The Rundown - Tesla's European Sales Take a Hit, Temu Reveals Trade War Struggles

Episode Date: May 27, 2025

Stock market update for May 27, 2025. This video is for informational purposes only and reflects the views of the host and guest, not Public Holdings or its subsidiaries. Mentions of assets are not recommendations. Investing involves risk, including loss. Past performance does not guarantee future results. For full disclosures, visit ⁠⁠Public.com/disclosures⁠⁠.

Public.com presents the rundown. Your daily market update in under 10 minutes. My name is Zadadmani, and today is Tuesday, May 27th. In today's episode, we preview a stacked week, earnings from Nvidia, Costco, and more. We also dive into Tesla's struggles in Europe and why BYD did a massive price cut in China. Then stick around to the end of the show to find out why this might be a monster summer for the movies. We got a great show for you today. Let's go.

Well, guys, the markets are coming off a pretty tough week. Last week, the S&P 500 and NASDAQ both lost more than 2.5% for the worst week in a month. I think investors were feeling a bit nervous last week about the Moody's U.S. credit downgrade and the treasury yields going up. And we also got a classic Trump tariff freakout as well. On Friday morning, President Trump threatened to hit the European Union with 50% tariffs starting June 1st. And that sent the markets into a bit of a spiral. But then in classic Trump fashion, he blocked back those tariffs over the weekend,

pausing them until July 9th after having a conversation with the EU Trade Commissioner, Maro Sefcovic. So it was a classic Trump playbook, and it played out so fast, he threatened tariffs on Friday and then backs off by Sunday. You know, if he keeps doing this, I wonder if the markets are just going to ignore any future tariff threats. Now, something the markets aren't going to be ignoring, though, is Nvidia earnings. They drop this week on Wednesday after the market closed. Every quarter, it feels like Nvidia's earnings are the most anticipated of the earnings season.

And quarter after quarter, they delivered solid numbers and beat expectations. So we'll have to see if they can do that once again. The Options market is pricing an 8% move in the stock after the earnings. So they're expecting pretty high volatility. So we're going to be paying close attention to the earnings on Wednesday and recap all the stuff on Thursday's show. On top of Nvidia, we're also getting earnings from Salesforce, Dell, and many big retailers like Costco, Best Buy, Dick's sporting goods, and Gap. So we have a pretty stacked week of earnings, and we'll have to see if the markets can bounce

back after last week's stumble. Let's run through some headlines. Starting with Tesla. Tesla continues to struggle, especially in the European market. Tesla sales in Europe dropped by 49% in April, making that the company's fourth straight month of decline in the EU. And it's not like Europeans aren't buying. EVs anymore. In fact, EVs sales were up 34% in the month of April year over year.

But Tesla continues to lose market share. Their share of the battery electric market is now just 9% in the first quarter of this year. That's down from 18% in 2020 and 16% in 2024. Tesla has been facing a lot of competition worldwide in the EV space and one of their biggest competitors is the Chinese EV company, BYD. BYD sold more EVs in Europe than Tesla for the first time ever in the month of April, according to research from Jado Dynamics. And beyond just the increased competition, Tesla has also faced some damaged brand value

because of Elon's political antics over the last few months, and that's having a noticeable impact on Tesla sales. So we'll have to see if this reputational damage can be reversed. Elon seems to be spending less time in Washington, D.C. and Doge. In fact, over this past weekend, he said he's going back to working 24-7 on Tesla and his other ventures. So we'll have to see if Tesla can turn things around. But man, the competition, especially in China, is getting pretty nuts.

There's a pretty intense price war amongst all the Chinese EV players. In fact, BYD announced a few days ago that it would start slashing prices by as much as 34% in the Chinese market. They're trying to hold onto the market share in China. BYD shares did hit a record high last week, but they're down 9% in the Hong Kong Stock Exchange on Monday after the announcements of the price cuts. Let's shift gears and talk about another struggling company. Southwest Airlines. It's an end of an era for the Southwest Airlines because starting tomorrow,

they're going to officially start charging for check bags. You know, they had the iconic Bags Fly Free slogan for over 50 years now. Well, no more. Starting on Wednesday, you're going to have to pay $35 for your first check bag and $45 for your second one unless you're flying business select or have some sort of elite status. For the rest of us, we're just going to have to start stuffing our carry-ons again. Now, Southwest was kind of forced to do this, because an activist investor took a big stake in the company, and they were pushing the company to monetize more aggressively. And last year, U.S. Airlines made $7.3 billion off of baggage fees alone,

so Southwest was leaving a lot of money on the table. The company is also ditching their open seating policy and rolling out basic economy fares, which I think I'm okay with. I wasn't a big fan of treating the airplane like a bus. Now, they are going to charge even more for premium seating based on leg rooms and boarding priority, so they're essentially going to have a first class section like the other airlines. So we'll see if this is enough to turn the company around.

