The Rundown - Dow on Track for 8-Day Win Streak, Chinese EV Maker Zeekr to IPO

Starting point is 00:00:00 Public.com presents the rundown, your daily market update in five minutes. My name is Zadmani, and today is Friday, May 10th. In today's episode, we do some car talk. I'll catch you up on Tesla's plans for their supercharging network and a Chinese EV company that's about to make their debut on the New York Stock Exchange. And then stick around to the end of the show to find out why GM will stop producing their Chevy Malibu and why other automakers might follow. All right, let's go.

Starting point is 00:00:28 Well, guys, stocks finally have. had a nice breakout day on Thursday. All three major indices were up. Things are starting to head back in the right direction this month. The S&P is back above 50,200, and the Dow is on a seven-day winning streak up every single day this month. I mean, I know I keep saying that nobody cares about the Dow, but you might have to start paying attention because the Dow is hot right now. One of the main drivers in the markets jumping yesterday was bad economic data. This time it was a rise in initial jobless claims. Yeah, we're still in silly season right now. We're bad in need. is good news for the stock market? The initial jobless claims rose to 231,000 last week.

Starting point is 00:01:06 This is a number of workers that were applying for unemployment benefits for the first time following a job loss. So last week, 231,000 people applied for unemployment benefits, which was the highest level since last summer. And the reason the stock market jumped on this news is bad economic data gives investors more hope that the Fed will cut rates sooner rather than later. The same thing happened last week. Remember, the Fed has been reluctant to cut interest rates because for one, inflation is still above their 2% target, but also because the economy has been pretty strong. Well, with more data showing the economy is starting to weaken, the Fed might be more likely to cut rates to not send the economy into a recession or something.

Starting point is 00:01:43 So we'll see if this poor data changes the Fed's mind at all. We're going to have to wait a little bit, though, because the next Fed meeting isn't until June 13th. In the meantime, the stock market continues to push higher. I mean, don't look now, but we're getting pretty close to all-time highs again. Let's run through some headlines. Starting with 10. Tesla. Tesla plans to spend over $500 million on its supercharging network this year. This is according to a post from Elon Musk this morning. This is a bit of a head scratcher because just last week, Tesla reportedly laid off their entire supercharging division, which called into question the long-term vision of the charging network

Starting point is 00:02:17 that Tesla began building like a decade ago. Now, I was pretty surprised by this because Tesla recently gave other automakers like GM, Rivian, and Ford access to these superchargers. As someone who owns a Tesla, the supercharging network. is one of the main reasons why I got a Tesla. So I was a bit surprised they decided to cut back on building out that network. But I guess Elon says they're going to spend over $500 million this year, so kind of confused by the whole thing.

Starting point is 00:02:40 Now, what is pretty apparent, though, is that Tesla is really ramping up their job cuts as they deal with a slowdown in growth. Less than a month ago, Tesla announced that it was going to lay off 10% of their global workforce. Well, yesterday, Bloomberg reported that Tesla's job cuts are now escalating in China, with additional layoffs starting earlier this week. We've talked about Tesla's struggles in China a lot on this show. Tesla's market share in China continues to dwindle. In April, Tesla's market share dropped to 4%, which is down 2.6

Starting point is 00:03:05 percentage points from a year ago. This is according to the Chinese Passenger Car Association. Now, speaking of China, there's a Chinese EV company that you probably haven't heard of. It's called Ziger, and they're actually making their debut on the New York Stock Exchange today. Zeker makes high-end EVs in China, and their IPO today is going to be the biggest by a China-based firm since DEDY's IPO back in 2021. Zeker is looking to raise $441 million at a $5.5 billion valuation. And it looks like the initial demand from investors for Zikers seems to be strong based on its upsized offering, even though previous high-profile EVIPOs have given investors a reason to be cautious, to put it lightly. Like Rivian is down

Starting point is 00:03:45 more than 80% since its IPO and shares of Lucid Motors are trading under $3 after reaching a peak of $38 a share back in 2021. But then again, 2021 was kind of like a fever dream. So, maybe we shouldn't compare everything to that year. All right, let's talk about some stocks making moves today. Let's start with Taiwan Semiconductor. Shares are up after the chipmaker announced that its April revenue grew by nearly 60% year over year. The boost was due to higher demand for making AI chips.

