🔋 Tesla Hits $1 Trillion

+ Retailers Are Prepping For Tariffs

November 08, 2024

Good afternoon! On Wednesday, OpenAI CEO Sam Altman shook things up by dropping a link to chat.com, which now redirects to ChatGPT. The domain, once owned by HubSpot’s Dharmesh Shah, was bought for $15.5 million before Shah flipped it for a higher price, hinting that OpenAI paid with shares rather than cash.

This redirect move aligns with OpenAI’s broader push to streamline access without changing the ChatGPT brand. The shift to chat.com follows the launch of its new “o1” model series, part of a larger strategy to clarify its offerings. And with OpenAI’s recent $6.6 billion in funding, splashing on a high-profile domain is just business as usual.

MARKETS

*Stock data as of market close*

  • The stock market wrapped up a blockbuster election week, with the Dow breaking past 44,000 and the S&P 500 crossing 6,000 for the first time—though both pulled back slightly by the closing bell. The Nasdaq hit an intraday high but closed mostly flat, while the Russell 2000 surged over 8%, notching its best week since April 2020.

  • Fueled by optimism over Trump’s pro-growth agenda and a fresh Fed rate cut, stocks recorded their best week of the year. Major indexes finished at record levels, signaling high hopes for the new administration’s impact on Corporate America.

STOCKS
Winners & Losers

What’s up 📈

  • Upstart surged 46.02% after the AI-driven lending platform exceeded Q3 expectations and provided an optimistic revenue forecast for the current quarter. ($UPST)

  • Doximity popped 34.15% on a better-than-expected quarter, driven by strong engagement on its digital platform tailored for medical professionals. ($DOCS)

  • Axon Enterprise climbed 28.68% to a new all-time high following strong quarterly results in the law enforcement technology sector. ($AXON)

  • Toast rose 14.72% on a solid Q3 earnings beat and strong Q4 guidance, projecting adjusted EBITDA between $90 million and $100 million, above analysts’ estimates. ($TOST)

  • BioNTech gained 2.56% after Goldman Sachs upgraded the stock to “buy” from “neutral,” highlighting potential upside from a new cancer treatment. ($BNTX)

What’s down 📉

  • Redfin tumbled 15.62% after reporting lower-than-expected earnings, cutting forecasts, and losing market share to competitors. ($RDFN)

  • Pinterest plummeted 14% after posting slower user growth and reduced ad pricing, which together drove shares lower. ($PINS)

  • Airbnb fell 8.66% after missing earnings expectations, despite surpassing revenue forecasts in Q3. ($ABNB)

  • Sweetgreen dropped 5.95% following a Q3 earnings miss and a Goldman Sachs downgrade from “buy” to “neutral.” ($SG)

  • Affirm dipped 4.73% despite reporting better-than-expected Q1 results, with revenue of $698 million and a loss of 31 cents per share, narrower than forecasts. ($AFRM)

STOCK
Tesla Hits $1 Trillion Amid Trump Win

Tesla's back in the trillion-dollar club. Shares skyrocketed 8% Friday, pushing its market cap over the $1 trillion threshold as investors jumped on the potential for looser regulations in a Trump administration.

Elon Musk, Trump’s most vocal supporter and a generous campaign contributor, saw Tesla surge about 30% this week alone. With hints at slashing electric vehicle subsidies and potential trade barriers for Chinese EV players, Wall Street sees a Trump-Musk partnership as a boon for Tesla’s market share in the U.S.

A Boost for Musk’s Billions

The Tesla rally has also catapulted Musk’s net worth past $300 billion, marking his highest fortune since 2021. Musk has been outspoken about leveraging his influence in Trump’s administration to accelerate federal approval for autonomous vehicles, a critical step for Tesla’s self-driving ambitions.

The partnership comes at a strategic moment, with Tesla now vying against Alphabet-owned Waymo in the autonomous driving race.

Trump Trade Implications for Tesla’s Competitors

Wedbush analyst Dan Ives noted that Trump’s pro-business stance could place Musk in a highly favorable position, shielding Tesla from new EV subsidies that have leveled the field for foreign competitors.

Meanwhile, U.S. rivals and industry giants like Nvidia, Amazon, and Microsoft now sit alongside Tesla in the trillion-dollar tech club, with Wall Street eagerly eyeing who will come out on top in this new era of deregulation.

NEWS
Market Movements

  • 🎥 Max’s Growing Subscriber Count and Password Crackdown: Warner Bros. Discovery’s streaming platform Max added 7 million new subscribers, outpacing Netflix for the quarter. However, the platform is now preparing to crack down on password sharing to boost revenue, starting with soft messaging before tightening restrictions in 2025.

