← The Rundown
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Public.com presents the rundown, your daily market update in under 10 minutes. My name is Zadad Mani and Today is Friday, September 19th. In today's episode, we'll tell you why small cap companies continue to rally. We'll also discuss Trump's plan to get rid of quarterly earnings reports, then stick around to the end of the show to find out why NBA star Kevin Durant still hasn't sold any of his bitcoin that he bought back in 2016. We got a great show for you today. Let's go. Stocks were back to rallying on Thursday with the S&P 500 gaining half a percent and the Nasdaq jumped nearly 1%. Both indices were back at record highs again. But the real NVP Yesterday was the Russell 2000. The small cap index ripped 2.4%, notching its first record close since 2021. Now this came just one day after the Fed cut interest rates for the first time this year. And as we've said in the past, small cap companies tend to benefit the most from lower interest rates. And that's one reason why the Russell 2000 has been the best performing index since the start of August, jumping more than 11%, while the Nasdaq and S&P have added about 5%. And Wall street is expecting the rally to continue because the Fed hinted at more rate cuts coming this year. By the way, if you want a more detailed breakdown of the Fed meeting, Fed go check out yesterday's episode if you missed it. Now, some quick follow ups from earlier this week. StubHub had its IPO on Wednesday at $23.50 and the debut has been a flop so far. The stock has dropped in its two days of trading so far, currently down more than 15% from its IPO price. Now we previewed the StubHub IPO on Wednesday show and we identified some red flags about the company. It turns out investors are concerned about the future growth of the company and this is also a great reminder that not every stock pops on its ipo, especially bo boring ticketing platforms that don't have a great reputation with the general public. Let's run through some headlines. President Trump has floated the idea of getting rid of quarterly earnings reports and that might actually end up happening. SEC Chair Paul Atkins said on Friday that the agency would propose a rule that would let companies switch to a semi annual reporting instead of every three months like it is today. Atkins said that by doing this, this would reduce red tape and let companies focus more on the long term. So the SEC is going to vot on this rule change. And they don't need Congress's approval to do this. They just need a majority vote. And currently Republicans hold a three to one edge with one open seat at the sec. So this could very much happen. And if this is approved, it would be the biggest shake up in corporate disclosure rules since the SEC first mandated quarterly reportings back in 1970. The SEC first mandated quarterly reports with the intention to bring more transparency and efficiency to the markets. So we've had quarterly reports for over 50 years now. Critics are already pushing back hard on this. They said that less frequent reporting could mean more insider trading opportunities, higher uncertainty for shareholders, and more power shifting to management over investors. I mean, earnings season is going to be an absolute rollercoaster if it only happens twice a year. Now there are supporters for this rule change. They say that reporting every three months is a compliance headache for a lot of companies and it's led to less companies going public. You know the number of publicly traded companies has dropped 40% in recent years. So there is a point there. Maybe we would have more publicly traded companies if they only had to report twice a year instead of four times a year. So I don't know. We'll see what happens. Personally, I like having quarterly reports and I hope it doesn't change. And if the rules do change, it'll probably take over a year before it's fully implemented. So we'll let you know what the SEC ultimately decides. Let me know in the comments on what you guys think about this rule change. Let's shift gears and talk about Elon Musk because he's ready to put politics behind him and lock in on his companies, especially X AI. At a company wide meeting this week, he laid out a new roadmap for the company, telling employees the mission is to build maximally truth seeking products. He also revealed that Grok has hit 64 million monthly users, which is impressive but still tiny compared to OpenAI's 700 million weekly users. Now, part of the roadmap for Xai includes a new AI productivity product called Macro Hard, which is a not so subtle shot at Microsoft. Musk also said that Xai's long term goal is to compete with big tech head on, and he's been living at the office again, pulling marathon work days since his fallout with Trump earlier this summer. Nothing like having a messy breakup with your ex to get you to lock in right now. Things haven't exactly been smooth sailing at X AI. The startup has been bleeding executives. In fact, co founder Igor Babushkin left last month month along with the company's CFO and general counsel. But despite all the turmoil, Elon Musk insists that Xai, which was most recently valued at $120 billion, will eventually