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Discounts on Tesla Cybertrucks, bank earnings are out, Gaza's deal with Israel is having problems, and retail sales are in. Here’s some information on what you need to know to start your trading day or just your news day in general on the AM version of your Meet Kevin report for January 16th at 6:00 a.m.
All right folks, let's get started on news that makes new money. First, there's some drama going on regarding Elon Musk and the Tesla Cybertruck. That's because all of a sudden now there are discounts showing up for the Tesla Cybertruck, which is really interesting. Just a few days ago, Elon Musk posted that they were using Cybertrucks, delaying people's Cybertruck deliveries, and using them in Los Angeles to deploy Starlink service to give people free internet access.
Now, fans of Elon Musk said, "What a charitable man!" Haters of Elon Musk said this is a marketing gimmick for Starlink and Cybertrucks. Personally, I'm not opposed to Elon Musk doing marketing like this because it's kind of a win-win. It's a win for the companies for marketing, and it's a win for people who want internet access in a disaster. So, I'm a big fan of this.
But I did actually think that there weren't that many people who were actually having their Cybertruck deliveries delayed. It's possible maybe one person got their car delayed, as we talked about a couple of days ago. But now I feel like there might be a little bit of confirmation to this suspicion. This is not me trying to say anything bad about Tesla; I'm a big fan of my Tesla Cybertruck.
As somebody who owns a Cybertruck, I'm also paying attention to what's going on with Cybertruck sales. I love the thing, by the way. I encourage people to buy it. But take a look at this. This is the current Tesla website, and what you'll find is here within 200 miles of my ZIP code 93004, you actually find multiple reduced price Cybertrucks sitting in inventory.
If I remove the five years of included gas savings, you can actually see you've got about a $2,500 discount on this one right here. I've got a demo vehicle here, and here's a new one that's got about a $1,600 discount. So, the demo vehicles have a $1,500 to $2,000 discount, and then the new vehicles that are not listed as demo look like they have a little bit of a discount as well, depending on the model.
This is weird because I don't understand what's up with this one. Maybe this has some form of an upgrade here, but it says reduced price with a $1,600 price reduction, yet it's listed at $8,350, which is usually slightly above your starting price. This one says it has a $3,500 price reduction, so maybe there was a certain color or some form of upgrade that this has.
Oh, it could be the interior is, say, white. Ah, the white on the inside, that's what it is. Okay, got it. So, $2,000 upgrade there that they're basically almost fully discounting off. Got it.
In my opinion, it is a sign of how competitive the auto market is right now, and that's probably what you're going to expect if you're going to buy a car over the next year. You're probably going to see more discounting that's going to make you go, "Maybe I should have waited." Don't get me wrong; I don't regret my Cybertruck at all, but it's interesting to pay attention to, especially since we've got Tesla earnings coming up within the next few weeks.
So now what we've got to do—actually, you know what? Let's see if we can find the Tesla earnings date. I feel like that would be kind of cool. Let's see here. Tesla earnings date—have they already announced what date they're going to? Scheduled for January 29th tentatively. So, given that that's in about 13 days, it should be pretty accurate.
Next up, we have retail sales. The retail sales control group beat by 0.7% versus the 0.4% expected this morning. However, we had a miss on the advance, a miss on ex-auto, and a miss on ex-auto and gas. So really just that control group beating is kind of a mixed set of data here. Not entirely sure if any of this really matters. Same thing for unemployment claims or continuing claims—nothing new to see there.
Now, the TikTok CEO, in other news, was invited to the inauguration, which is really interesting because a lot of folks think the TikTok CEO is going to basically cozy up with Trump and maybe try to find a buyer, given that you've got plenty of billionaires around there. I mean, think about it. Bezos is going to be there, Tim Cook is supposed to be there, and you've got Mark Zuckerberg and Elon Musk. They're all going to be there.
It's literally like shooting billionaires in a barrel. You know, in reference to shooting fish in a barrel. Okay, no violence here, no violence. But anyway, this will be really interesting because if Donald Trump, on day one—almost said Elon Musk, almost said President Musk—anyway, it is interesting because a lot of people think that Donald Trump might sign an executive order next Monday or call it Tuesday morning, the day after the inauguration, delaying the enforcement of the TikTok ban and then creating an opportunity for somebody else to buy it.
Gaza and Israel's ceasefire signed yesterday has not yet been ratified by the Israeli Parliament. Israel is now claiming that Hamas wants to be able to fight again after phase one, or there are debates going on around which hostages, dead or alive, are going to get sent back to Israel. Either way, the Biden Administration says, "You know, the deal's a deal; everything's fine, and now we're just working through the implementation phase."
