Good morning. A lot of things happened in the last 24 hours … and, for the moment at least, investors are liking what they’ve heard. To begin, the president announced that Fed Chairman Powell’s job was “safe” … just one day after broadcasting that his “termination can’t come fast enough.” It is unclear if this was just a change of heart or clarity over what he meant … but many feel the president realized the negative market effect the attempted removal (not to mention a court battle) that could result. And then there are the tariffs … as Treasury Secretary Bessent announced that “the tariff standoff with China is unsustainable.” While the market rejoiced … some did have a bit of an issue as explained below. In our industry, material information must be disseminated to all investors simultaneously and anything that can “move markets” is considered “MNPI” (Material Non-Public Information). To do otherwise … to use an economic term … is a “no-no.” Yesterday’s announcement certainly straddled the line, in the opinion of some, as the comment was made in a closed-door private investor session with JP Morgan … allowing (again, according to some) action to be taken before hitting the Bloomberg wires … and markets rose immediately following. But just like an announcement for a product selling on QVC “there’s more!” And that is the Elon Musk situation. Last night Tesla reported results that showed a sharp decline in sales, which many attributed to the CEO’s work on “DOGE.” And overnight, investors cheered when hearing Elon is stepping back and re-focusing on Tesla. But there are some issues that remain, in my view. To begin, the announcement was that he would limit himself to “one or two days a week” … and just one or two Musk statements could find renewed dissatisfaction among potential buyers. A second issue … remembering this is just opinion … is some early adopters sold their Teslas out of disappointment … and it is unclear if what was once thought of as absolute love, can be re-earned. And there is even a third wrinkle … as present and potential Tesla owners tried out alternatives (aka. “substitute goods”), and one thing a market share leader wants to do is keep those interested away from the competition. So, will one announcement appease Tesla investors? For today, it seems that way. But only time will tell. Okay, I’m hopping off my soapbox. One other bit of interesting news is the possible removal of food dyes in many items. I did some searching this morning … for one “colorful” food that immediately comes to mind is Trix cereal, due to the amazing colors. What I read was a few years ago, General Mills changed the formula to use “natural” colorings … but after customer complaints, re-introduced the fake stuff. It seems without the bright neon glow (a phrase taken from a Washington Post article) sales declined. Is food coloring dangerous? The jury is certainly out … but there is even one famous song about adding color to food, sung by none other than Johnny Cash who claimed … he shot a man in Reno … … just to watch him dye. Have a great day, Joseph G. Witthohn, CFA Have any questions? Please contact info@teamemerald.com
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