The Rundown - Tesla Promises Cheaper EV Model, Boeing Burns Less Cash Than Expected

Starting point is 00:00:00 Public.com presents the rundown, your daily market update in five minutes. My name is Zademani, and today is Wednesday, April 24th. In today's episode, we dive into earnings from Tesla and Boeing. The numbers were down, but the stocks were up. Also, stick around to the end of the show to find out the new rule from the FTC that might get you a raise. All right, let's go. Guys, stocks had a monster day on Tuesday, closing hire for the second day in a row. Both the S&B and NASDAG jump more than 1% on Tuesday.

Starting point is 00:00:32 It looks like strong corporate earnings this week is breathing some life back into the market, which is great to see because the last couple weeks have been pretty brutal. Some of the early winners of earnings season have been Spotify, GM, and even Tesla who saw their stock jump after reporting earnings yesterday. More on Tesla in a bit. We still got some more big earnings coming this week. Meta is reporting earnings today after the market close, and Microsoft and Google are reporting on Thursday after the market close.

Starting point is 00:00:56 So let's see if the markets can keep the positive momentum. going the rest of the week. Let's run through some headlines. And we have to start with Tesla earnings. Tesla reported their Q1 earnings after the market closed yesterday, and it was some good news and some bad news. Let's get the bad news out of the way first. The numbers were pretty bad. It didn't look so good. Tesla's revenues fell by 9%, which is the biggest drop for the company since 2012. And their profits took a hit as well. Their gross profits dropped by 18%. And their net income dropped by 55%, which is not great. In their shareholder letter, Tesla reiterated that they expect 2024 growth to be lower than it was in 2023. So that's the bad news. Okay, so now for the good news. The stock still

Starting point is 00:01:39 jumped over 10% after Tesla reported their earnings. Not going to lie, when I saw the stock jump so much, I was kind of confused because I'm like, the numbers don't look so good. So why are investors so hype right now? Well, one reason could be that Tesla now expects to accelerate the launch of their cheaper, more affordable EV that some people are calling the Model 2. The previous plan is to start production on this car in the second half of 2025. Well, now Elon is saying that this new car should be ready by early 2025 or sooner. And that was enough to get investors pretty excited. Investors have been waiting for a cheaper EV to be released by Tesla, hoping that it's going to increase the adoption of EVs in the United States and worldwide. In fact, Elon called out some

Starting point is 00:02:17 rival automakers for prioritizing hybrids over EVs, which he suggests is stunting the growth of EV adoption. So if Tesla can deliver on this low-cost EV, maybe that's going to jumpstart the demand for EV adoption again. So there's a lot riding on this low-cost EV, and the pressure is on for Tesla to deliver. And don't forget, Tesla's also working on the Robotaxi. Tesla even teased the Robotaxy in their shareholder letter with a screenshot of how the ride-hailing service is going to look like inside the Tesla app. We're supposed to learn more about the Robotaxy service on August 8th. So after a brutal year leading up to this earnings report where Tesla stock was down over 40%, dragged down by lower demand for EVs, a series of price

Starting point is 00:02:55 cuts and some production challenges. Tesla investors have something to be optimistic about, and Tesla shares are up over 10% as a result. All right, let's talk about the only company that might be having a tougher start to 2024 than Tesla. That would be Boeing. Well, they just reported their earnings, and it wasn't that bad. Boeing reported narrower loss and less cash burn than Wall Street was expecting. Now, we already know all the issues that Boeing is facing right now. They're under a lot of pressure right now as they try to resolve their safety issues with the 737 max airplanes. And kind of restabilize the production of this plane and their credibility at the same time. It's all started back in January where the door plug blew off the 737 Max-Alascan airline plane mid-air. And ever since then,

Starting point is 00:03:36 Boeing has been under a microscope by airlines, by regulators, by passengers, that it was forced to dramatically slow down the production of their planes. And that did put a strain on their financials. Boeing burned through nearly $4 billion, and they reported a record loss of $355 million in their most recent quarter. They also saw a 36% drop in commercial airplane deliveries. Now, all that sounds pretty bad, but all those numbers were better than what Wall Street was expecting. And honestly, sometimes that's all that matters. Now, in response to all this chaos, Boeing has announced an executive shakeup about a month ago. They're going to replace the CEO and a bunch of other leadership positions. So maybe that'll be enough to get Boeing back on track. All right, let's talk

Starting point is 00:04:16 about some stocks making moves today. Let's start with Airbnb. Airbnb's shares are up more than 2% this morning after being upgraded by Mizuho to buy with a price target of $200 a share. Airbnb currently trades north of $160 a share. Mizuho expects Airbnb to generate higher long-term EBDA growth from their potential launch of sponsored listings. See, sponsored listings would allow Airbnb hosts to pay to advertise their listings on Airbnb site. I mean, the trend of every company turning into an ads company is holding true, right?

Starting point is 00:04:48 Stock not doing so good this morning is N-phase energy. The shares of this company are down more. than 8% this morning after they missed on both earnings and revenue estimates for the quarter. The N-phase sells solar microinverters, which helps turn solar energy into usable electricity. And those aren't selling as well anymore. N-phase reported a drive-new drop of 34%. N-phase set it market seasonality as one of the reasons for the drop in revenue. N-phase also sells EV chargers and other batteries, and there's been a drop in demand for those as well. So pretty tough quarter for N-phase. Let's wrap the show with a fun fact. Today's fun fact is about non-compete

Starting point is 00:05:22 clauses. Over 30 million U.S. workers have a non-compete clause that prevents them from working for a rival company for a certain period of time. Well, the FTC just banned them. In a rule yesterday, the FTC banned non-compete clauses saying that companies can't stop employees from working for rival companies anymore. And this is a pretty big deal if this holds up, because non-compete clauses have been pretty common for highly paid executives for a while, but they were also starting to become more common for lower paying jobs, too. The FCC says that this ban should result in more competition and increase wages. But this non-compete ban might face some legal challenges, though. The U.S. Chamber of Commerce said that they would sue to block this rule saying that the

Starting point is 00:06:00 FTC doesn't have the power to do this. So I guess we'll see what happens in court. All right. Well, that's the rundown for today. If you guys enjoyed that show, please consider giving us a five-star rating on Apple and Spotify. Got another big episode coming for you guys tomorrow. We're going to be talking meta-earnings, which should be very interesting. If you guys want to be notified as soon as the episode comes out, hit that notification bell on Spotify. Thank you guys again for listening. And thank you to Mike and Connor for all the work behind the scenes. We'll see you guys back here tomorrow.

Starting point is 00:06:26 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 Zayid Mani, Brokridge Services for U.S. listed registered registered securities are offered by open to the public investing incorporated member finra and si pc

The Rundown - Tesla Promises Cheaper EV Model, Boeing Burns Less Cash Than Expected

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