This week could be a pivotal moment. Critical economic data will either soothe investor nerves or fuel the fear that the Fed is far from finished with its rate-hiking campaign. Meanwhile, tech giants take center stage, and their results could set the tone for the broader market.

Buckle up? Not quite – this might be more of a “brace for turbulence” situation. Today, we’re analyzing the market’s weak points and identifying potential defensive plays. Expect a healthy dose of economic insights and a sprinkle of market-related trivia to spice things up.

Let’s get tactical!

Market Drivers: Inflation Fears and Earnings Drama

The market’s undercurrent of anxiety is becoming undeniable. Here’s a breakdown of the key forces currently shaping investor sentiment:

The Fed Factor: Stubborn inflation readings have spooked the market lately.  Investors are recalibrating their expectations, bracing for higher interest rates for longer.  This translates into pressure on stocks, particularly those with lofty valuations.

Earnings Roulette: Earnings season is in full swing,  Results so far have been a mixed bag. Even decent reports seem to be met with a collective shrug as investors shift their focus from individual companies to the macroeconomic chessboard.

Big Tech Takes the Spotlight: Mega-caps like Tesla, Meta, and Alphabet have a disproportionate effect on market sentiment.  Any disappointments or surprising guidance from these heavyweights could send shockwaves through the broader indices.

Battle of the Bonds: The recent spike in Treasury yields is cause for concern.  Rising rates make stocks less attractive in comparison. Keep a close eye on the 2-year yield particularly, as it’s a barometer of Fed policy expectations.

Key Stocks on Deck

Tesla (TSLA): The EV giant, still down significantly this year, faces intense scrutiny ahead of earnings. Investors will zero in on profit margins, cost-cutting measures, and updates on future models.

Zions Bancorporation (ZION): A bright spot in recent earnings, Zions delivered strong results on both earnings and margins. This suggests potential resilience within the regional banking sector.

Cardinal Health (CAH): The healthcare company’s stock took a hit on news of a contract loss. This highlights the risks for companies that are heavily reliant on a few major clients.

Tactical Considerations

In this environment, a shift toward quality and defensiveness might be prudent.  Sectors like healthcare and consumer staples tend to weather inflationary storms better than others.  Also, don’t overlook the “safety” of cash – keeping a portion of your portfolio liquid offers flexibility in a volatile market.

The Fun Corner: The Toilet Paper Crisis

With inflation making headlines, everyone’s on the hunt for assets that can outrun rising prices. Crypto? Too volatile. Gold? A bit old-fashioned.  Then some genius decided that the ultimate inflation hedge might be… toilet paper. After all, we’re all familiar with pandemic-induced panic buying, right?

Here’s the thing: Investing in TP might not be as brilliant as it sounds.  Storage costs alone could eat into your potential profits.  Plus, unlike gold, toilet paper has a limited shelf life (and let’s not even get into the potential for mold).

Can Big Tech Save the Day?

The market’s early-year optimism is fading fast. A potent mix of sticky inflation, rising yields, and a less-than-stellar earnings season so far has investors questioning the strength of the rally.  This week, all eyes are on Big Tech earnings and critical economic data for clues about the market’s next move.

The Inflation-Fed Conundrum: The battle against inflation isn’t over yet. Friday’s PCE report could either calm market nerves or further solidify expectations of those higher interest rates for longer. A stubborn inflation reading will likely add to the pressure on stocks.

Earnings Disappointment:  Even positive earnings surprises seem to be met with indifference.   Investors have become hyper-focused on the macroeconomic picture, leaving little room for individual company outperformance to shine.

Big Tech’s Turn in the Spotlight: Can tech titans like Meta, Microsoft, and Alphabet revive market enthusiasm? Their results this week will be scrutinized for any hints about the sector’s resilience amid economic and inflationary headwinds.

Yields on the Rise: The spike in Treasury yields is another cause for concern. Rising rates make stocks less appealing by comparison. Keep a close eye on the 2-year yield  – it’s a key indicator of market sentiment and Fed expectations.

The Takeaway: In this skittish environment, it might be wise to lean towards defensive positioning. Sectors like healthcare and consumer staples tend to be less vulnerable to economic downturns. And don’t forget the often-overlooked strategy: holding some cash to provide flexibility and potential buying opportunities if the market takes another tumble.

The Last Say: What’s in the Cards?

Today’s market action feels like a high-stakes poker game. Inflation data and Big Tech earnings are the next cards to be revealed.  Will they strengthen the bulls’ hand or force the bears to go all-in? Will optimism prevail, or will the recent fragility turn into a full-blown downturn? The market will soon deliver its verdict, and one thing’s for sure: the coming days could set the tone for the market in the weeks ahead.

