✈️ Spirit Airlines...Bankruptcy?

Good afternoon! Taco Bell may be the king of speed, but there's a catch. For the fourth consecutive year, the chain took the top spot in QSR Magazine's Drive-Thru Report as the fastest drive-thru in the industry. In 2024, customers spent just under 4 minutes and 15 seconds from start to finish, making Taco Bell the undisputed speed champion.

But speed comes at a price—accuracy. While Taco Bell can get you your food in record time, there's a 15% chance your order will be wrong, according to the same report. Still, with Taco Bell celebrating National Taco Day and integrating AI into its operations, the chain seems poised to keep refining its process.

MARKETS

• Stocks slipped on Thursday as Wall Street waited for Friday's jobs report and weighed the latest economic data. The S&P 500 dipped 0.17%, the Dow dropped 0.44%, and the Nasdaq hovered just below the flatline. Investors also kept a close eye on oil, which soared for a third straight day amid rising tensions in the Middle East. Fears of an Israeli retaliation against Iran’s oil facilities fueled the rally, sending energy stocks like Valero and Diamondback higher.

• On the economic front, the U.S. labor market sent mixed signals. ADP’s private-sector hiring numbers looked strong, but weekly jobless claims came in slightly above expectations. Meanwhile, oil prices remained in focus, with traders bracing for potential supply disruptions from the conflict. All eyes are now on Friday's jobs report.

STOCKS
Winners & Losers

What’s up 📈

• EVgo ($EVGO) surged 60.81% after receiving a $1.05 billion conditional loan from the Department of Energy. JPMorgan also upgraded the stock to overweight.

• Vistra ($VST) rose 5.65% following Google CEO Sundar Pichai’s remarks about potentially using nuclear power plants for its data centers, positioning Vistra as a key player in supporting AI technologies.

• Palantir ($PLTR) increased 4.67%, continuing gains after its recent partnership with Edgescale AI to deliver Live Edge, an AI platform for industries like manufacturing and utilities.

• Constellation Energy ($CEG) climbed 4.52% for the same reasons as Vistra—Google’s potential use of nuclear power for data centers.

• Nvidia ($NVDA) ticked up 3.37% after CEO Jensen Huang said the company is seeing “insane” demand for its new Blackwell AI chips, which are set to ship in the fourth quarter.

• Southwest Airlines ($LUV) rose 3.18% after board member Rakesh Gangwal made a significant investment, purchasing 3.6 million shares, boosting confidence in the airline's prospects.

• Phillips 66 ($PSX) increased 3.32%.

What’s down 📉

• Hims & Hers Health ($HIMS) dropped 9.60% after the FDA resolved the shortage of weight loss drugs Zepbound and Mounjaro from Eli Lilly, for which Hims had developed compound versions.

• Joby Aviation ($JOBY) fell 8.63%, giving back some of its prior gains after soaring 28% on Toyota’s $500 million investment announcement.

• Stellantis ($STLA) decreased 8.63% after a downgrade from Barclays, citing inventory issues and declining market share in the U.S. and EU.

• Levi Strauss & Co. ($LEVI) slid 7.69% after lowering its full-year revenue outlook and missing revenue expectations for the third quarter. Levi is also considering selling its underperforming Dockers brand.

• Nio ($NIO) declined 7.07% as a rally in Chinese stocks faltered, with U.S.-listed Chinese shares paring recent gains.

• Tesla ($TSLA) dipped 3.36% after announcing a recall of over 27,000 Cybertrucks due to rearview camera issues.

AIRLINES
Spirit Airlines Explores Bankruptcy

Spirit Airlines is running out of fuel—financially speaking. After a failed merger with JetBlue, the budget carrier is exploring bankruptcy options, discussing a potential restructuring under Chapter 11 with bondholders. It’s not looking good for the airline that's been trying to find some altitude amid mounting losses.

Spirit is scrambling to figure out what to do with its $3.3 billion debt, including $1.1 billion of secured bonds coming due soon. CEO Ted Christie has been in talks with bondholders, but let’s be honest—the options are running out. After the JetBlue merger fell apart in January, leaving Spirit in financial limbo, the airline lost the chance to join forces and create the fifth-largest carrier in the US. Now, instead of coasting on JetBlue’s coattails, Spirit is left battling steep losses and shrinking operations.