Southwest stock is down nearly 50% since May of 2021, significantly underperforming other airlines of United and Delta. Let's talk about some stocks making moves today. Shares of Infomatica are jumping this morning after Salesforce officially announced that it's buying the data management company for $8 billion. Infomatica helps companies like Toyota and Unilever manage their data across cloud, in on-prem systems. That's a lot of buzzwords.

Basically, it's like the plumbing behind enterprise AI and analytics. So this acquisition by Salesforce is a clear signal that they're doubling down on data infrastructure as they lean deeper into the AI space.

Now, Salesforce actually tried to buy Informatica over a year ago, but the deal fell apart over pricing. But I guess I never stopped talking and they were able to tie the knot at $25 a share. Now, rumors of his acquisition

started circulating on Friday and shares of Informatica are up nearly 18% since. By the way, this deal by Salesforce is their second largest ever, only behind the $28 billion they paid to acquire Slack back in 2021. Kind of wonder if they regret that decision. Now, on the flip side, shares of PDD holdings, the parent company of Timu, is down more than 20% this morning

after reporting weak earnings that missed across the board. Both revenues and profits came in lower than expected, and the biggest issue is that their growth is slowing. PDD sales growth was just 10% in Q1. That's down from 24% the previous quarter. The Chinese company is facing two major problems. First is the trade tension between the U.S. and China. Now, yes, a majority of the tariffs are on pause between the two countries.

But the Trump administration closed the loophole earlier this year that allowed TEMU to ship packages to the U.S. that were under $800 without having to pay any tariffs. Now that that loophole is closed, Timu is having to pay tariffs, which is forcing them to raise prices and also impacting their profit margins. On top of that, Timu was also feeling pressures back home.

Consumer demand is softening in China and competition is heating up. So PDD investors are getting nervous and the stock is down big today. Let's wrap the show with a fun fact. The box office had a record-breaking Memorial Day weekend, pulling in $322 million between Friday and Monday. And the two movies leading the charge were the live action Lilo and St. movie and the eighth Mission Impossible movie. They both came out on the same weekend. The Lilo and Stitch live action put up some monster numbers, no pun intended, making $183 million

domestically and another $158 million overseas. The original Lilo and Stitch came out back in 2002. It's a classic movie. And I think all the millennials like myself who watched that movie as a kid dragged their kids to the movie theaters to watch the live action remake. So big win for Disney. It looks like their live action remakes can still make. a ton of money. And then the other big movie, like I said, was Mission Impossible. It looks like Tom Cruise is still risking his life for our entertainment. The man is 62 years old and still jumping out of airplanes. This latest Mission Impossible movie had the biggest opening weekend in the franchise's 29 year history, making more than $77 million in the U.S. I'll be honest with you guys,

I haven't seen a single Mission Impossible movie, and now I feel like I'm too behind to watch it. Overall, great start to the summer movie season. I'm sure movie theater chains like AMC are hope and this momentum carries through the rest of the summer because we do have a pretty stacked movie lineup. We might have to keep a close eye on AMC stock over the summer. Well, all right, guys, that's the rundown for today. Hope you guys had a great long weekend. We have a short week coming up, but a lot to talk about. Invidia earnings being the main thing. We also have some economic data coming out this week as well. And who knows, Trump might be threatening tariffs again. So we'll keep an eye out for that. By the way, if you guys enjoy the show,

consider giving us a five-star rating on Apple or Spotify. And if you're listening on Spotify, don't forget to vote in today's Spotify poll. Leave us a comment on Spotify. Tell us what movie you're looking forward to watching this summer the most. Personally, for me, it's the F1 movie. All that engagement really does help us out, and it helps other people find the show. Thank you guys so much for listening. Shout out to Mike and Connor for all the help behind the scenes.

And we'll see you guys back here tomorrow.