🤷♂️What’s been interesting over the course of the last 30 days or so (since Jackson Hole) has been this global shift towards reducing rates.
🤷♂️The latest is the Bank of Canada, which cut rates by 50 bps amid a declining labour market indicators.
✅Denmark- 3.25% -> 3.00%
✅China- 3.35% -> 3.10%
✅ECB- 3.65% -> 3.40%
✅New Zealand- 5.25% -> 4.75%
✅Swiss – 1.25% -> 1.00%
✅USA – 5.50% -> 5.00%
🤷♂️What’s breaking in the global economy, that we are missing?
✅IMF downgrades global growth forecasts 🤷♂️highlighting interconnected global economic challenges. The possibility of these global cuts being associated something breaking on the international level is becoming highly probable.
🤷♂️Central banks worldwide are responding to common macroeconomic pressures, illustrating that national policies are often influenced by global economic conditions rather than local factors alone. The US is the perfect example of this, everything on the surface in terms of US economic indicators did not necessitate a 50bps cut, however we got one.
🤷♂️Rate cuts are seen as a primary tool to combat economic slowdown and bolster demand. However historical data suggests that rate cuts may not significantly stimulate the economy quickly enough, raising concerns about their effectiveness in the current environment of slowing growth and labor market issues. This can be seen with $QQQs which topped out at July 10th.
🤷♂️Tech generally booms in a risk on environment, and the fact that $SPY has been hitting all time highs while tech hasn’t recovered suggest the market isn’t fully pricing in a risk on regime.
🤷♂️Labor market weakness, particularly among youth, are leading to reduced consumer spending and economic contraction. Younger demographics typically spend a greater share of their income on consumption. This trend can seen in various developed countries.
🛑Concerns are growing over the potential for deeper economic downturns beyond “Goldilocks” scenarios of a soft landing.
🤷♂️What does this all mean? Are we in a recession and don’t know? Who knows, as of right now, what we can say is that central banks are hastily moving towards stimulating the economy whether this will succeed is anyone’s guess.
🤷♂️A measured approach may be best for now, until a clearer path emerges.
-
Market Analysis
-
Tesla Robotaxi Event
✅Elon Musk arrives to center stage in Cybercab.
✅”We have 20 Cybercabs”
✅”We have 50 autonomous cars here.”
✅Model Ys and Cybercabs.
✅Cybercabs have No steering wheel or pedals.
✅Aims is to make unsupervised FSD better than supervised FSD.
✅”It’ll save lives.”
✅”$1 per mile in transit down to, over time, 20c per mile.”
✅”You’ll be able to buy one.”🤷♂️Available to public not just a tesla run service. Does that mean Cybercab will be sold to public or will M3 or MY be allowed on the service not clear on that.
✅Will cost below $30k.
✅Unsupervised FSD in Texas and CA in 2025. 🤷♂️M3 or MY or Cybercab??
✅Cybercab in production before 2027.
✅Well before that, you’ll experience a robotic taxi via the model 3 and Model Y.
✅”Your 3 and Y will achieve unsupervised FSD… where regulators approve it.”
✅AI 5 computer will be in the Cybercab. The computer will be over spec’d. 🤷♂️What does that mean for the current feet of vehicles wanting to join the robotaxi network?
✅Potential for distributed inference compute (distributed computing), when vehicle is not operational (on standby).
✅Event is setup to feel like a theme park ride. 🤷♂️Does mean the vehicles are in some sort of demo loop and not using autonomous driving.
✅Cybercab will have inductive charging no plug. 🤷♂️What does this mean for inductive power factor losses. Have they developed something new? Existing inductive charging methods have an efficiency of 60-70% (30-40% losses).
✅Tesla Robovan, announced (20 person carrier can be converted to cargo hauler)🤷♂️Robovan biggest unexpected announcement of the event.
✅$20-30k for Optimus robot in future. “It will be cheaper than a car”
✅Optimus showed off in public walking amongst crowds freely, dancing and serving drinks. 🤷♂️ Multiple optimus robots walking amongst the crowds is most underrated aspect of the event.
✅Robovan maybe single unit prototype (its been roped off).
🤷♂️Biggest question of the night is the cheap $20,000 mass market car dead? If so, future short term growth prospects are now tied to the existing product line and a PEG ratio of 6.49 for the next 12 months is extremely high.🔗SOURCE: Tesla Forecast
-
Market News
CPI
✅US September CPI 2.4% y/y versus 2.3% expected.
✅Each CPI category 0.1% higher than expected.
✅Core CPI +3.3% vs +3.2% expected.
✅Core CPI m/m +0.3% vs +0.2% expected.
✅Core services ex shelter +0.554% vs +0.239% prior.
✅Core-CPI services ex-rent/OER +0.404% vs +0.328% prior.
✅Driven by airfares, medical care, transportation, and auto insurance.