Starting point is 00:04:16 But the company was also supported by the smartphone market, which returned to growth after global shipments rose by nearly 8% in Q1. Last year, the smartphone market fell by 5%. And 43% of TSM's revenues come from making smartphone chips. So seeing positive growth here is encouraging. The stock is up around 3% on this news in pre-market trading. Stock not doing so good this morning is Yelp. Yelp shares are down after reporting their first quarter earnings.

Starting point is 00:04:40 Now, the first quarter earnings were actually in line with the Wall Street estimates. Revenues were up 7% to $313 million, and EBITA was $64.5 million. But can you guess why their stock was down? Lower guidance. That's usually what it is. Yelp posted lower second quarter guidance, meaning they expect their business to grow slower than what they had initially expected. Now, one reason for the lower guidance is the company is stepping up spending on search engine marketing to bring awareness to their home service category.

Starting point is 00:05:04 Like, apparently you can find landscapers, electricians, plumbers, and things like that on Yelp. I'm glad that they're stepping up that spending because I had no idea that you could do that on Yelp. I thought it was still a place to get unhinged reviews on restaurants. So it looks like they were trying to expand beyond that. Yelp shares are down 4% in pre-market trading. Let's wrap the show with a fun fact. Today's fun fact is about sedans.

Starting point is 00:05:26 they're going extinct, at least in the U.S. Sales of traditional cars, so cars that aren't SUVs, truck, or vans, make up less than 20% of U.S. auto sales. That's according to Cox Automotive. And what's crazy here is that in 2012, sedans accounted for more than 50% of auto sales. So that's a huge drop in just 12 years. This stat kind of checks out, personally speaking, because all I see now driving around these days are big cars.

Starting point is 00:05:53 Then again, I do live in Texas, so maybe it's not the best representation. Things have gotten so bad for sedans that companies are now just discontinuing their sedan model. Like GM just announced that they're ending the production of the Chevy Malibu. That's a car that was first debuted back in 1964. And moving forward, Chevy will have no more sedans in their production. Just SUVs and trucks. So yeah, like I said, sedans are a dying breed and they might go extinct pretty soon. On a side note, I think that minivans are making a comeback.

Starting point is 00:06:21 And as a father of two, I could not be more excited. I think my next car is going to be a minivan. All right, guys, that's the rundown for today. Hope you guys had a great week. I know that earnings season is slowing down, but next week is going to be a good one. We're going to be hearing from retailers like Walmart, Target, and Home Depot. I like to pay attention to those earnings because it's a good vibe check on how consumers are doing. We're going to be covering it all here on the rundown.

Starting point is 00:06:41 Also, check out public.com's other podcasts. It's called Leading Indicator, and they interview some of the leading experts in business, finance, and tech. On the most recent episode, they had PubMatic CEO Rajiv Gold. He talked about what a TikTok ban could mean for the digital ad market. Definitely go check that out. We'll put a link in the description. Have a great weekend, everybody. Let's hope the good vise from this week carry over into next week. Thank you guys so much for listening. Shout out to Connor and Mike for all the work behind the scenes. We'll see you guys back here on Monday.

Starting point is 00:07:08 This is the rundown, your real-time resource for news events and trends in the markets. All views presented in this show reflect the opinions of the guests. You should not take any mention of a publicly traded security as recommendation to buy, sell, or hold that security. Run-down guests are not financial advisors and are not affiliated with public holdings or its subsidiaries. You should make your own financial and investment decisions or consult, respective professionals. Learn more at public.com disclosures. In partnership with Zaididmani, brokerage services for U.S. listed, registered securities are offered by Open to the Public Investing Incorporated, member FINRA and SIPC.

The Rundown - Dow on Track for 8-Day Win Streak, Chinese EV Maker Zeekr to IPO

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