The issue its splitting parties. Joining strange allies are two big Republican Voters are on different sides. We will explain a political tug ofwar. First, lets get a check on the markets. A mixed dan wall street. The dow industrials up one third of a percent. You can see the s p has just now turned positive. It has been down today. The nasdaq composite is off by a third of a percent. Dollar tree falling following its results in the company says it will close nearly 1000 stores. Most of them Family Dollar locations. More on that, coming up or we start with tesla down 30 your today. Phil lebeau joins us now with more on teslas woes. Phil. Its a lot things that we have been talking about. The industry has been talking about for some time. People are now saying, maybe we should expect tesla to really face Slower Growth over the next couple of years. Or at least in 2024. Really, three things stand out. First of all, the hybrid ice vehicle demand. Ice vehicles, the sales are not growing there. They are so gradually losing their dominance. Its still a nice market. Hybrids are growing in sales. There is ev price war, especially in china we are seeing it worldwide. That brings up the question when comes to tesla, what do we expect for 2024 deliveries . I went back and checked the analysts estimate. Go back to january and most were about to. 17, 2. 18. You look at the fax at estimates thats not the case anymore. Its down closer to 2. 07 million vehicles expected to be delivered this year. They delivered 1. 8 million last year. Meanwhile, the berlin gigafactory which was shut down because of suspected arson nearby, that is once again resuming production. Elon musk is over there today. And then you have the question of the analyst see shares of tesla right now . Web bush out today reiterate omits price target of 315. We will talk to colin lincoln shortly, he and other analysts are saying the writing is on the wall. At least nearterm that the headwinds facing tesla are sizable and they will be continuing throughout 2024. Back to you. We will ask you to stay right there as tesla is getting hit with a big downgrade to underway from equal weight over wells fargo citing numerous headwinds ahead. The firm expects volumes to disappoint and also lowered its price target from 200 a share to 125. Here is analysts who made that call, colin lincoln and phil also on the line. Calling, good to see you. Im curious, what is the market share of tesla in the u. S. Among total automobile sales, auto and truck sales and among ev sales . What kind of share do they have . They are very small in the overall market. They are very large in ev. We are seeing the point of our report today is that we are actually looking at the impact of the price cuts are surprisingly low at this point. We saw i am actually deliver first have to second half globally up just 3 of pricing down 5 . That is really what is driving are lower deliveries. We are expecting is to be about flat this year. We are really expecting more limited ability to cut price, otherwise you hit a point where youre not very profitable anymore. You cut price and hope volume will increase, but you are not seeing the kind of lame increase that is, smart with the price hikes. What about this model two that they expect to bring out in 2025 . Is it going to be a game changer or is it too little, too late here . I mean, i think that was the other part of our report today. We are looking at the potential for model to. One of the things that is really concerning to me is that its different from other lunches. This is a massmarket price suv. Thats going to be very tough to do. Actually, if you go to an internal combustion engine, a compact vehicle today, they are not very profitable. A powertrain youre probably starting off at a losing point. You are really then betting on this unboxed production, which is a new manufacturing methodology they plan on launching with the model two. Its a bit of a wildcard. It has never been done before. Most of those benefits need to come through to get this to levels we are sitting on the card table. What is unboxed production mean . I wasnt sure what it meant. Its a new term. No one has done before. The idea is that its a change in the entire assembly line. From experts we talked to theyre trying to eliminate all the next and automate as much as possible. The vehicle one through one line, it will be assembled at different subcomponents and come together at the end. This enables one of the potential benefits may be sugar but more throughput through the paint shop, which is the bottleneck today. But also, you could probably automate more along the line and illuminate some of the manual inputs. Its supposed to improve your efficiency. What we found in our report is that there is probably between labor and fixed costs that are absorbed of the vehicle, probably 9000 10,000. Car. If you could double that theres like 4000 5000 and benefit. Need most of that benefit to get model 2 profitability, given the powertrain plus you will be adding. Its phil here. Im curious, when you look at all of the headwinds, not just for tesla, but for electric vehicles overall, what you believe is the biggest one right now . Is it the fact that we are seeing of models at the lower price points that would drive sales . Is it the concerns about range adoption or range anxiety, charger anxiety that is out there . What do you think is the number one headway . I think, number one, pricing. I think its just the price. Also for suvs too. Im not sure a small vehicle addresses that for what americans want. People want more affordable ev and its always the charging. The one thing we talk about in the industry and one reason we are cautious, and the detroit three as well are cautious, is the fact that there is still regulations coming. The industry will be a tough spot. The auto makers are going to need to sell more ev to hit those standards, which means everyone is going to be forcing these vehicles into the market, which is never good for profitability when that happens. Im just curious, when they have price cuts is tesla concerned, maybe, phil this might be a question for you, is tesla concerned at all about brand erosion . That whole idea of tesla as a luxury car gets off that if everybody can afford it. I think thats