✂️ Fed Makes a Big Cut...

+ JPMorgan Wants a Bite of the Apple Card

Good afternoon! Looks like Tupperware’s finally putting a lid on it. The iconic 78-year-old brand, maker of plastic food storage containers and famous for its legendary "Tupperware parties," is prepping for bankruptcy after years of struggling to stay fresh. Despite attempts to spice things up—like launching in Target and closing its last US factory—Tupperware just couldn’t keep up with the changing market and eco-conscious consumers.

With years of stale sales and mounting debt, Tupperware's party is officially winding down. Chapter 11 bankruptcy might give them a chance to rebuild with what’s left in the fridge, but it's going to be a tough uphill battle.

MARKETS

*Stock data as of market close*

  • The Fed cut rates by 0.5% on Wednesday, marking its first reduction in four years, and the markets had a rollercoaster ride. Stocks initially spiked on the news but lost steam after Fed Chair Jerome Powell poured some cold water on hopes for more aggressive cuts. While the rate drop is a relief, Powell’s cautious tone on future reductions left traders feeling like they’d just been teased with a candy bar and then had it swiped away.

  • By the end of the day, the S&P 500 wiped out a 1% gain, while the Nasdaq and Dow both dipped around 0.3%. Meanwhile, the Fed’s outlook signaled two more rate cuts could be in store for 2024, hinting that the easy-money party isn’t over just yet. But for now, investors are left on pause—except for small caps, which flexed their muscles as the Russell 2000 soared.

STOCKS
Winners & Losers

What’s up 📈

  • Lunar Holdings ($LUNR) surged 38.33% after the space exploration company secured a roughly $5 billion space network contract from NASA.

  • Zillow Group ($ZG, $Z) climbed 3.66% as Wedbush analysts upgraded the stock to Outperform from Neutral, citing favorable trends in the housing market, particularly the recent drop in mortgage rates.

  • The following stocks didn’t have any news particularly but can be attributed to the Fed slashing its policy rate by 50bps (0.5%) to 4.75%-5.00%:

    • Duolingo ($DUOL): increased 3.20%

    • Instacart ($CART): surged 5.28%

    • Carvana ($CVNA): ticked up 3.23%

    • Roku ($ROKU): climbed 3.60%

    • West Pharmaceutical Services ($WST): advanced 4.50%

What’s down 📉

  • Nio ($NIO) fell 7.21%.

  • Summit Therapeutics ($SMMT) dropped 6.33%.

  • ResMed ($RMD) shed 5.12% after being downgraded to underperform from peer perform by Wolfe Research, citing decelerating revenue growth due to competition from Eli Lilly’s GLP-1 medication.

  • Sysco ($SYY) declined 4.17%.

  • Intel ($INTC) slid 3.26%.

  • Zoom ($ZM) dipped 3.04%.

ECONOMY
Fed Makes a Big Cut…

In a move that's been years in the making, the Federal Reserve cut its benchmark rate by a half-point on Wednesday, bringing it down to a range of 4.75% to 5%. It’s the first rate cut since the Fed started its battle against inflation back in 2022. The goal? To give the labor market a little boost without spiraling inflation out of control. While 10 out of 19 Fed officials are betting on another cut before the year is over, Fed Chair Jerome Powell made sure to tamp down any dreams of a rate-cut bonanza.

“This isn’t some new normal,” Powell warned, reminding everyone that the Fed's decisions will be made on a meeting-by-meeting basis. In other words, don’t get too comfortable with the idea of more cuts.

Bowman: The Lone Wolf

But it wasn’t all kumbaya in the Fed’s meeting. Governor Michelle Bowman, the committee’s resident contrarian, voted against the half-point cut, pushing for a more modest quarter-point reduction instead. It's the first time a Fed governor has dissented since 2005, making Bowman’s stance a big deal.

Her reasoning? She’s worried that the bigger cut might be overkill and could risk reigniting inflation down the road. Still, Powell got the majority of the committee on his side, proving that sometimes you’ve got to go big or go home when it comes to steering the economy.

Markets, Meet Rollercoaster

The markets reacted like a kid who's had too much sugar—first bouncing up, then coming down hard. The S&P 500 hit an all-time high after the announcement, only to end the day in the red. Treasury yields also took a dip, and investors are already placing bets on another 75 basis points worth of cuts by year-end. It’s like a game of rate cut roulette.

But don’t pop the champagne just yet. The Fed’s projections show that the unemployment rate is likely to creep up to 4.4% by the end of 2024, while inflation is expected to cool down to 2.3%. So while the economy might get a slight reprieve, the Fed isn’t quite ready to let things fly loose.

NEWS
Market Movements

FINANCE
JPMorgan Wants a Bite of the Apple Card

JPMorgan Chase is cozying up to Apple, looking to snatch the Apple Card from Goldman Sachs' hands—but it’s not a done deal yet. While the talks are heating up, JPMorgan is coming in with demands. First on the list? They want to pay less than the full $17 billion in outstanding balances because Goldman’s been dealing with elevated losses. Seems like those shiny new Apple Card users have been a bit more “spend now, worry later” than expected.

