell on Thursday, just to name a few. So should be another interesting week ahead. As always, make sure you guys are locked into the podcast and tuning in every day to stay in the loop. Let's run through some headlines, starting with Eli Lilly. Eli Lilly is going on a shopping spree. The pharma company announced today that they're acquiring not one, not two, but three vaccine companies in deals worth up to $4 billion combined. So here's the breakdown with Lilly is paying $1.5 billion for a company called Kurevo, which is developing a shingles vaccine. Lilly is also spending another $1.5 billion to buy a company called the Vaccine Company. Yes, that's literally the name of the company. This company is working on a vaccine for the Epstein Barr virus, which is a virus that causes mono and has been linked to multiple sclerosis. And finally, Lilly is spending $780 million to buy a company called Lima Tech Biologics, which is developing a vaccine for staph infections. You know, Eli Lilly has become a household name over the last couple years and their stock has surged because of GLP1s like Manjaro and Zepbound. And those drugs are printing money for the company. Those two drugs alone brought in over $8 billion in the US in Q1. So now Eli Lilly is using all that GLP1 cash to diversify their business, starting with vaccines. You know, Eli Lilly hasn't been a big player in vaccines in a long time, despite developing one of the original polo vaccines back in the day. So they're trying to get back in the vaccine game via Acquis. You know, I think it's A smart move to try to diversify and we'll see if that pays off in the long term. For now though, the short term focus is still GLP1s. In fact, Lilly has a lot cooking right now. They recently launched their first weight loss pill called Fundeo. And then just last week they released results on their next generation GLP1 called RetetatRide. I'm pretty sure I butchered that pronunciation. Now the data for this next gen drug is pretty insane. In phase 3 trials, patients lost an average of 28% of their body weight at the highest dosage, which is better than Zepp bounds 20%. Analysts are already projecting this new drug could be a 4 billion dollar drug by 2030. So yeah, Eli Lilly continues to innovate on GLP1s and they're looking to vaccines to diversify their business in the future. Let's shift gears and talk about Uber because they're trying to make a massive international acquisition. Uber is in talks to buy a European food delivery giant called Delivery Hero in a deal that would be worth around 11.6 billion billion. Delivery Hero is based in Berlin. They operate in over 60 countries across Europe, the Middle east and Asia. And you know, Uber has been quietly building up a position in this company for a while. As of last week, they owned a 19.5% direct stake plus another 5.6% through options, making them Delivery Hero's largest shareholder. And now they're trying to buy the whole company outright. See for Uber, they're trying to grow their food delivery footprint around the globe. Right now they're getting smoked by their competitor DoorDash, which recently bought the UK delivery company Deliveroo for for $3.6 billion last year. So if Uber ends up buying Delivery Hero, they would leapfrog Door Dash in Europe, the Middle east and Asia. We'll see if this deal ends up going through. There was a report that Uber is considering increasing their bid after a major shareholder for Delivery Hero is already rejecting this offer by Uber. You know, the market seems to be nervous that Uber might be overpaying. Uber stock is down around 2% this morning at the time of this recording. Let's talk about some stocks making moves today. Micron stock is surging morning after UPS said the stock could double from its current price. The investment bank raised their price target on micron from $535 to over $1600. Micron makes high bandwidth memory, which has seen a huge surge in demand thanks to the AI build out. And UBS's argument is that the memory chip Business is fundamentally changing. AI demand has gotten so strong that the hyperscalers are now locking in three to five year supply contracts with Micron at fixed volumes and partially fixed prices. UBS now estimates that about 30% of the memory market is now tied up in these long term deals. See, typically the memory industry is known for having a boom and bust cycle. And that's why memory stocks have historically traded at a huge discount to other chip makers. I mean, even today, Micron currently trades at 8 times forward earnings, while Nvidia is trading around 32 times forward earnings. So UBS thinks that the PE gap between Micron and Nvidia should close as Micron's earnings become smoother and and more predictable over time. As a result, Micron stock is up around 10% this morning at the time of this recording. And if you zoom out, this stock has gone up nearly 200% this year and over 800% over the last 12 months. Now, on the flip side, shares of BP are sliding this morning after the company's board removed its chairman, Albert Manifold over serious concerns related to his governance oversight and conduct. Now, the BP board did not explain what those concerns actually are, which obviously, obviously has investors speculating. What makes this matter even more dramatic is that Manifold had only been chairman since October. And by the way, this is BP second leadership shakeup in just the last couple months. The company installed a new CEO, Meg O' Neill on April 1st. So BP is going through a shakeup at the top. They're also pivoting their business. They're reprioritizing their core oil and gas business and pivoting away from renewables. Investors don't like all the drama happening right now. BP shares are down around 5% this morning on this news. But if you zoom out, the stock is still up over 50% in the past year thanks to higher oil prices from the Iran war. Let's wrap the show with a fun fact. Ferrari just revealed its first ever fully electric car called the Luce. And man, the Internet is dunking on Ferrari so hard right now. And so are investors. Let's first talk about the stats of this car. It's a five seater car, which is also a first for Ferrari. It gets about 300 miles in range and it goes zero to 60 in about two and a half seconds. Oh, and it costs $640,000. And I'm not gonna lie to you guys, this does not look like a $640,000 car. It kind of looks like a Toyota Prius with like an after kit on it. Or something. And the performance isn't that impressive either. I mean, zero to 60 in two and a half seconds is actually slower than a Tesla Model S Plaid. That car is like a tenth of the price. Now another interesting tidbit about this Ferrari Luci. It was designed by Jony. I've, the legendary Apple designer behind the iPhone and a bunch of other products. And that might be the problem here because some analysts are saying this Ferrari looks like a giant Apple device on wheels. And the funniest part about all of this is that since EVs are silent and Ferrari is kind of known for the roar of their combustion engine, this car has a feature that basically plays fake engine sounds out of its speakers to make it sound like a real Ferrari. So, yeah, this is not going over well with hardcore Ferrari fans and investors. Ferrari stock is down around 6% this morning. And you know, I also find the timing of this release to be really weird because Ferrari is doing an EV now, while other sports brands like Porsche, Lamborghini and McLaren have all pumped the brakes on their EV plans because the demand just isn't there right now. So let me know what you guys think of the comments, especially for all my car enthusiasts out there. And if you're listening and you have the budget to buy a $640,000 car, would you buy this Ferrari? Luche? Well, all right, guys, that's the rundown for today. Hope you guys enjoyed today's episode. If you did and you have like five extra seconds, consider giving us a five star rating on Apple, Spotify, YouTube, wherever you listen to your podcast. All that engagement really does help us out and it helps other people find the show. Thank you guys so much for listening, watching and commenting. Shout out to Mike for all the work behind the scenes and we'll see you guys back here tomorrow.