With bankruptcy potentially looming, Spirit’s balance sheet is far from stable. Its operational footprint has been shrinking—Spirit plans to slash capacity by nearly 20% in Q4, and it just furloughed 186 pilots. Not to mention, Spirit’s credit card processor has set an October 21 deadline to refinance or extend its notes.

A Rocky Ride
Spirit hasn't posted an annual profit since before COVID, and even as travel has rebounded, the low-cost carrier hasn't found its footing. Major airlines are getting better at matching Spirit's budget fares, and the recall of Pratt & Whitney engines grounded part of its fleet, making things even tougher.

Routes have been cut, costs are being slashed, but the competition keeps ramping up. The debt clock is ticking, and without a merger to fall back on, Spirit is flying solo through some pretty stormy skies.

With fewer routes, mounting debt, and an increasingly competitive market, Spirit Airlines needs more than just luck to keep soaring.

NEWS
Market Movements

• 🏦 Bank of America Outage Causes Frustration: Bank of America ($BAC) experienced an outage on Wednesday, leaving some customers unable to access accounts or seeing $0 balances. The issue has largely been resolved, and the bank issued an apology.

• 🚗 Stellantis Faces Sales Slump: Stellantis, the maker of Chrysler, Dodge, and Jeep, is dealing with a significant sales decline. U.S. sales from July to September fell 19.8% year-over-year and 11.5% compared to the previous quarter. Chrysler and Dodge sales dropped more than 40%, while other brands, excluding Fiat, also saw negative growth. Despite selling enough cars to reduce its inventory by 11.6%, Stellantis dealerships are still overstocked. The company’s focus on larger, pricier vehicles has backfired as American consumers turn toward more affordable, smaller cars.

• 💊 Eli Lilly's Mounjaro and Zepbound No Longer in Short Supply: The FDA has announced that Eli Lilly's weight loss and diabetes drugs, Mounjaro and Zepbound, are now readily available after previously facing shortages.

• 👖 Levi Strauss Eyes Sale of Dockers: Levi Strauss reported mixed Q3 results, including a 15% sales drop for its Dockers segment. The company is considering selling the brand to refocus its portfolio.

• 🚚 Amazon Faces Labor Board Complaint: The U.S. labor board has filed a complaint against Amazon ($AMZN), alleging it illegally refused to bargain with the Teamsters union after ending its contract with a driver contractor, deeming Amazon a “joint employer.”

• 🛒 Amazon to Hire 250,000 for Holiday Season: Speaking of Amazon, they plan to hire 250,000 workers for the 2024 holiday season, matching last year’s numbers. E-commerce holiday spending is projected to grow 4.9% to $240.8 billion, outpacing broader sales growth.

• 💉 Gilead to Allow Generic Versions of HIV Drug: Gilead Sciences ($GILD) has agreed to let six generic companies produce its HIV prevention drug, lencapavir, for 120 low-income countries. However, middle-income countries remain excluded.

• ☕ Starbucks Expands Coffee Farming Research: Starbucks ($SBUX) is investing in two new coffee farms in Costa Rica and Guatemala to study hybrid varieties and address climate-related challenges affecting its supply chain.

• 🏎️ LVMH Signs Formula 1 Sponsorship Deal: LVMH has inked a 10-year sponsorship deal with Formula 1, featuring its Louis Vuitton, Moët Hennessy, and TAG Heuer brands. The deal replaces Rolex as a major sponsor.

AI
OpenAI Raises $6.6 Billion at $157 Billion Valuation

Call OpenAI the Silicon Valley darling—this AI powerhouse just scored $6.6 billion in fresh funding, catapulting its valuation to a staggering $157 billion. Thrive Capital, led by Josh Kushner, took the lead with a $1.3 billion investment, while Microsoft—OpenAI’s most dedicated cheerleader—added another $750 million to its $13 billion pile. Other heavy hitters like Khosla Ventures, Fidelity, Nvidia, and SoftBank couldn't resist jumping on the AI hype train.

With this cash infusion, OpenAI is officially rubbing shoulders with the elite—joining the ranks of the top three venture-backed startups, alongside SpaceX and TikTok’s parent, ByteDance. But it’s not just about the dollars; it’s about strategy. OpenAI is playing it smart by keeping rivals at bay—asking investors to steer clear of backing competitors like Anthropic and Musk's xAI. Staying on top isn’t just about innovation—it’s about making sure others don’t catch up.

