Tesla Rallies After Musk Speeds Up Rollout of Cheaper EVs

Podcast Summary

• US Senate passes $95bn foreign aid bill with TikTok deadline: The US Senate passed a $95bn bill for foreign aid to Ukraine, Taiwan, Israel, and Gaza, imposing sanctions on Russia and Iran, setting a one-year deadline for TikTok's Chinese owner to find a new US owner, and progressing beyond isolationist tendencies in US foreign policy.

  The US Senate has passed a bill providing over $95 billion in foreign aid to Ukraine, Taiwan, Israel, and Gaza, ending months of debate. The legislation includes aid conversions to make it more politically acceptable to Republicans and imposes sanctions on Russia and Iran. Additionally, the bill sets a one-year deadline for TikTok's Chinese owner, ByteDance, to find a new owner for the video app in the US to avoid a shutdown. The bill's passage is seen as a turning point in US foreign policy, with Republican leader Mitch McConnell acknowledging progress beyond isolationist tendencies. In the business world, Armor All offers car owners a chance to get their vehicles summer-ready with discounts and promotions, while Tesla rallies on promises of cheaper EVs and Google's cookie plans face regulatory challenges.

• Tesla's reassurances on new models and autonomy shift investor concerns: Despite a rocky earnings report, Elon Musk's commitment to affordable new models and autonomous cars has eased investor worries, but Google missing its end-of-year target for eliminating third-party cookies adds uncertainty to the tech industry, potentially impacting Tesla's digital advertising efforts.

  Elon Musk's reassurances about Tesla's new models and commitment to autonomous cars have helped ease investor concerns, despite a rocky earnings report. The market had been worried about Tesla's strategic direction and its place in the mass market. Musk's comments about new, more affordable models and his continued emphasis on Tesla's autonomous car initiative have shifted the narrative, at least temporarily. However, this comes as Google has missed its end-of-year target for eliminating third-party cookies on its Chrome web browser, a major setback for advertisers who rely on these cookies for targeted ads and measuring marketing campaign effectiveness. This news has added to the uncertainty in the tech industry, potentially impacting companies like Tesla that rely on digital advertising. Despite these challenges, Musk remains confident in Tesla's ability to achieve autonomy and has even suggested that skeptics should reconsider their investment in the company.

• Google to Phase Out Cookies by 2025, Oracle to Focus on Healthcare Tech: Google plans to eliminate cookies by 2025, while Oracle aims to integrate its cloud services with healthcare industry through new Nashville campus.

  Both Google and Oracle made significant announcements this week with implications for consumer privacy, tech innovation, and the healthcare industry. Google, under regulatory scrutiny for its plans to eliminate cookies, revealed it may phase out cookies by 2025. Meanwhile, Oracle, which recently moved its headquarters to Texas and acquired electronic health record company Cerner, announced its intention to establish a new campus in Nashville, focusing on integrating its cloud services with the medical industry. These developments underscore the ongoing importance of data privacy, tech advancements, and the role of technology in healthcare. Additionally, investor attention remains on big tech earnings, with high expectations for strong returns on AI, but Cathie Wood's Ark Funds are facing an investor exodus despite the market rally.

• Massive outflows from Cathie Wood's investment funds: Cathie Wood's investment funds, known for their focus on risky tech companies, have experienced significant outflows due to poor performance in the current market conditions. Many of the companies in her funds are smaller, unprofitable tech firms that are struggling in the current rate environment, leading to frustration among investors.

  Cathie Wood's investment funds, which gained massive popularity during the pandemic for their focus on risky, speculative tech companies, have seen significant outflows as investors have grown frustrated with their poor performance in the current market conditions. Wood's funds, which had over $1 trillion in assets just two years ago, have seen their worst outflows ever in 2024, with about 30% of their assets being lost. The frustration stems from the fact that Wood's investment philosophy, which should be paying off given the current excitement around generative AI and other tech innovations, is not delivering the expected returns. The issue lies in the fact that many of the companies in her funds are smaller, unprofitable tech companies that are still struggling in the current rate environment. Tesla, which is her largest holding, is the only major tech name in her fund. The lack of performance from these smaller companies and the absence of other big tech names in her portfolio have contributed to the underperformance of her funds.

• Changes in Investment Landscape and Popular Holdings: As interest rates rise and opportunity costs increase, investors shift towards larger, profitable companies, causing underperformance for funds like Ark Investment Management and a decline in popularity for tech-heavy stocks. The gender pay gap persists in professional sports, with women earning significantly less than men.

  The investment landscape has shifted, leading to changes in popular holdings and investor behavior. As interest rates rise and opportunity costs increase, investors are moving towards larger, profitable companies, causing underperformance for funds like Ark Investment Management, led by Cathie Wood. The tech-heavy stocks that rallied during the pandemic are no longer the trend, and the broader market is up while Woods Funds is down significantly. Meanwhile, in the world of sports, the gap between men's and women's pay remains stark, with the WNBA's top draft pick set to make a fraction of the NBA's top pick. These developments showcase broader trends in markets and individual investing, as well as the ongoing disparities in pay between men's and women's professional sports.

• Merger Numbers Matter in Fashion Industry: The Coach-Michael Kors merger is worth $8.5 billion, not $8.5 million as incorrectly stated on the show.

  The merger between Coach and Michael Kors, which was discussed in Tuesday's episode, is worth $8.5 billion, not $8.5 million as incorrectly stated. The hosts encouraged listeners to send in their feedback, including voice memos, and to include their name and location for potential use on the show. The episode was produced by Daniel Bach and Kate Bullifant, with supervision from Sondra Kilhoft, and Luke Vargas signed off for The Wall Street Journal. The show will return with a new episode later that day. So, remember, when it comes to big mergers in the fashion industry, the numbers matter!