absolutely a problem. With the price cuts the residual impact is the residuals on the car have come down. Thats going to upset your prior customers that lost value in their car, which is one of the biggest cost of ownership, depreciation. And it does impact the brand image tesla if you read what they say, they do sort of want to make ev massmarket available. This is part of their mission, but its a concern to erode profitability if you move luxury to massmarket. Pickups and luxury are probably half of the auto profit landscape, but less than 20 of the vehicles. When youre talking that youre talking a much smaller profit pool. Lets sum it up. You call this a Growth Company with no growth. It has a growth multiple and then some. But not the kind of growth in market share or in unit sales that you would expect from a Growth Company. Well, over the next years i think we have had a point where its slowing down. I think the company itself will admit they are any product low i do think the growth in the next couple of years be flat this year, down next year. Earnings growth will not be good because of the pricing and the Margaret Margaret market progression. This is not a Growth Company, from my perspective. Thank you for sharing your perspective with us. I wanted to ask about another company that you follow. This one rather troubled. Look at boeing. Its got a similar stock trajectory to tesla. Down 30 so far this year. Yeah. The pressure on boeing is far greater, because of the concerns , in terms of manufacturing, investigations a number of problems that is not going to be able to clear up any time soon. Its going to take some time to clear these up. In regards to whats happening with the 737 max, we know there are three investigations, the faa, the doj and the ntsb with regard to the ntsb, the door plug work video, according to a letter sent from the ntsb to senators, which was reported within the last couple of hours, they are looking for the video of the work that was done on a plane in question when it was in the renton factory. And the video, according to the ntsb letter, was overwritten. In other words, its gone. There is that the security cam video to show you who was working on that door plug remember, the ntsb has said august 6th and seventh is the dates when it will be holding door plug hearings. Thats when we are likely to see more questions, likely more revelations, in terms of what the ntsb has learned from its investigation. In terms of the max 9 incident and alaska airlines, this is a story that got a lot of attention late yesterday and early this morning. Alaska saying that yes, the plane was scheduled to have maintenance for the day of the flight. It was doing three flights that day and then was going into maintenance. It was on the second flight when the door plug was blown out. Engineers had noted warning lights. Thats when they said it was time to bring the plane in for some checks. Remember, this plane just started flying in november. That would have been much sooner than normal. Alaskas safety chief, by the way, stands by the decision, in terms of thing we will do these flights and then the maintenance check. I know hindsight is 2020. There will be people who say, look what happened. You should have brought it in sooner. But alaska says, because of the way that they look at incidents or look at potential problems, they felt it was the right decision to continue flying. Look at shares of boeing and keep in mind that the company yesterday said its planning on doing its own internal safety audit this month, in addition to what we saw from the faa as boeing tries to step up its efforts to improve the Quality Controls at the renton plant. You mentioned warning lights on that 737 max. What were the warning lights, did they pertain to the door plug . A couple of times pressurization lights went off or were shown. Remember, i get this question from people and they say wouldnt they immediately have been able to find out that the door plug was missing bolts if they didnt it if they did an inspection . It depends on what they do and what they look at. There have been some reports that you could have seen a shifting of the door plug from the outside. Clearly, if they were doing a maintenance check that would have seen that if there was a shift in the door and it wasnt flush with the rest of the fuselage. From the inside, keep in mind, you dont see the fuselage. Its not like you can walk in and say, well, theres no bolts here. You have to take off that panel to do those inspections. And whether or not they would have caught that in a maintenance check, that remains to be seen. The pressurization lights is one of the reasons they said, okay, lets bring this in and do a check. . What about this terrifying story, i think it was on a 787, it could have been a 777 that was circulating yesterday . A plane and ominously began a nosedive. The pilot couldnt control it and then it came back on. This is another boeing point thing. They are doing an investigation there. That brings up the question whether or not the software had been restarted regularly. That is purely conjecture regarding that software. So, the investigation will determine exactly what happened with that flight. That was a flight going, i believe, from australia to auckland, new zealand, when the incident took place. Thank you very much. Appreciate it. Coming up, the nvidia ecosystem is growing and benefiting both public and private companies. Details intech check. We had to a quick break and a quick power check on the Positive Side of the big board. Freeport mac moran on the positive. Dollar tree in the negative, shutting down stores. We will be right back. Theyre waiting for you. Hey, do you have a second . Theyre all expecting more. More efficiency. More benefits. More growth. When you realize you can give your people everything, and more. Thank you very much. [applause] ask, now what . Heres what. You go with prudential to protect, empower and grow. With everything you need to deliver, you guessed it. More. One more thing. Whos your rock . Learn more at prudential. Com business. Whos your rock . Its not a ninetofive proposition. Its all day and into the night. Its all the things that keep this world turning. Its the gotos that keep us going. The places we cheer. Trust. Hang