The post Breaking Point? Markets Face Critical Week appeared first on Global Investment Daily.

Excitement and Praise:

Futuristic Appeal: Many people found the Cybertruck’s unique, polygonal design to be futuristic and unlike any other vehicle on the market. Its angular lines, stainless steel exoskeleton, and electric-powered features resonated with those who appreciated a bold departure from traditional automotive design.

Innovation: Some enthusiasts praised Tesla for pushing the boundaries of automotive design and engineering. They saw the Cybertruck as a symbol of innovation and a representation of Tesla’s commitment to disrupting the automotive industry.

Skepticism and Criticism:

Aesthetic Concerns: Critics and traditionalists were quick to point out what they considered unconventional and even unattractive design elements, such as the Cybertruck’s sharp edges and unconventional shape. They believed it deviated too far from the typical aesthetic expectations of a consumer vehicle.

Practicality: Concerns were raised about the practicality of the design for everyday use. Some questioned its ability to fit in garages or navigate tight parking spaces due to its larger dimensions.

Safety: The Cybertruck’s design also led to discussions about safety, with concerns about pedestrian safety and the potential for other vehicles to collide with its angular surfaces.

Memes and Pop Culture:

The Cybertruck’s design sparked a wave of internet memes, jokes, and parodies across social media platforms. Its distinct appearance became a pop culture phenomenon, generating both humor and commentary.

Pre-Order Interest: Despite the mixed reactions, the Cybertruck garnered a substantial number of pre-orders shortly after its unveiling. This demonstrated that, while some may have reservations about the design, there was significant interest in the vehicle’s features, including its electric drivetrain and potential performance capabilities.

Tesla’s approach to the Cybertruck’s design was undoubtedly polarizing, but it also generated significant attention and public discourse. Over time, Tesla has made some design updates based on feedback and has continued to refine the Cybertruck as it progresses toward production, which may influence how it is received by consumers and the automotive industry in the future.

Troubles Keep Plaguing the Launch of the CyberTruck

Apparently, there are so many problems with the design of the Cybertruck, that a complete re-design may be in order.

In a scathing August article from Fast Company, the Cybertruck has so many blatant design flaws, including misaligned doors and uneven surfaces, that nothing short of a complete re-design will fix the problem.

Wired magazine reported in June that a leaked internal  company report revealed that  the preproduction “alpha” version of the Cybertruck was still struggling with some basic problems with its suspension, body sealing, noise levels, handling. and braking.

Even Elon Musk admits there are many issues that need to be fixed. In an internal email to employees, Musk remarked “Due to the nature of Cybertruck, which is made of bright metal with mostly straight edges, any dimensional variation shows up like a sore thumb.”

Wired mentioned in their article that the vehicle was supposed to start rolling off production lines in 2021. But two years on, the trucks still haven’t been delivered, and for most customers, they won’t be until 2024 at the earliest.

Tesla stock has been taking a beating since their earnings disappointment in October. Although it’s slowly grinding its way back up, investor sentiment is still bearish on TSLA.

The ongoing delays in deliveries of the Tesla Cybertruck suggest that addressing and resolving design flaws is a critical aspect of bringing this groundbreaking vehicle to market. 

The Cybertruck’s distinctive design, while eliciting both excitement and skepticism, has presented engineering and manufacturing challenges that require careful consideration and modification. 

As Tesla continues to refine the design and production processes, it is likely that the company will prioritize ensuring that the vehicle meets safety and regulatory standards, addresses practical concerns, and aligns with consumer expectations. 

Until these design issues are thoroughly addressed and resolved, it is reasonable to expect that delivery timelines for the Cybertruck may experience continued delays as Tesla works towards producing a vehicle that can meet the demands and expectations of its customers.

The post Is the Tesla Cybertruck a Dud? appeared first on Global Investment Daily.

About BYD

BYD Co. Ltd. (Build Your Dreams) is a Chinese multinational company that primarily operates in the automotive and renewable energy industries. Founded in 1995, BYD is headquartered in Shenzhen, Guangdong province, China, and has become one of the world’s leading electric vehicle (EV) manufacturers and battery producers. Here are some key aspects of BYD:

1. Electric Vehicles (EVs): BYD is renowned for its electric vehicles, including electric cars, buses, and trucks. The company produces a wide range of EVs, from small passenger cars to electric buses and commercial vehicles. They have made significant strides in the EV market and have expanded their global presence in this sector.
2. Batteries: BYD is a major player in the production of lithium-ion batteries. They manufacture batteries not only for their own vehicles but also for other automakers and various applications, such as energy storage systems (ESS) and mobile devices.
   
