🇨🇳 Tesla's FSD in China

Investors are getting hyped about Tesla’s potential FSD in China. April 30, 2024 | Peel #699 Silver Banana goes to... [FinanceBuzz. ](20Street%20Oasis///) In this issue of the Peel: - 🤯 Nobody in their right mind is expecting any rate cuts this year. - 🚦 Investors are getting hyped about Tesla’s potential FSD in China. - 🔈 Will the Paramount deal actually close? Place your bets now. Market Snapshot 📸 Banana Bits 🍌 - Get hyped—IPO and M&A markets should continue to improve, [according to Morgan Stanley](=) - Our older-than-boomer lawmakers finally heard about investment firms buying up houses, and they’re going [full “get off](=)[their](=)[lawn”](=) - Now, we can’t even tell if high rates are [doing their job](=)… just don’t tell that to SVB - Technology fund flows are seeing [more action thanks to Drake’s DMs]() These cannabis gummies keep selling out in 2023 20Street%20Oasis/// If you've ever struggled to enjoy cannabis due to the harshness of smoking or vaping, you're not alone. That’s why these new cannabis gummies caught our eye. Mood is an online dispensary that has invented a “joint within a gummy” that’s extremely potent yet federally-legal. Their gummies are formulated to tap into the human body’s endocannabinoid system. Although this system was discovered in the 1990’s, farmers and scientists at Mood were among the first to figure out how to tap into it with cannabis gummies. Just 1 of their rapid onset THC gummies can get you feeling right within 5 minutes! [Order Now](20Street%20Oasis///) Macro Monkey Says 🐒 Goods Doing Bad Back in 2012, you could look at the guys on the New England Patriots and say, “Yeah, this seems like a group of stand-up gentlemen.” In saying that, you technically would be correct… even though soon-to-be convicted murderer Aaron Hernandez was on that team. One bad apple can ruin a bunch, but it doesn’t mean they ruin every other individual apple within that bunch. The same is true for inflation. One bad line item can push up a CPI or a PCE report even though things are otherwise going well. And just like Aaron Hernandez, we all want high inflation to be gone forever. The Numbers Yesterday, we discussed the latest PCE report, which suggested that inflation both increased over the past few months and surpassed economist guesstimates. The scary part about March’s inflation data is the gradual uptick we’ve seen in headline PCE (dark blue line) so far in 2024. But, when we really get into the weeds, we can see the story is slightly more complicated. The first thing to notice is that despite the uptick in headline inflation, core inflation has kept its trajectory. Intuitively, this means the increase in headline inflation must be coming from food and energy costs excluded from the Core reading. In March, the data suggests that a combination of gasoline, apparel, shelter, and transportation services are responsible for a large majority of the continued inflation we’re seeing right now. This is both good news and bad news. The bad part is that inflation is still hanging around, but the good news is that it’s in the “right” places. [Source]( Stealing more charts from certified smarty pants Torsten Sløk at Apollo, we can see that inflationary pressures are largely concentrated in goods as opposed to services. Now, services like insurance and the sh*t we sell are still seeing high inflation, but… According to Statista and Focus Economics, 77.6% of U.S. GDP is tied to services. That means the vast majority of the U.S. economy is not experiencing similarly high inflation. Now, the above chart tells us that prices tied to manufacturing are expected to see an increase in the next few months. Some of that is seasonal, but the overarching point is that 1) inflationary pressures remain and 2) it’s (mostly) concentrated in goods. According to Sløk, rising commodity prices combined with a rebounding manufacturing sector is exactly the recipe an economy needs to raise a wave of goods inflation. The Takeaway? This is exactly why we can’t have nice things in macro, investing, and finance in general. Even when conditions are starting to improve, there’s always something on the horizon to worry about. [Source](=) Having an additional day to digest Friday’s inflation data didn’t help at all. Nobody in their right mind is expecting any rate cuts this year, barring an intense slowdown in economic activity. The data observed in the March CPI and PCE reports combined with observations from outside experts suggests inflation still has a long way to go to reach that 2% holy grail. But going further, if we factor in historical data, U.S. inflation exists at an average of 3.54% since 1948—which is actually slightly above the rate we’ve seen in recent months. Obviously, the further back we go, the higher the inflation rate should be. But, even since 1990, average inflation in the U.S. has sat at 2.7%, which also happens to be the exact same headline PCE reading we got in March. It’s volatile, and the mainstream media is going to shove high inflation down our throats for as long as they can, but to quote a great player from my least favorite basketball team of all time, it seems like we just gotta “trust the process.” Then, hopefully, this sh*t really can be “gone forever.” What's Ripe 🤩 Tesla (TSLA) 📈15.3% - Tesla just got called up to the majors. And by the majors, we, of course, mean China. The firm just got the green light (no pun intended) from the CCP. - Elon woke up in Beijing this morning and went to bed with clearance from Chinese Premier Li Qiang that Tesla cars pass data clearance tests. - To investors, this means that China does, in fact, like Tesla back. Shareholders then got fired up on the potential for FSD in the world’s 2nd largest economy. Baidu (BIDU) 📈5.6% - But, the hopes of Tesla FSD in China weren’t borne out of unjustified hope, which is surprising for Tesla investors. - At the same time, Elon struck a deal with China’s “Google” Baidu to provide mapping and navigation data to the U.S.