out. And check in. They all choose the advanced Network Solutions and round the clock partnership from comcast business. Powering more businesses than anyone. Powering possibilities. When i was your age, we never had anything like this. What . Wifi . Wifi that works all over the house, even the basement. The basement. So i can finally throw that party. And invite shannon barnes. Dream do come true. Xfinity gives you reliable wifi with walltowall coverage on all your devices, even when everyone is online. Maybe well even get married one day. I wonder what i will be doing . Probably still living here with mom and dad. Fast reliable speeds right where you need them. Thats walltowall wifi on the xfinity 10g network. The nvidia halo has been crowning winners in the Public Markets, including tip manufacturer arm. That has been reaching the private markets too, spurring new unicorns. Here is the story for todays tech tech. Another day, another newly minted unicorn in that gene a. I. Space. Together a. I. Just announcing more than 100 million round, more than 1 billion valuation. The video halo effect does go beyond Public Markets and into the private markets where vcs operate a new Company Serving bill. Policy nvidia venture ecosystem and its developing around access to gpus, laying on efficiency entities to build a consumer models that we know. Some of the ones like chatgpt and character a. I. Its rapidly expanding and leading to talk about bubble, which has been around here in these parts in the bay area for some time now. Together a. I. , for example, doubled its valuation in less than six months. There are other startups that have raised hundreds of millions of dollars. 1 billion plus evaluation with little to no revenue. For now at least as and video thrives so does this in ecosystem. That will be on full display next week at dtc, which some are calling the woodstock of a. I. Or the new wwdc, thats apples big event, one of the biggest events intech over the last 10 years. Anyone who is anyone in the tech space will be there. We will hear from open a. I. , anthropic, x a. I. , cohere, character a. I. , many, many more. Its clear that dtc is now about so much more than just nvidia gp. Its about that ecosystem both public and private that nvidia has helped to create. Lets just say if its the talk of a. I. Lets hope they have bathrooms. Just a thought there. Thank you very much. I want to rebrand myself as tyler a. I. I think thats a good idea. Anything with a. I. Works well. It just works. You could probably do that using some of the products right now. At a new headshot to go along with it. A new headshot. Tyler a. I. The house passing a bill that could lead to a ban of tik tok despite nearly being a unanimous issue republicans are now finding himself scott in the midst of an internal struggle is two major major gop donors take up opposite sides of the issue and threatened pull donations. That story iahd. S ea rylee from rylees realty hi this listing sounds incredible. Lets check it out. Says here it gets plenty of light. And this must be the ocean view . Of aruba . Huh. This listing is misleading. Well, when at t says we give businesses get our best deal, on the iphone 15 pro made with titanium. We mean it. Amazing. All my agents want it. Says here. inviting pool. Come on over too inviting. Only at t gives businesses our best deals on any iphone. Get iphone 15 pro on us. circle welcome back to power lunch. Bond yields rising today as the markets do with impatient, which is moderating. But not back to the fence to present target. Rick santelli joins us from chicago. Indeed, that word moderating certainly seemed to get many traders aside yesterday, because deals were yields reversed higher. Lets start at the beginning. 30 year bond option, the last of 117 billion in coupon supply in todays reopen, 22,000,000,030 years what the bestofbreed. If you look at the chart you can clearly see at one caucasian at the results of the auction hitting the wires Interest Rates fell. But they didnt last long. If you look at twos, tens and 30s on one chart, we are steer casing, which means all maturities, twos through 30s, our trading or have traded at a higher yield than yesterday, or a lower price than yesterday. That, of course, is building on a reversal. If you look at a chart starting in early february what you will see on twos and tens is that basically each of those maturities last friday was hovering either at or slightly above a onemonth low yield clothes. Boy, have we reversed. Consider this, the high yield clothes for 2024 four twos is for 72. For tens 432. You can see we are starting to be closer. Twos are getting closer faster. Thats results of yesterdays cpi. Tomorrow we have not only retail sales, not only continuing claims, but we have the cousin to cpi, wholesale former Producer Price index. Lets see if tomorrow also gives the markets a little bit of a jolt, because everybody is a pretty pacified with regard to inflation, except for the inflation numbers. Tyler, back to you. Thank you very much. For months proper breaking out. Best day since 2022. Copper. It has been a while since we hit copper. We have not hit copper in a while. Today its at an 11 month high best day since november of 2022. That comes after chinese smelters reportedly are cutting their output, so that can tighten the markets, since they are then turning less. China is a big deal in terms of the smelters. If they cut their output, collectively cut it, we could see prices go back up. We have this chart from bt i. D. , which says its a significant breakout on copper. You can see that range we are talking about. Now getting out of that resistance level. On the fundamental side Td Securities said things look pretty good for some time. But that the commodity price just hasnt been reflecting that but if we look longerterm on the futures curb it does point to this tightening fundamental landscape. That is pushing up the copper miners today. The cto x, which tracks the space there, there it is, up about 6. 3 . In terms of individual movers, weve got freeport, southern copper, and glenn court on the move there. Southern copper up 11 . Natalie gray from stone next told me that she thinks todays move is just a kneejerk reaction and that its great of chinese smelters say theyre going to