3. Warren Buffett Investment: In 2008, the American investor Warren Buffett’s Berkshire Hathaway Inc. invested $232 million in BYD, acquiring a significant stake in the company. This investment garnered international attention and boosted BYD’s profile in the global business community.
   
4. Renewable Energy: Beyond electric vehicles and batteries, BYD is involved in various renewable energy projects, including solar power generation and energy storage solutions. They provide solar panels and energy storage systems to help meet the growing demand for sustainable energy sources.
   
5. Global Presence: BYD has expanded its operations internationally and has established a presence in many countries and regions worldwide. They have manufacturing facilities and subsidiaries in countries such as the United States, Brazil, India, and Europe, enabling them to tap into global markets.
   
6. Innovation: The company places a strong emphasis on research and development, continuously working on innovations in electric vehicle technology, battery technology, and other areas related to sustainable transportation and energy solutions.
   
7. Sustainability: BYD is committed to sustainability and reducing its carbon footprint. They aim to promote green transportation and environmentally friendly technologies to combat air pollution and climate change.
   
8. Challenges: Like other automotive companies, BYD faces challenges related to competition, technological advancements, and regulatory changes in the electric vehicle industry. However, they have shown resilience and adaptability in response to these challenges.

BYD’s combination of electric vehicle manufacturing, battery production, and renewable energy solutions has positioned it as a significant player in the global push for cleaner and more sustainable transportation and energy systems.

What are the key differences between Tesla and BYD vehicles?

Tesla and BYD are both prominent manufacturers of electric vehicles (EVs), but there are several key differences between their vehicles in terms of design, technology, markets, and overall brand identity. Here are some of the key differences between Tesla and BYD vehicles:

• Geographic Origin and Market Focus:
  
  • Tesla is an American company founded in California, with a strong presence in the United States and a focus on the global luxury and performance EV market.
  • BYD is a Chinese company with a significant presence in China and a broader focus on the global mass-market and commercial EV segments.
    
• Vehicle Models:
  
  • Tesla primarily produces premium electric cars, such as the Model S, Model 3, Model X, and Model Y, along with electric sports cars and upcoming products like the Tesla Cybertruck and Tesla Semi.
    
  • BYD manufactures a range of electric vehicles, including electric cars (e.g., the BYD e6, Qin, and Tang), electric buses, and commercial electric vehicles (e.g., electric trucks and vans).
    
• Price Range:
  
  • Tesla vehicles are generally positioned in the premium to luxury price range, making them relatively expensive compared to many other EVs.
  • BYD vehicles tend to cover a broader price spectrum, including more affordable options for mass-market consumers.
    
• Battery Technology:
  
  • Tesla is known for its advanced battery technology, which includes the use of cylindrical lithium-ion cells and its own custom-designed batteries produced at the Gigafactories.
  • BYD also produces lithium-ion batteries but focuses on different chemistries and cell formats for various applications, including iron phosphate (LiFePO4) batteries known for their safety and durability.
    
• Autonomous Driving and Software:
  
  • Tesla has developed a reputation for its advanced driver-assistance features and autonomous driving capabilities, with its Autopilot and Full Self-Driving (FSD) technology being key selling points.
  • BYD also offers various levels of driver-assistance technology but may not be as advanced as Tesla in terms of autonomous driving capabilities.
    
• Charging Infrastructure:
  
  • Tesla has developed a proprietary Supercharger network, providing fast-charging stations primarily for Tesla vehicles. They have also opened up access to some third-party EVs in certain regions.
  • BYD relies on more standard charging infrastructure, often using industry-standard connectors and adapters.
    
• Global Reach:
  
  • Tesla has a substantial presence in North America, Europe, and other parts of the world, with a strong network of stores, service centers, and charging infrastructure.
  • BYD has a significant presence in China and has expanded into various international markets but may not have as extensive a global network as Tesla.
    
• Brand Image:
  
  • Tesla is often associated with cutting-edge technology, innovation, and a premium brand image.
  • BYD is recognized for its focus on practical and affordable electric transportation solutions, especially in the mass-market and commercial sectors.

These differences reflect the distinct strategies and target markets of Tesla and BYD. While Tesla emphasizes premium electric cars and advanced autonomous driving technology, BYD focuses on a wider range of electric vehicles, including more affordable options and commercial applications, and places a strong emphasis on battery technology and sustainable transportation.