benefit his other companies like Tesla, SpaceX and more. But he does continue to face questions about all the time he's spending at Xai instead of Tesla, especially since the board recently proposed a $1 trillion pay package. Now, Elon has shrugged off the criticism so far. In fact, he posted on X breaking down how much time he's spending at Tesla and his other companies. So we'll see what Tesla investors decide to do when it comes to his one trillion dollar pay package. They're planning to vote on that pay package in November. Let's talk about some stocks making moves today. FedEx stock is riding high this morning after topping quarterly revenue and profit estimates. FedEx says that cost cutting and strong U.S. demand carried the results of offsetting the weakness in international export volumes that was dragged down by global tariffs. Domestic package volume rose 5% while international packages fell 3%. One big hit came from the end of the de minimis exception for Chinese imports, which used to let packages under $800 coming to the US tariff free. The de minimis loophole ending was a big deal because shipments from China and Hong Kong represented about 75% of the 1.4 billion packages that entered the US under the de minimis rule. So now all packages coming from China and Hong Kong, big and small, have to pay a tariff and that cost FedEx about $150 million last quarter. And overall, management says that tariffs and trade policy could weigh on results by a billion dollars this year. The good news for FedEx is that US consumers continue to buy a ton of stuff online and FedEx continues to deliver those packages to our doorsteps all over the country. Now, on top of the strong demand for domestic packages, FedEx says that their cost cutting plan has saved them billions of dollars and help company's margins, which is pushing the stock higher this morning. Now, on the flip side, home builder Lennar is struggling. Their shares are down after the company reported its fourth straight quarter of falling profits. You know the housing market has been frozen for a while now because of high mortgage rates and economic uncertainty, which is making it harder for Lennar to sell houses. Their sales were down 6% last quarter. Now Lennar has been offering mortgage buy downs and other incentives to attract buyers, but that strategy is eating into profit margins and sending the stock lower. Now the good news here is that Mortgage rates are starting to come down this week. The 30 year rate fell to its lowest level since October of 2024 and the Fed just cut interest rates for the first time in nine months. So that could send mortgage rates even lower and get more people to buy a house. By the way, Warren Buffett's Berkshire Hathaway bought nearly $1 billion worth of Lennar stock earlier this year, so maybe they're expecting things to turn around too because of lower interest rates. Let's wrap the show with the fun fact. NBA superstar Kevin Durant bought some bitcoin back in 2016 and he hasn't sold any of it because he got locked out of his Coinbase account back in 2016 when KD was playing on those stacked warriors teams. He said that all of his teammates were talking about bitcoin at the time, so he logged into his Coinbase account and bought some for himself. Kevin Durant's agent said they haven't been able to track down KD's Coin Coinbase account information, so they haven't been able to log in over the last few years. But honestly, that has worked out for him because back in 2016, Bitcoin was trading around $700 and now it's worth over $110,000 today. Now, Duran didn't say how much bitcoin he bought. He probably doesn't even remember anymore, but let's just say he bought 100 Bitcoin for a total of $70,000. That would be worth over $11 million today. So yeah, Durant has a lot of money locked in his Coinbase account right now. To be honest, he's probably not sweating it too much though, because Kevin Durant has made over $500 million in just NBA contracts alone. So I doubt he cares too much. But there was some good news. Coinbase CEO Brian Armstrong confirmed on Twitter last night that Kevin Durant has finally regained access to his account. So I wonder if KD is going to sell some of his bitcoin now. By the way, KD is going to be playing for my hometown Houston Rockets this season, which I'm super excited about. So kd, if you're listening to this show right now, or if someone listening to this show knows Kevin Durant, we would love to have you on the pod for a quick 15, 20 minute chat and we can talk bitcoin, we can talk hoops, I could come to your house, I can meet you at Toyota Center. Whatever works for you. Just. Just let me know. Shoot my shot here, you know, no pun intended. Well, all right, guys. That's the rundown for today. That's the rundown for this week. If you guys have been enjoying all the content that we've been putting out, consider giving us a five star rating on Apple Spotify, wherever you listen to your podcasts. And if you are listening on Spotify, don't forget to vote in today's Spotify Spotify poll. Leave us a comment on Spotify. 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 and Connor for all the work behind the scenes and we'll see you guys back here tomorrow for the deep dive.