WSJ What’s News - What’s News in Markets: Super Micro Boost, Delta's Dip, Robotaxi Disappoints

Episode Date: October 12, 2024

What turned Monday into a super day for Super Micro? And what did the CrowdStrike meltdown cost Delta Airlines? Plus, why did Tesla’s robotaxi fail to wow investors? Host Francesca Fontana discusses the biggest stock moves of the week and the news that drove them. Sign up for the WSJ's free Markets A.M. newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

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I'm Francesca Fontana for The Wall Street Journal, and this is What's News in Markets, our look at the biggest stock moves of the week and the news that drove them. Let's get to it. You know, stocks have been pretty upbeat lately, with strong economic data offsetting the rising tensions in the Middle East and all of the uncertainty around the elections here in the U.S. Monday was a bit of a different story. Investors found enough to worry about – all of the above, plus the strengthening of Hurricane Milton – to pull the stock market back a bit. But we saw some of that upbeat attitude make its return, with the

S&P 500 and the Dow closing at records on Wednesday, as traders turned their focus towards earnings season. The big banks – JP Morgan Chase, Wells Fargo, kick things off on Friday with some better than expected results and some reassuring signs about the broader economy, with JP Morgan's CFO suggesting that the Fed has achieved a so-called soft landing with lower inflation and healthy growth. To be sure, the Fed's big rate cut will take some time

to work its way through the financial system, but the bank's earnings do bode well for the American consumer. All three major indexes notched weekly gains, with the Dow and S&P 500 both hitting new records at the end of Friday's session. First up, Supermicrocomputer stock got a super boost on Monday. The server maker announced positive shipment data, saying that it recently deployed more than 100,000 liquid-cooled graphics chips to large AI factories. So long story short, good news for demand.

And the stock could use some good news after a couple of hits it's taken recently. There was last month, when the Wall Street Journal reported that the Justice Department is looking into the company following a critical report by an activist short-selling firm, then there was August, when an annual filing delay also prompted a sell-off. I know you're asking, just how super was this boost that Supermicro got? I won't leave you in suspense. Shares jumped 16% on Monday, making the stock the S&P 500's top performer before making smaller, mixed moves the rest of the week.

I know this summer feels like a million years ago. Or is it just me? I don't think it is. Maybe it is. But do you remember the CrowdStrike meltdown? Global IT outages that crashed Microsoft and caused a bunch of businesses to totally melt down like Delta Airlines?

Well, this week we got Delta's latest earnings and a look at just how costly that outage was for the airline. The company's quarterly adjusted profit fell 26% from the same period a year before, in part because of a monster hit to sales from all the canceled flights, to the tune of $380 million. Expenses related to reimbursements and grounded crews totaled $120 million even after accounting

for the fuel savings of flying less. Which is funny, I guess there's always a silver lining somewhere? You know, can't fly your planes because of this total disaster scenario? You're saving good money on jet fuel. I'm kidding. Obviously, this was a huge hit for Delta, which, according to its CEO, is still pursuing compensation from CrowdStrike and Microsoft. Delta shares lost more than 1% on Thursday, but made up the ground with a roughly 2% gain

on Friday. As you dedicated listeners have heard about earlier this week, Tesla had a big flashy debut of its driverless, robo-taxi vehicles on Thursday, but investors didn't seem too impressed. I'll catch the rest of you up. Thursday night, CEO Elon Musk unveiled the new CyberCap, which is a two-seater with no steering wheel or pedals, and the larger Robovan, which is designed to shuttle up to 20 people at a time.

Very sci-fi looking, very Blade Runner. But investors weren't so keyed into that as much as all the questions that Musk left unanswered, like the specifics on the business model for this RoboTaxi venture, for instance. So the flashy presentation didn't end up sparking a flashy rally for Tesla, and the stock dropped nearly 9% on Friday. And now you know what's news in markets this week. You can read about more stocks that moved on the week's news in the score, my column in the Wall Street Journal's Exchange section.

Today's show was produced by Anthony Banzi with supervising producer Michael Kosmides. I'm Francesca Fontana. Have a great weekend and see you next Saturday.