Hey Snackers,
Behold! Another “Lord of the Rings”-inspired company name was revealed last week, as Peter Thiel and Palmer Luckey returned to Middle Earth for the name of the new national bank they’re starting, taking inspiration from the home of Smaug the dragon, who, like President Trump, surrounds himself with gold. If you’re a Tolkien fan and know some of the pair’s other LOTR-inspired brands, see if you can pick the real names that rule them all in our quiz.
Both the S&P 500 and the Nasdaq 100 notched fresh closing records last Thursday after a surprisingly strong June jobs report calmed labor market worries and put to bed any notion of a Federal Reserve rate cut in July.
Trivia time… Test your knowledge on our stories from last week with our Snacks Seven Quiz.
What is the fastest-growing YouTube channel?
Lithium batteries, silver linings, die-hard loyalists
Last week we got delivery numbers out of Tesla, Rivian, and Lucid. One of those carmakers, Lucid, delivered an additional thousand vehicles and saw its shares rise slightly. Another one, Rivian, saw deliveries drop by 3,000, and its shares dipped. Detecting a pattern? Well, of course, Tesla saw deliveries down by 60,000 year over year, but nevertheless the stock popped upward on the news. Markets!
Tesla, as usual, is the gravity-defying enterprise here, and there are a few reasons why.
Wedbush Securities analyst and Tesla bull Dan Ives flagged that though the 384,000 deliveries fell short of consensus estimates, they were better than the “whisper number” of 365,000 — the unofficial, unpublished number that Wall Street really expected.
The miss versus consensus was overall pretty narrow, coming in about 1% under, a narrower miss than last quarter.
While the stock has ridden high the past few months on optimism over the company’s now launched robotaxi program, Tesla has also faced numerous headwinds, including weak demand, fierce competition, and a couple of public feuds with President Donald Trump.
Through the stock’s ups and downs, retail investors have remained exceedingly loyal to Tesla. The EV company has a higher portion of small individual investors than the other Magnificent 7 stocks, with 38% of its shares owned not by insiders or large institutions.
The Takeaway
Tesla bulls are buying what CEO Elon Musk is selling. “The future of the company is fundamentally based on large-scale autonomous cars and large scale and large volume, vast numbers of autonomous humanoid robots,” Musk said on the latest earnings call, reiterating a point he’s made again and again. In other words: don’t miss the forest (autonomy) for the trees (struggling vehicle sales).
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Stories we’re watching
Is Centene a canary in the insurance coal mine? Selling government-sponsored insurance is looking less lucrative and is about to get even messier. As cuts to Medicaid loom and ACA enrollees are becoming costlier to insure, the future of companies like Oscar, Molina, and Centene, which sank nearly 40% last week, is uncertain. Centene and Molina make the majority of their revenue from federal programs, as you can see in these two charts. And cuts to Medicare and Medicaid will hit the largest health insurer in the country as well.
Figma’s financials revealed. Now that the design software company has filed for an IPO, investors are finally getting a look to see what made Adobe offer $20 billion to try and snap it up. So, is this the classic cash-incinerating disruptive startup? Nope — it’s actually a profit machine. We charted how the firm makes money and what it’s spending it on, as well as the remarkable rise of its high-paying customer base.
The Best Thing We Read Today
The company Puerto Rico hired to run its indebted power plants is collapsing under its own debt
The island’s utility was $9 billion in debt when New Fortress Energy took over operations under its subsidiary, Genera PR, to power a turnaround. But missteps with permits in Puerto Rico and larger issues around delivering on its core liquefied natural gas promises have left it weighed down by its own massive debt load.
What Else We're Snackin'
A new survey found that more Gen Zers over 21 are drinking alcohol — but high schoolers are going the other direction
America’s DIY boom is over. Home Depot is moving on with a $4.3 billion pivot
Here’s what the over $2 billion for AI-related spending in the GOP tax bill would go to
Snack Fact of the Day
This year, the UK experienced its second-warmest June since 1884.
This Week's Events
May consumer credit
May Fed meeting minutes
Earnings expected from Delta, Conagra Brands, and Levi Strauss & Co.
Monthly US federal budget
1 Rick Rieder, BlackRock's Chief Investment Officer of Global Fixed Income, was granted the 2023 Morningstar Award for Investing Excellence: Outstanding Portfolio Manager. https://newsroom.morningstar.com/newsroom/news-archive/press-release-details/2023/Winners-Announced-for-2023-U.S.-Morningstar-Awards-for-Investing-Excellence/default.aspx
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