-based automaker. - Thanks, Elon, for the further proof of our take yesterday that doing drugs is good for you. The noted Ketamine user is making deals on both sides of the Pacific. What's Rotten 🤮 AMC Entertainment (AMC) 📉11.1% - Wow, who could’ve seen this coming? Shares in this dogs*t nothing company with comfy chairs tanked on preliminary earnings data. - AMC warned “investors” that profits may be lower than expected on a weak Q1 box office slate. After the disappointment I got from Civil War, I can see why. - But, AMC sought to blame the 2023 writer’s strike and its continued effects for lack of content. So, we’ll see if they can turn that around later this year… SoFi Technologies (SOFI) 📉10.5% - Embarrassing the Jamie Dimon’s of the world, SoFi danced over expectations last quarter with 37% revenue growth and a beat across the board. - But, shares plummeted as a result thanks to slightly lower than expected guidance for Q2, expecting only $560mn in revenue vs the $580mn expected. - Still, SoFi saw both its financial services and tech platform grow solidly for the quarter. Plus, they even expect to actually make money in 2024. Thought Banana 🤔 The Problem with Parents… and Paramount What would you do if—all of the sudden—you were the sole controller of the company that held a majority stake in one of the largest media companies in the country? Paramount Global has seen volatility in its past. But lately, this stock has seen as much turbulence as your average door-losing Boeing flight, leaving a lot of questions for investors, employees, and Paramount+ subscribers. But, according to reports, the firm is closer to figuring itself out. Paramount’s chair and controlling shareholder, Shari Redstone, is moving closer to a deal. What’s Happening? Redstone first took control of Paramount and parent company National Amusements in 2019, shortly before her father and “founder” of Paramount, Viacom, CBS, National Amusements, and probably a few more I couldn’t find passed away in 2020. As we can see above, it’s been a few volatile years since then. But a few weeks ago, the volatility meter turned up a notch as the remaining Redstone looked to sell her controlling stake in the firm. Over the weekend, things only heated up more as long-time Paramount employee and the firm’s only CEO since its 2019 merger with ViacomCBS officially “stepped down” from his position just yesterday. Who Cares? Bakish is the opposite of Succession’s Logan Roy. The anti-limelight character, who actually seems like he loves his kids was a vocal opponent of Redstone’s highly-covered potential deal to get acquired by Skydance media. The problem is that Redstone’s proposed deal with Skydance would give her and other upper-tier shareholders a fat premium while diluting the sh*t out of common class B shareholders like any of you reading this who own shares in $PARA. As a result, it’s likely that Bakish was stalling or otherwise interrupting the now-exclusive merger talks with Skydance. Given that Skydance’s 30-day exclusivity period ends on May 3rd, this may be an attempt to finalize. The Takeaway? The Skydance deal would be completed in an all-stock transaction that would give David Ellison, current CEO of Skydance, the Iron Throne of Paramount Global. Funding would be coming from KKR and Redbird Capital. Media companies always derive outsized levels of attention for their corporate drama, largely thanks to Succession but also thanks to these firm’s reputations as the cool kids of the corporate world. Regardless of Bakish’s exit, this potential deal should be making moves by Friday, so expect a hectic week for the stock. Place your bets now on how this thing works out. 💭 The Big Question 💭: Will Redstone and Skydance ultimately complete their deal? Is this a symptom of media consolidation or wanting out? How will this affect American’s ability to watch Premier League soccer? Banana Brain Teaser 💡 Previous 🗓 Kevin invested $8,000 for one year at a simple annual interest rate of 6 percent and invested $10,000 for one year at an annual interest rate of 8 percent compounded semiannually. What is the total amount of interest that Kevin earned on the two investments? Answer: $1,296 Today 🕐 In a certain fraction, the denominator is 16 greater than the numerator. If the fraction is equivalent to 80 percent, what is the denominator of the fraction? Send your guesses to vyomesh@wallstreetoasis.com Wise Investor Says 🤓 “Next to doing the right thing, the most important thing is to let people know you are doing the right thing.” — John D. Rockefeller How Would You Rate Today's Peel? 😁[All the bananas]() 😐[Meh]() 😩[Rotten AF]() Happy Investing, David, Vyom, Jasper & Patrick [ADVERTISE]( // [WSO ALPHA](=) // [ACADEMY]( // [COURSES]( // [LEGAL]( [Unsubscribe]( IB Oasis Corp. 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