🤔 What if Elon is... wrong?

Backtracking at its finest | RIP European dealmaking | [TOGETHER WITH]( Hi {NAME}, here's what you need to know for June 24th in 3:07 minutes. 🧸 How do you navigate a bear market? By using options, of course. And how do you navigate a bear market using options? By joining Tastytrade founder Tom Sosnoff for [Navigating A Bear Market Using Options]( on June 24th, of course. [Get your ticket here]( Today's big stories - Reports suggest China is about to give its carmakers a boost - Elon Musk said he thinks there's a recession coming, but here's why he might be wrong – [Read Now]( - Major mergers and acquisitions across Europe are suddenly at risk Hot Wheels [Hot Wheels] What’s Going On Here? The Chinese government is [reportedly]( set to roll out measures to boost spending on the country’s car industry by $30 billion this year. What Does This Mean? Car sales in China – the world’s biggest auto market – have tailed off in the last few months, given that it’s both difficult and irrelevant to buy a car when you’re trapped in lockdown. In fact, there wasn’t a single person among Shanghai’s 25 million-strong population who bought one in April. And with the government now withdrawing subsidies designed to encourage drivers to buy EVs, demand could slide even more. But while the authorities taketh with one hand, they giveth with the other: state TV reported this week that the government is thinking about extending tax exemptions for EV buyers. That bodes well for the likes of Li Auto, Xpeng, Nio, and BYD, all of which saw their shares rise after the news. Why Should I Care? Zooming in: It’s BMW’s time to shine. BMW will be pleased to hear it: the German carmaker – whose Chinese sales fell in the first quarter from the same time in 2021 – [announced]( on Thursday that production is now underway at its new $2.2 billion plant, which it’s hoping will increase its annual EV output in China by nearly 20% ([tweet this](). The plant is BMW’s third assembly facility in the country, and it’s been designed to produce only enough EVs to meet demand, rather than the mass production lines of old. The bigger picture: Self-inflicted wounds. China’s lockdowns might’ve done a number on its economy, but there could be an even bigger risk to the country in the form of its languishing property market. The sector represents around 20% of the country’s output, and it’s been left in tatters by the government’s tough stance on the sector. In fact, Goldman Sachs is expecting the sector to drag economic growth down by 1.4 percentage points this year. You might also like: [How to profit from the Chinese property market’s next steps.]( Copy to share story: [( 🙋 [Ask a question](mailto:questions@finimize.com?body=Ask us a question: Where are you writing from? Let us know and we'll mention it when we reply.&noapp=true&subject=Hot Wheels&utm_campaign=daily-global-24-06-2022&utm_source=email) Analyst Take What If Elon And Goldman Sachs Are Wrong? [What If Elon And Goldman Sachs Are Wrong?]( [Photo of Carl Hazeley] Carl Hazeley, Analyst [Elon Musk]( has been saying things out loud again. But this time it’s not about Twitter or his employees’ remote working habits: he [said]( this week that he thinks a US recession is probably on the cards in the near term. He’s not alone, with Goldman Sachs having just [updated its forecast]( to show that a recession is more likely to happen in the next two years. Plenty of economists share that view, in fact. But here’s the thing: there are [three compelling reasons they might all be wrong](. That’s today’s Insight: [why a recession might not happen at all](. [Read or listen to the Insight here]( SPONSORED BY CHANGE INVEST Break free of fees There’s nothing worse than spending a chunk of your hard-earned cash on hidden fees. That’s why [Change]( lets you [trade bitcoin]( with zero fees and [buy stocks*]( without any commission. Heck, you can even buy fractions of gold without hefty fees. Your new investments won’t be locked away when you buy them, either: you can use your [Change Investor Visa Card]( to pay with crypto, euros, or gold at over [40 million stores]( around the world. And now’s the right time to try [Change](: you’ll be able to protect your savings from inflation with passive-earning opportunities – like Growth Pocket, the free-for-all feature that puts your euros to work. You can start now from just €10: [join over 100,000 Changemakers today](. [Check Out Change]( Stocks* is a derivative product offered by Change Securities B.V. that replicates the performance of your favourite companies’ shares – full or fractional. Domino Effect [Domino Effect] What’s Going On Here? Analysis out on Thursday [showed]( that at least $25 billion worth of deals in Europe are at risk of collapsing. What Does This Mean? After more than a decade of willy-nilly lending, banks are suddenly becoming less willing to stump up for major mergers and acquisitions. Even the biggest banks are casting a sidelong glance at the choppy markets and slashing the value of the loans they give out, nervous that they won’t be able to sell that debt on to investors like they normally would. They’re right to be cautious: the banks that lent Clayton, Dubilier & Rice $8 billion to help buy UK supermarket chain Morrisons have struggled to pass on that debt in the form of bonds. That’s got investors worried that other deals – including the mooted $6 billion-plus buyout of British drugstore chain Boots – might not be able to get the financing they need. Why Should I Care? Zooming in: Plan B. Buyers that want to go ahead with deals do have a couple of other options, mind you. The first is to fund a higher proportion of the deal by offering up stock as payment. The second is to seek out alternative ways to borrow: banks’ reluctance to lend has opened the door to private debt firms that have amassed more than $1 trillion to help fill the gap – albeit at higher rates of interest. For markets: Brexit strikes again. It’s not just dealmaking that the UK is struggling with: the share of British IPOs compared to those in Europe has been shrinking since the country voted for Brexit in 2016. A series of high-profile flops over the past two years certainly hasn't helped, with the likes of Deliveroo, Wise, and THG all down more than 60% since listing. The country’s post-Brexit ambition to boost its standing as a global financial center has been going well, then. You might also like: [How to make sure dealmaking’s decline doesn’t affect you.]( Copy to share story: [( 🙋 [Ask a question](mailto:questions@finimize.com?body=Ask us a question: Where are you writing from? Let us know and we'll mention it when we reply.&noapp=true&subject=Domino Effect&utm_campaign=daily-global-24-06-2022&utm_source=email) 💬 Quote of the day “The only time to buy these is on a day with no ‘y’ in it.” – Warren Buffett (an American business magnate, investor, and philanthropist) [Tweet this]( 🤝 Work with us If your business shares our goal of changing the world of finance for the better, there’s no better place to showcase your mojo than this [spot in our daily newsletter](. You’ll get your message out to more than one million engaged investors, and speak directly to the very people who can help [take your business to the next level](. Interested? 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