👀 Uber Eyes Expedia

+ Tesla Faces Investigation Of ‘Full Self-Driving’ After Fatal Collision

October 18, 2024

Good afternoon! Meta recently gave the boot to about 24 employees at its LA office for using $25 meal credits to buy things like toothpaste, laundry detergent, and even wine glasses. One worker, reportedly making $400K a year, admitted to using the credits for household goods when not eating at the office. Meta’s HR team caught on after an internal investigation. While most employees involved were fired, those who only occasionally broke the rules got a slap on the wrist and kept their jobs.

This move is part of Meta’s ongoing restructuring efforts, which have already seen layoffs and staff relocations across WhatsApp, Instagram, and Reality Labs. The company has been tightening the belt on perks—remember when they pushed back free dinner service at their Silicon Valley campus? Now, it seems Meta’s perks are under even closer scrutiny.

MARKETS

*Stock data as of market close*

  • The S&P 500 climbed 0.40%, the Dow edged up 0.09%, and the Nasdaq gained 0.63% on Friday, marking six consecutive weeks of gains for all three indexes. Netflix’s stronger-than-expected earnings played a big part in boosting the Nasdaq's performance.

  • Despite the stock market's strong showing, rising Treasury yields threw a wrench in hopes for quick rate cuts. Solid retail sales data fueled concerns that the Fed might not ease rates as soon as traders anticipated, but stocks still managed to reach new highs as attention shifts to more Big Tech earnings on the horizon.

STOCKS
Winners & Losers

What’s up 📈

  • Netflix jumped 10.09% after reporting third-quarter results that exceeded Wall Street expectations. The company earned $5.40 per share on $9.83 billion in revenue, surpassing the expected $5.12 per share and $9.77 billion. Analysts praised the results and raised price targets, anticipating further growth. ($NFLX)

  • Lamb Weston rose 10.17% after activist investor Jana Partners urged the company to explore a potential sale, which excited shareholders. ($LW)

  • Intuitive Surgical climbed 10.01% to a new all-time high, driven by strong earnings fueled by sales of its da Vinci surgical device. ($ISRG)

  • Apple is up 1.23% on reports from Bloomberg indicating shockingly strong iPhone 16 demand in China. ($AAPL)

  • Spotify climbed 3.31%. ($SPOT)

  • Reddit jumped 6.04%. ($RDDT)

What’s down 📉

  • CVS Health fell 5.23% after news broke that CEO Karen Lynch will be replaced by David Joyner following three years at the helm. Joyner has been leading the company’s pharmacy service business for the past two years. ($CVS)

  • WD-40 dropped 4.79% after missing both revenue and earnings estimates in the last quarter, disappointing investors. ($WDFC)

  • American Express dropped 3.15% after reporting third-quarter revenue of $16.64 billion, slightly below the $16.67 billion consensus forecast. However, earnings per share exceeded expectations, coming in at $3.49 versus the anticipated $3.28. ($AXP)

  • Vertex Pharmaceuticals fell 3.15%. ($VRTX)

TRANSPORTATION
Uber Explores Acquiring Expedia

Uber is revving up for a possible detour into the travel industry.

Reports suggest the ride-hailing giant has kicked the tires on acquiring Expedia, though no formal offer is on the table. The deal would be a major play for Uber as it aims to become a “super app,” offering everything from rides to takeout to now, potentially, your next vacation.

It’s no secret that CEO Dara Khosrowshahi has his roots in Expedia, having run the company before moving to Uber—so a reunion could be on the horizon.

High Risk, High Reward? But as intriguing as it sounds, this deal isn’t without its potholes. Uber’s stock took a 3% hit after the news broke, while Expedia’s shares saw a 5% lift. Investors seem torn.

While acquiring Expedia would let Uber gobble up a major slice of the travel pie, it’s a massive undertaking that could distract the company from its core business—especially with autonomous vehicles looming on the horizon.

The Expedia Factor: For Expedia, teaming up with Uber could offer a much-needed boost. The travel giant has faced stiff competition from rivals like Booking and Airbnb, and an Uber-sized partnership might help it recover market share.

With the travel industry still in a post-pandemic shuffle, aligning with a booming tech company could give Expedia the edge it needs.

Super App Ambitions — Still, for Uber, this could be the big leap toward becoming a one-stop shop for all things life-related. Imagine booking a flight, a hotel, and an Uber ride to the airport all in one app. The idea has its appeal, but analysts are cautious, suggesting partnerships might be a safer bet.

After all, integrating Expedia’s vast network of services could be like trying to merge two freeway systems—complicated and filled with potential roadblocks.