BYD is China’s largest EV manufacturer, producing 1.5 million vehicles in 2022, and just reported a record quarterly profit in spite of Warren Buffet dumping $25.8 million dollars worth of BYD stock.

BYD Stock Surges Since 2020 (OTC Markets: BYDDY) 

Monthly Chart of BYDDY: TradingView

For roughly 10 years after going public in 2009, BYD traveled in a range between $3 and $20. In 2020, the stock took off, reaching a high of $80.75 in June 2022. BYD is currently trading at $60.92.

The post Tesla Faces Serious Competition from this EV Manufacturer appeared first on Global Investment Daily.

Make no mistake about it, the EV revolution is in full swing, and it’s backed by tax credits of up to $7,500 which brings the cost of these vehicles in line with internal combustion vehicles. The Biden administration is investing heavily in a nationwide network of EV charging stations to help extend the range of EVs on the road. The Tesla charging connector is becoming the defacto standard in many states like Texas. In the years to come, we will see charging stations everywhere. Even major retailers like Walmart plan to install EV charging stations at thousands of their locations.

Electric Cars Ranked By Price

Although Tesla has dominant market share, InsideEVs.com ranks a wide variety of electric vehicles by price from cheapest to most expensive after tax credits.

The Chevrolet Bolt leads the cheapest cars on the list with adjusted prices in the range of $20,000 – $22,000. There’s a jump in price to the Nissan Leaf which carries a $29,000 price tag. Prices quickly ramp up to the $40,000-$60,000 range.

Source: InsideEVs.com

For the entire list of brands by price, click here.

Sales of EVs are showing a parabolic growth curve since 2016, according to Statista.com. Vehicle sales have ramped up from 150,000 units in 2016 to 1.08 million vehicles in 2023. By 2028, total vehicles sold is expected to be 2.46 million vehicles sold.

EV Sales by Manufacturer

In 2022, Tesla led all other EV makers by a large margin with 51.7% of all EVs sold. Ford was a distant 2nd place at 7%. All of the others represented less than 5% of sales.

Source: Statista.com

Charging stations are expected to rise from 130,200 in 2023 to 290,000 stations in 2027.

EV Stocks in 2023

Tesla (TSLA) ran from $101 to a high of $273 in 2023

Rivian (RIVN) has been range-bound mostly between $14 – $16 in 2023

Ford (F) has climbed from $12 to $14.50 per share in 2023

Daily Chart for Tesla (TSLA) in 2023

Stay tuned to Global Investment Daily as we monitor developments in the EV industry.

The post Top EV Makers Ranked By Sales and Price appeared first on Global Investment Daily.

In 1997, The Phillips/Fujitsu Plasma flat screen TV hit the market with a retail price of  $22,924. The TV was accessible for the very few, but out of range for the average consumer at an average cost of $30.45 per square inch.

Twenty years later, in 2017, LG produced a 55” TV for $2,300 for an average cost of $1.78 per square inch. The TV provided better quality and resolution than the old plasma TVs at a cost that was far more accessible to the average consumer.  (Source: CNET)

Today, a quick online search shows 55” TVs retailing for under $400 at Bet Buy, Walmart and other retailers. Big screen TVs are now affordable for everyone.

The same trend is starting to appear in the Electric Vehicle (EV) industry.

Back in 2017 the Tesla Model X retailed near $100,000. The same Model X retails for $66,000 in 2023, according to Cargurus

Source: Cargurus.com

Driving around Austin where I live, you might have been able to spot a Tesla or two on the roads while running errands a few years back. Today, I see more Teslas on the road than Mercedes. It’s a game I like to play while driving.

Elon Musk is Driving Down the Cost of EVs, Competition Responds

In a recent article by Reuters, Tesla announced its sixth U.S. price cut, dropping the cost of the Model Y to a base price of $39,990, well into the neighborhood of comparable internal combustion vehicles. When you add EV tax credits of up to $7,500, the price drops even further.

The price reductions are believed to gain market share in the face of EV competition from multiple car makers. And it’s not just in the U.S. Tesla has announced price cuts in China, Japan, Australia, Singapore and Europe as well.

In response, price wars are breaking out in China for comparable EVs, according to an article in the New York Times.

The Biden administration is investing heavily in a national network of EV charging stations as part of his national infrastructure bill. Walmart and other retailers are looking into installing their own charging stations. As the network of charging stations expands across the country, EVs will become not only more affordable, but it will provide greater driving range.

Just like TVs becoming far more affordable over the past few decades, the same is happening with the EV industry.  Stay tuned as we follow this trend.