  • 💼 Boeing’s Repayment Plan: Boeing will repay furloughed staff following the machinists' strike but plans to cut 17,000 jobs—10% of its workforce—to meet new financial targets. ($BA)

  • 💰 TSMC’s U.S. Commitment: Taiwan Semiconductor affirmed its $65B investment in Arizona remains intact despite Trump’s win, even as concerns rise about U.S. chipmaking capacity. ($TSM)

  • 🚨 AstraZeneca Exec Detained: China detained AstraZeneca's head of China operations, Leon Wang, amid a probe into alleged illegal imports and data collection, leading to a 12% weekly drop. ($AZN)

  • 💊 Decongestant Shakeup: The FDA proposes banning phenylephrine in popular cold medicines like NyQuil and Sudafed, affecting companies like Kenvue, Procter & Gamble, and Bayer. Walgreens and CVS may also face impacts. ($KVUE, $PG, ETR, $WBA, $CVS)

  • 📉 Icahn Boosts CVR Stake: Icahn Enterprises slashed its dividend to $0.50 per unit to fund an increased stake in CVR Energy, raising ownership from 66% to 81%. ($IEP, $CVI)

RETAIL
Retailers Are Prepping For Tariffs

Trump’s back in office, and with him comes a tariff policy that’s sending ripples through retail. With proposed tariffs up to 20% on all imports and a jaw-dropping 100% on goods from China, retailers are facing a fresh dilemma: absorb these costs or pass them onto consumers.

According to the National Retail Federation (NRF), these tariffs could add up to $7,600 in annual costs for American households, leading to what the NRF warns could be a “tax on American families.” Retail stocks like Dollar General and Five Below have already started to feel the heat, dropping as much as 10% this week as they brace for rising expenses and tightening margins.

Consumer Prices in the Crosshairs

Retailers are in a bind: either eat the extra costs or send prices soaring. The NRF predicts these tariffs could zap as much as $78 billion in consumer spending each year if fully enacted. Price hikes in double digits are on the horizon for categories like apparel, electronics, and household items, hitting customers’ wallets hard.

Stores that rely heavily on China for sourcing—like Five Below, Crocs, and Skechers—are particularly exposed, while discount chains worry that price jumps could scare away budget-conscious shoppers.

Winners, Losers, and Tariff-Proofing Strategies

Not every retailer is biting their nails. Giants like Amazon and Walmart, with massive buying power and diverse supply chains, are poised to weather the tariff storm. Meanwhile, brands like Steve Madden, already seasoned from Trump’s first tariff stint, have reduced reliance on China by nearly half to sidestep a hit.

As some retailers scramble, those who’ve diversified early may have a head start in staying ahead of what’s shaping up to be another trade showdown.

Calendar
On The Horizon

Next Week

Quick heads-up: the bond market’s clocking out for Veteran’s Day on Monday, but stocks are still in action.

The week’s packed with data drops and Fed chatter. Tuesday kicks off with the small business optimism index, Wednesday serves up CPI, and Thursday brings PPI alongside initial jobless claims. Finally, retail sales cap off the week on Friday.

Earnings season’s slowing down, but we’ve still got a few big names stepping up to the plate.

Earnings:

  • Monday: Angi Inc. ($ANGI), Aramark ($ARMK), and monday. com Ltd. ($MNDY)

  • Tuesday: Shopify Inc. ($SHOP), The Home Depot, Inc. ($HD), Spotify Technology S.A. ($SPOT), Cava Group, Inc. ($CAVA), Instacart (Maplebear Inc.) ($CART), Chegg, Inc. ($CHGG), and Restaurant Brands International Inc. ($QSR)

  • Wednesday: Dole plc ($DOLE) and Cisco Systems, Inc. ($CSCO)

  • Thursday: The Walt Disney Company ($DIS), JD. com, Inc. ($JD), Advance Auto Parts, Inc. ($AAP), and Applied Materials, Inc. ($AMAT)

  • Friday: Alibaba Group Holding Limited ($BABA)

NEWS
The Daily Rundown

  • 📉 Fed Cuts Rates Amidst Speculation on Independence: Fed Chair Jerome Powell cut interest rates to a 4.5%–4.75% range but faced tough questions on his future as President-elect Trump speculates on replacing him. Despite the cuts aimed at cooling inflation, the Fed’s path forward is uncertain, with potential policy shifts under Trump adding to the mix.

  • 🤝 Biden Vows “Peaceful Transition” to Trump Administration: President Biden addressed the nation, pledging a smooth transition to President-elect Trump while praising Vice President Harris’s inspiring campaign. As the GOP gains the upper hand in the Senate and House, Trump could soon hold a unified government to push his legislative agenda.

  • 🏠 Mortgage Rates Remain High Despite Fed Cuts: Homeowners waiting for mortgage rates to fall might have to keep holding their breath. The average 30-year fixed rate remains at 6.79%, driven up by the 10-year Treasury yield. Trump’s potential tax and tariff policies add uncertainty, likely keeping rates steady or even higher for the foreseeable future.

  • 🌎 California calls special session: California Governor Gavin Newsom has called for a special legislative session to "Trump-proof" the state's policies on reproductive rights and climate change before President-elect Trump takes office in January.

  • 📚 Dystopian novels surge: Sales of dystopian novels like The Handmaid's Tale have surged following Trump's victory, reflecting public concern over potential policy changes.

  • 💃 Raygun retires from breaking: Rachael "Raygun" Gunn, the Australian breakdancer who gained viral attention during the Paris Olympics, has announced her retirement from competition.

RESOURCES
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