NEWS
Market Movements

  • 🏥 CVS names new CEO: CVS Health has appointed David Joyner as CEO, replacing Karen Lynch amid financial struggles. Its stock price has dropped 19% YTD, and Q3 earnings are expected to miss expectations. ($CVS)

  • 📱 Chinese iPhone sales: Apple's iPhone 16 sales in China rose 20% in the first 3 weeks post-launch, with combined sales of the 16 Pro and Pro Max vaulting 44% vs. their 2023 equivalents. However, total iPhone sales dropped 2% YoY due to weaker performance of older models. ($AAPL)

  • 🚗 Stellantis to shutter and sell Arizona testing facility: Stellantis will close and sell its 4,000-acre vehicle proving grounds in Arizona by year-end as part of CEO Carlos Tavares’ cost-cutting efforts. The company will use Toyota’s proving grounds starting next year. ($STLA)

    ☕ Starbucks names new global chief brand officer: Starbucks has appointed Tressie Lieberman, a former Chipotle executive, as its new global chief brand officer to help revitalize its brand under CEO Brian Niccol. ($SBUX)

  • 💻 Intel explores Altera options: Intel is seeking to sell a minority stake — at minimum — in its Altera unit, valued at around $17B, to raise cash amid ongoing struggles and market share losses. The sale could accelerate plans previously set for an Altera IPO in 2026. ($INTC)

  • 🌐 Starlink's India win: Elon Musk's Starlink won a key regulatory battle in India, where satellite broadband spectrum will be allocated administratively, not through auction as sought by rival Mukesh Ambani's Reliance Jio. This raises the prospect of a price war. ($TSLA via Starlink)

  • 💉 Weight loss drugs' added benefits: A recent study has found that weight-loss drugs like Novo Nordisk's Ozempic and Eli Lilly's Mounjaro reduce drug and alcohol abuse rates by up to 50%. ($NVO, $LLY)

  • 🎢 Universal's new theme park: Universal's Epic Universe theme park will open on May 22, featuring 70 acres of attractions and aiming to draw 10M visitors in its first year. It is the first new large-scale Orlando park in 26 years. ($CMCSA)

  • 💊 FTC urged to block pharma deal: Unions and consumer groups asked the FTC to block Novo Holdings' $16.5B Catalent buyout, citing competition concerns for GLP-1 drug production and limited manufacturing options for rivals like Pfizer and Amgen. Novo Holdings is Novo Nordisk's controlling shareholder. ($CTLT, $NVO, $PFE, $AMGN)

AUTO
Tesla Faces Investigation Of ‘Full Self-Driving’ After Fatal Collision

Tesla’s Full Self-Driving (FSD) system just found itself under the federal microscope.

After a fatal pedestrian crash involving a Tesla Model Y, the National Highway Traffic Safety Administration (NHTSA) has opened an investigation into whether Tesla’s FSD can handle tricky visibility situations like fog and sun glare. With four similar crashes on record, things aren't exactly cruising for Tesla’s autonomous ambitions.

Fog, Glare, and Red Flags: This isn’t Tesla’s first run-in with regulators. The NHTSA is already digging into Tesla’s Autopilot system, which has its own laundry list of incidents.

Now, FSD—designed to eventually make driving hands-free—faces questions about whether it's safe for real-world use, especially when the weather doesn’t play nice. Oh, and by the way, 2.4 million Tesla vehicles are now under the investigation spotlight.

Investors Tap the Brakes: Tesla's stock took a slight dip after the news broke, and it’s not hard to see why. Just last week, Elon Musk hyped up plans for driverless robotaxis, but the lack of juicy details left investors unimpressed.

Now, with this probe looming over FSD, Tesla's road to fully autonomous vehicles could hit more than a few potholes.

A Bumpy Ride Ahead? Musk has been promising true driverless tech for years, but reality keeps hitting back. With regulators now sniffing around, Tesla’s timeline for unsupervised FSD looks a lot fuzzier.

The big question: can Tesla steer through this storm, or will it find itself stalled at the side of the road?

Calendar
On The Horizon

Next Week

Next week’s economic calendar is looking pretty light, with just a few reports on the docket. Kicking things off on Monday are the US leading economic indicators, followed by existing home sales on Wednesday. Thursday brings new home sales and the usual weekly jobless claims, with Friday rounding things out with durable goods orders.

On the earnings side, though, things are starting to heat up as the season rolls on.

Earnings:

  • Monday: SAP ($SAP), Logitech ($LOGI), Nucor ($NUE)

  • Tuesday: Verizon ($VZ), Texas Instruments ($TXN), Lockheed Martin ($LMT), Seagate Technology Holdings ($STX), 3M ($MMM), GM ($GM), Paccar ($PCAR), Kimberly-Clark ($KMB), PulteGroup ($PHM), Herc Holdings ($HRI), Denny’s ($DENN)

  • Wednesday: Coca-Cola ($KO), Tesla ($TSLA), AT&T ($T), T-Mobile ($TMUS), Thermo Fisher Scientific ($TMO), Boeing ($BA), Hilton ($HLT), Deutsche Bank ($DB), IBM ($IBM), Mattel ($MAT)

  • Thursday: Union Pacific ($UNP), Honeywell ($HON), UPS ($UPS), Valero Energy ($VLO), Dow ($DOW), Southwest Airlines ($LUV), Harley-Davidson ($HOG), Capital One ($COF), Western Digital ($WDC), Skechers ($SKX), Boyd Gaming ($BYD), Texas Roadhouse ($TXRH)

  • Friday: Colgate-Palmolive ($CL), Sanofi ($SNY), Booz Allen Hamilton ($BAH), AutoNation ($AN), Centene ($CNC)

NEWS
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RESOURCES
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