All right, whatever. But you're going to hear a lot about that this morning. On the side of layoffs, BP is laying off 5% of its workforce—that's 4,700 individuals on the internal side, plus 3,000 contractors. HSBC is expected to announce some cost restructuring and limited bonuses.
Some good news for Target, though: sales are up 1.5% year-over-year. That's pretty low, but it's better than the flat guidance they gave previously. So they've got some size rather than being flat. Target's trading for about 15.7 times earnings, and their EPS is expected to grow about 8.35% per year over the next four years, putting them at about a 1.88 PEG.
Lulu and American Eagle actually beat on earnings expectations as well, and sort of retail results here. What we're finding during the holiday season is that Lulu is still trading a little rich at 26.2 times earnings, so trading for about a 2.5 PEG. American Eagle is only trading for 9.4 times earnings, trading for about a 1 PEG, so on the lower side there for American Eagle with 9% growth expected over the next two years—not a lot of forecast for that one, though.
Blue Origin launched a rocket yesterday; it was their first orbital launch, which would be a rocket that actually has enough speed to be able to stay in orbit. If you just shoot a rocket up to space and then it kind of falls back down, it means you didn't have the speed or altitude or trajectory to stay in orbit, and those are called suborbital launches.
So far, Blue Origin has been doing suborbital launches. Now it seems like they've almost entirely copied exactly what SpaceX is doing, and they're trying to land these rocket boosters on a water platform, just like a floating platform, basically just like SpaceX does. That did fail, but they're trying.
At the same time, a Starship from SpaceX is expected to have a test flight conducted tonight, so let's see if they can catch it again on those toothpicks. It's kind of epic when they do that, so I'll be looking forward to that.
Bank of America's Brian Moynihan, CEO, says the economy looks solid. Everybody seems to have an optimistic outlook, and there's broad momentum. This as Bank of America beat, and of course, yesterday banks beat as well.
Going into the trading day, we've also got Taiwan Semi with projected sales and capex beat above forecast. Honestly, pretty good here for the AI sector, especially my favorite, Super Micro. But anyway, 19% over expectations on capex spending, 6% over sales expectations for Q1. No clear time frames yet on the Arizona plant, but this is pretty optimistic.
TS Lombard says a soft landing should be achieved this year. Now, growth won't be coming from excess savings, stimulus, immigration, or faster productivity. Instead, we've got to rely on more lending, manufacturing, and real income staying up.
They did observe, though—and I thought this was a really interesting way to put it—they're like, "You know, we've kind of been through three fake recessions already." In 2022, we had the inversion of the yield curve and the technical recession for two quarters. In 2023, we had weak manufacturing and weak leading indicators.
Then in 2024, we had the SOM rule get triggered and the labor market starting to weaken, only for all of those problems to really unravel in a good way and the market to just keep going up. Honestly, so far, yeah, you could have easily gotten duped by any of those, all of them, or any combination of those. I know I wasn't immune to getting duped either by some of this data, but this economy just keeps humming along.
Goldman Sachs is expecting two rate cuts this year—once in June and once in December. They do warn, and this is where things aren't all Goldilocks. They warn that the market is highly concentrated, valuations are high, and the market is potentially priced to perfection under Donald Trump. TBD, expecting to get a whole heck of a lot of executive orders next week.
Goldman Sachs is projecting that the LA fires will drag on GDP by about 0.2 percentage points and take down about 15,000 to 25,000 jobs. A&Z research thinks we're going to get 100 basis points of Fed cuts this week, and so far, worst-case scenarios of layoffs haven't been happening.
Wolf Research did downgrade AMD today. AMD trades only for about a 1 PEG, which is almost half the valuation of Nvidia, sitting at about a 1.7 PEG. But AMD just keeps getting kicked down, and I have to say, the more it gets kicked down, the juicier it just seems to look.
Anyway, I wanted to give you a brief AM Meet Kevin report. Let me know what you think of a brief to get your day started first thing in the morning. Of course, we'll still have the PM edition later today, this afternoon.
Thanks so much for watching your AM edition of the Meet Kevin report. Let me know what you think in the comments down below. See you in the next one. Goodbye and good luck.
Why not advertise these things that you told us here? I feel like nobody else knows about this. We'll try a little advertising and see how it goes. Congratulations, man! You have done so much. People love you; people look up to you. Kevin P, the financial analyst and YouTuber, Meet Kevin. Always great to get your take.