The post <strong>Are EVs Finally Becoming Affordable for the Masses?</strong> appeared first on Global Investment Daily.

It’s a script that has played out with numerous commodities including potash, graphite, cobalt, rare earths, vanadium, and even marijuana (though not strictly a commodity).

And it’s now playing out with helium, the second-most abundant element in the Universe behind only hydrogen, yet also one of the rarest elements on our planet.

Helium’s scarcity and value stems from the fact that it’s an inert gas that does readily react with other elements or much of it generated by earth’s natural processes. It’s also 7x lighter than air and readily leaks into space and eventually gets torn away by solar winds.

Each year, our planet generates about 3,000 tons of helium through radioactive decay deep in the bowels of the earth. Unfortunately, the vast majority leaks off into space, and the little that  is trapped in the atmosphere comes nowhere close to meeting our global demand of 32,000 tons of helium per year (about 6.2 billion cubic feet measured at 70°F and under earth’s normal atmosphere). 

Indeed, the majority of our helium reserves are found in ancient shale formations. Helium is, therefore, regarded as a finite, non-renewable resource.

Yet, many investors have been sleeping on an unraveling helium boom, thanks to

explosive growth in the semiconductor and healthcare industries as well as space and quantum computing.

This rare gas is endowed with unique qualities that make it indispensable in many key applications including space exploration, rocketry, high-level scientific applications, in the medical industry for MRI scanners, fiber optics, electronics, telecommunications, superconductivity, underwater breathing, welding, cryogenic shielding, leak detection, and in lifting balloons. 

At a melting point of -261.1°C (-429°F), helium has the lowest melting point of any element, meaning there’s no substitute for the gas where ultra-low temperatures are required such as superconductors. For instance, the fastest train ever built, the SC MagLev, capable of speeds of more than 600 km per hour, uses liquid helium to cool the superconducting material, niobium‐titanium alloy, to 452 degrees Fahrenheit below zero.

According to ResearchAndMarkets, the global helium market is projected to reach US$18.2B in 2025, growing at a CAGR of 11.2% during the period 2021 to 2025 mainly driven by robust medical and consumer electronics demand. About 30% of the world’s helium supply goes into MRI scanners while another 20% goes into the manufacture of hard disks and semiconductors.

Meanwhile, Big Tech companies such as Google, Facebook, Amazon, and Netflix are heavy users of helium in their massive data centers.

With demand constantly outstripping supply and the federal government no longer freely selling helium, prices have skyrocketed, hitting $35 per liter in 2019, more than double an average of $14.60 per liter they commanded three years ago.

Helium Uses

Source: Helium One

No more helium from the Fed

The biggest chink in the helium supply chain is the fact that a large chunk of the supply is in the hands of the U.S. federal government.

Back in 1925 when helium-based airships seemed like they would become vital to national defense, the U.S. government created the Federal Helium Reserve (FHR) out of a giant, abandoned salt mine located 12 miles northwest of Amarillo, Texas. Over several decades, FHR collected as much helium as it could and essentially became the world’s strategic helium reserve supplying ~40% of the world’s needs.

Unfortunately, the FHR eventually ran into debt trouble to the tune of billions of dollars thanks to its habit of selling helium at well below market prices. In 1996, the U.S. government passed laws mandating FHR to sell off its reserves and close in 2021 in an effort to recoup its debts.

The Bureau of Land Management (BLM) has outlined the process and timeline by which the FHR will dispose of its remaining helium and helium assets.  BLM, which now manages the reserve, managed to sell off most of the stored helium to all users, with the remaining 3 billion cubic feet (84 million cubic meters) by 2018 restricted for sale to only federal users, including universities that use helium for federally sponsored research. BLM held its last Crude Helium Auction in Amarillo, Texas, in 2019 with the price rising 135%, from $119/Mcf in 2018 to $280/Mcf in 2019. 

The sale of crude helium to private industry has been discontinued and the remaining stockpile is earmarked for Federal users only.

The sale deadline has since then been extended to 30 September 2022, but  privatization likely won’t be completed until at least 2023.

There are a ton of stocks to play in this space, including giant Exxon (NYSE:XOM), which produces about 25% of the world’s helium supply at its plant in LaBarge, Wyoming. Regeneron (NASDAQ:REGN) is also poised to become a major helium player, with South Africa’s first-ever liquid helium processing technology. And plenty of small-caps form some potentially juicy new entrants to this space. 

This is one to watch. It’s not about balloons anymore. 

The post Abundant Yet Rare: The Juicy Helium Paradox appeared first on Global Investment Daily.