But that’s not all. JPMorgan is also eyeing a change to Apple’s unique billing cycle. Right now, all Apple Card users get their statements at the start of the month, which may sound neat, but it’s been causing a customer service nightmare. JPMorgan wants to ditch that system to avoid the flood of phone calls that Goldman has been drowning in.

Goldman’s Breakup, JPMorgan’s Opportunity

This potential takeover would mark a big shift for Apple, which needs a new financial partner after Goldman decided to exit the consumer finance scene faster than you can say “we’re out.” With 12 million Apple Card users on the line, Apple’s been talking to several suitors—including Capital One and Synchrony Financial—but JPMorgan’s the front-runner thanks to its scale and influence. After all, why settle for second best when you can have the biggest credit card issuer in the country?

Still, JPMorgan’s not walking into this without checking the fine print. The bank is cautious, especially with Goldman’s regulatory headaches and the high delinquency rates that have plagued the Apple Card portfolio. But landing this deal would give JPMorgan access to Apple’s loyal customer base and a chance to pitch more financial products to millions of iPhone-wielding fans.

Negotiations Continue—Will It All Come Together?

Of course, no deal is ever simple, and there are still plenty of details to work out. JPMorgan wants to tweak the terms of the Apple Card, and both companies need to agree on the price tag. With concerns over a potential economic slowdown looming, JPMorgan is keen to make sure it doesn’t bite off more than it can chew.

As the talks continue, the big question is whether Apple and JPMorgan can find common ground. For now, they’re both playing their cards close to the chest (pun intended), but one thing’s for sure—if this deal goes through, it’ll be a game-changer in the world of co-branded credit cards.

Calendar
On The Horizon

Tomorrow

Tomorrow brings a slew of economic data, from jobless claims to existing home sales and US leading indicators. But let’s be real: after today’s Fed fireworks, these numbers are more like background noise.

Before Market Open:

  • Darden Restaurants ($DRI)—aka the breadstick empire behind Olive Garden and LongHorn Steakhouse—has had a bit of a snooze-fest in 2024. The stock’s been treading water as diners flock to cheaper fast-casual spots. But last quarter’s earnings showed Darden’s secret sauce: raising prices without scaring off customers. Turns out, endless breadsticks can work wonders for your bottom line. Consensus: $1.84 EPS, $2.8 billion in revenue.

After Market Close:

  • FedEx ($FDX) is proving it’s still the heavyweight champ in the shipping ring. When Raj Subramaniam took over as CEO in 2022, folks wondered if the new leadership would keep FedEx’s wheels turning smoothly. Spoiler alert: they have. Subramaniam’s laser focus on cutting costs has sent profits flying, and shareholders are loving it. Expect more high-fives from investors. Consensus: $4.83 EPS, $21.99 billion in revenue.

NEWS
The Daily Rundown

  • 💣 Hezbollah Operatives Injured by Exploding Pagers: More than 2,700 Hezbollah members were injured and nine were killed after pagers exploded simultaneously across Lebanon. Hezbollah blamed Israel, who has been ramping up its campaign against the group. The Wall Street Journal reported that the pagers came from a new shipment received recently. Israel declined to comment.

  • 🎰 FanDuel’s Parent Expands with $2.6B Italian Deal: Flutter, the parent company of FanDuel, acquired Italy's Snaitech for $2.6 billion as part of its global expansion strategy. The move strengthens its international presence, contrasting with rival DraftKings, which is focused primarily on the U.S. market.

  • 📱 Instagram Tightens Privacy for Teens: Instagram is rolling out new protections for teens under 18, automatically making their accounts private. Parents can now approve privacy changes and see who their children are messaging, though they can't view the content of those messages. Instagram also introduced “Sleep Mode” to limit notifications from 10pm to 7am.

  • 📉 Larry Ellison Slips to Third in Richest Rankings: Oracle chairman Larry Ellison briefly became the second-richest person in the world, overtaking Jeff Bezos, thanks to Oracle's surging stock. However, Ellison has since slipped to third with a net worth of $203 billion. He still owns 40% of Oracle and could reclaim the second spot as the AI boom continues to benefit cloud computing.

  • 🚨 Diddy Indicted on Sex Trafficking Charges: Sean "Diddy" Combs was indicted on charges of racketeering, sex trafficking, and other criminal activities. Diddy allegedly coerced women into acts of sexual violence, which were recorded and used as collateral. He has pleaded not guilty.

RESOURCES
The Federal Reserve Resource

Join our small yet growing subreddit 🚀: https://www.reddit.com/r/investinq/

Wall Street Reads 💎 (Best Books):

Check out our latest issues 🎯: https://investinq.beehiiv.com