October 3, 2023

Tesla Deliveries Slide Amid Factory Closures

📰 News Organizations

  • Tesla Deliveries Slide as Factory Closures Slow Production. For the first time in more than a year, global deliveries to customers fell quarter-over-quarter by 6.7% to 435,059 vehicles, due to planned factory downtime.

  • Buoyant Dollar Within Striking Distance of 150 Yen. The dollar continued ascending Monday due to prospects of U.S. interest rates staying higher for longer, and the yen's slide to a near one-year low put traders on watch for intervention by Japanese authorities.

  • Rivian Reports Record EV Deliveries for Third Quarter. Rivian reported record third-quarter electric vehicle deliveries and said it remains on track to produce 52,000 EVs in 2023. The company produced 16,304 vehicles during the third quarter.

  • Kellogg's Cereal Business Begins Trading As Standalone Company. WK Kellogg began trading on the New York Stock Exchange. As part of the separation, Kellogg has been renamed Kellanova but is still trading under the ticker “K.”

  • UAW Strike Hurts Demand for Steel. Steelmakers Nucor and Steel Dynamics in September forecast third-quarter profit would decline because of lower steel prices. The spot market price for coiled sheet steel slipped about 3% since the strike started Sept. 15.

  • Blackstone’s $67 Billion Real Estate Fund Sees Withdrawal Requests Decline. In September, investors sought to pull out $2.1 billion, or 28% less than what they requested to withdraw in August. Withdrawal requests were the lowest since October 2022.

🐦 Twitter

  • Personal interest payments are climbing rapidly as share of personal income. 4.2% share not extreme relative to history, but in upper end of range and now back to where it was in mid-2008. Source.

  • The US Bond Market has now been in a drawdown for 38 months, by far the longest bond bear market in history. Source.

  • The recent collapse in Treasuries is yet to impact equity markets that continue to defy gravity at historically inflated valuations, particularly the big tech companies. Source.

  • The Fed is losing $723 million per day paying commercial banks for reverse repos and interest on reserves. Source.

  • Nearly 1,500 small businesses filed for Subchapter V bankruptcy this year through Sept. 28, nearly as many as in all of 2022. Some 73% of small businesses reported that rising interest rates were having a negative impact on their business. Source.

  • The market’s positive returns remain highly concentrated in a handful of stocks. After a year, the rally has not broadened out. The small-cap Russell 2000 is up 1.35% YTD. The Russell micro-cap, the bottom 1000 stocks of the Russell 2000, is down 6.80% YTD. Source.

Shutdowns are bond-bullish. They reduce government spending and therefore future borrowing (if they last long enough) and potentially put the economy at risk.

Jim Bianco

📓 Online Publications

  • Apartment Market Hits Construction Lull. Apartment building starts fell to a seasonally adjusted annual rate of 334,000 units in August, marking a 41% decline from the pace seen the same month a year prior.

  • ISM® Manufacturing Index Increased To 49.0% In September. The overall economy expanded weakly after nine months of contraction following a 30-month period of expansion. This suggests manufacturing contracted in September. 

  • Micron Expects Record Memory Chip Industry Sales By 2025. Chip inventories for consumer electronics will need to normalize for memory sales to improve, and this should start to kick in by early 2024, and data center AI servers need lots more memory chips.

  • Earnings Have Kept Pace With Price Hikes Since The Start Of The Pandemic. While the average household has experienced an increase of 33% in net worth since the start of 2020, the bottom 50% is up nearly 75%. Wages have gone up too.

🎧 Podcasts

  • US Lawmakers Pass Short-Term Deal To Avoid Government Shutdown. Over the weekend, US lawmakers voted to fund the government for at least the next few weeks. The last-minute agreement avoids a costly government shutdown. Source(1:37)

  • Cooling UK Labor Market Claims Jobs In Construction And Retail. As rates have risen, many building projects have been put on hold and that’s forcing some brickmakers to cut jobs. The construction sector is bearing the brunt of a wider labor market slowdown in the UK. Source(8:42)

  • Actors Guild Resumes Negotiations. The Actors Guild is back in negotiations with studios, inspired by the recent writers' strike resolution. SAG-AFTRA seeks a new residual model for streaming, better pay, and increased protections against exploitation. Source(7:34)

  • Autoworkers Strike Expands Further. The autoworkers strike is broadening its reach to encompass all Stellantis and GM parts distribution centers, and one SUV plant each from GM and Ford. The total number of striking autoworkers rose to 25,300 out of a potential 146,000. Source(9:20)