Fueling the AI Dream
This new funding will power more AI research and expand computing capacity, keeping OpenAI at the forefront of the field. Their star attraction, ChatGPT, now flaunts 250 million weekly active users. But there’s a price to pay—OpenAI expects to burn through $5 billion this year against $3.7 billion in revenue. Developing next-level AI tech isn’t exactly a budget-friendly hobby.

OpenAI’s internal shakeups have added to the drama. CEO Sam Altman got the boot and then came back like a Silicon Valley comeback story. Plus, key figures like co-founder Ilya Sutskever and CTO Mira Murati have exited, stirring uncertainty. There’s also talk of ditching the nonprofit label for a for-profit model—a move that makes investors giddy but could come with its own set of legal headaches.

Zoom Out
AI is more than just cool tech—it’s a battleground, and OpenAI is right in the thick of it. Heavyweights like Google and Meta are breathing down its neck, while new challengers are cropping up everywhere. With a potential IPO on the horizon, Sam Altman and his team are betting big on their vision—and their capital.

Buckle up, because the AI race just went into overdrive.

Calendar
On The Horizon

Tomorrow

Brace yourselves—tomorrow’s jobs report is shaping up to be a big one. Ever since July’s job data tanked the market, investors have been glued to these reports. That month’s lower-than-expected employment numbers had everyone panicking that the Fed might have missed the mark on managing a recession, sending stocks into a nosedive.

August helped ease those fears a bit, with 142,000 jobs added (a nice recovery from July’s 114,000) and unemployment holding steady at 4.2%. But the labor market remains in the spotlight, especially with the Fed tying future rate decisions to employment data. September’s numbers? Economists are eyeing 140,000 new jobs, a slight dip but nothing too alarming—unless it’s much lower. In that case, October’s already shaky market could take a serious hit.

NEWS
The Daily Rundown

• 💥 WWII-Era Bomb Explodes at Japanese Airport: A WWII-era U.S. bomb exploded at an airport in Japan, causing flight delays but no injuries. Authorities are investigating the incident as flights resume normal operations.

• 🌍 Threat of a Wider War in the Middle East: Israeli ground troops clashed with Hezbollah in southern Lebanon, resulting in the deaths of eight Israeli soldiers. Israeli bombings killed six people in Beirut. Prime Minister Netanyahu vowed retaliation against Iran after a ballistic missile attack. President Biden emphasized proportional responses and opposed Israeli strikes on Iran’s nuclear facilities.

• 🚗 Tesla's Sales Increase But Fall Short: Tesla's vehicle sales rose 6.3% last quarter after two consecutive declines. However, the company fell short of Wall Street expectations, delivering 462,890 vehicles. Investors are eagerly awaiting Elon Musk's upcoming robotaxi reveal on October 10.

• 🏎️ Michael Jordan’s Racing Team Sues NASCAR: Michael Jordan’s 23XI Racing team has filed an antitrust lawsuit against NASCAR, accusing it of monopolistic practices. The lawsuit stems from disputes over NASCAR’s charter system, which guarantees teams spots in races and revenue from TV deals. Jordan’s team, along with Front Row Motorsports, refused to sign the charter renewal, arguing it provides an unfair revenue share.

• ⚖️ Doctor Pleads Guilty in Matthew Perry Death Case: A doctor facing charges related to the death of Friends star Matthew Perry has pleaded guilty to conspiracy to distribute ketamine. The case has drawn significant media attention.

• 🏈 Ex-Jacksonville Jaguars Employee Sues FanDuel: A former Jacksonville Jaguars employee, currently serving prison time for embezzling $22 million from the team, has filed a lawsuit against FanDuel, alleging the company exploited his gambling addiction.

• ⚖️ Special Counsel Lays Out Trump Case: Special Counsel Jack Smith presented a 165-page filing laying out evidence against Donald Trump. The filing argues Trump acted as a private candidate, not in his official capacity as president, during the January 6, 2021, events. This is part of Smith's effort to maintain the case against Trump following the Supreme Court's ruling on presidential immunity.

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