🚙 Tesla loses billions

Together with Bonner Private Wines

Good morning investors! Important economic data is now out to debate over and more companies are set to report earnings, yet investors are still busy digesting Boeing and Tesla-related news.

Today we cover:

• US GDP data surprises. 🇺🇸 

• Tesla loses billions. 🚘

• Giving money to your adult kids. 💵 

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📊 Economy and News 

US GDP comes with a surprise

The US economy grew at a 3.3% annualized rate during the final quarter of 2023, exceeding expectations and proving the economy is as resilient as ever.

This is higher than the expected figure of 2%. The country has locked in full-year growth at 2.5%.

Consumer and government spending played a very important role in keeping the number high. Moreover, inflation also appears to be progressing downward.

The annual core PCE price index jumped by about 2.7% YoY, nearly half from 5.9% reported a year ago.

The reaction: Surprisingly markets showed only a modest reaction to the report. Stock futures gained slightly while Treasury yields moved lower.

The market expects a rate cut in May, though the CME Group’s FedWatch gauge put the odds of a March cut at 47.4%.

The future: Analysts expect spending to be less robust this year, but there is little to no risk of a recession now that the economy is once again growing. However, the global tension and elections in the country could have a major impact on the economy.

Jobs: Initial jobless claims jumped up by 25,000 to reach 214,000, marking its highest level in a month.

Global hits:

• Apple gains top spot in China smartphone market for 1st time in 2023.

• Apple announces sweeping changes for apps in Europe, including allowing third-party app stores for the first time.

• Fidelity fund again trims Elon Musk’s X valuation.

📈 Stocks

S&P 500 4,894.16 (+0.53%)
DJIA 38,049.13 (+0.64%)
NASDAQ 17,516.99 (+0.10%)
BRENT CRUDE 82.08 (-0.42%)
* Prices as of Jan 26th, 12:20 AM UTC

Telsa is now poorer

Yesterday was a very bad day for Tesla that lost over $80 billion in market value after the poor earnings report. It’s down $210 billion since the start of the year and closed at its lowest level since December 2022.

The stock fell -12.13% to close at $182.63, now down over 25% since the beginning of the year. This was the company’s worst day in over three years.

China is a threat: Musk told analysts on the Wednesday call that Chinese carmakers were “the most competitive car companies in the world” and “will have significant success outside of China.”

Tesla has already cut prices several times due to increasing competition and based on the latest report, more price cuts can cause havoc for the company, yet some are expected this year.

Rising competition from Chinese automakers has sparked an anti-dumping investigation by Europe, which could result in higher tariffs on Chinese car imports.

Dumping refers to the practice of exporting goods to a country at prices that do not reflect their cost.

Not all is lost: There is still hope and some analysts see the stock to double in the next two years. However, most agree that 2024 will be a difficult year for the company.

A lot depends on the new lower-cost vehicle expected to come out in the next few years. Plus, lower interest rates can also boost sales since consumers tend to buy their vehicles on finance.

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The grapes used to make these wines are grown at an altitude of 6,000-9,000 ft in elevation deep within the Andes Mountain.

Some of the rarest, and finest: They’re made in such small quantities, that most won’t make it to the US. But wine lover and adventurer Will Bonner has made it his mission to import unique, small-batch wines that other importers overlook.

And he’s sharing them through the Bonner Private Wine Partnership — which sends you three bottles of unique, small-batch wine every two months. Straight to your door.

• Rich, complex flavor: Taste the trademark high-altitude flavor, with notes of blackberry, smoke and plum. 

• Packed with antioxidants: These wines have 10x levels of resveratrol, high levels of flavonoids and 93% less sugar. 

Get a complimentary mystery bottle of small-batch, limited production wine from their cellar when you join the Extreme Altitude Club.

💵 Personal Finance

Americans are supporting adult kids

About 65% of parents with a child age 18 or over provide them with at least some financial support, according to a recent report.

Of those who support their over-age-22 offspring, the average monthly amount is $718. This is a huge amount of money and many parents have to dig into their retirement savings to be able to fund their child’s lifestyle.

In fact, about 33% of parents who support their adult children say it puts them under financial strain.

Most parents in the US believe that they should not 'have to spend money’ on their children after 24. Yet, they have no option but to offer financial support and nearly 43% of parents who continue to support their children in adulthood say the support is offered with no contingencies.

What to do? We understand it might not be easy to say ‘no’ to your kids. Here are a few things you can do to reduce the burden and ensure you continue to have a strong financial standing despite additional burden:

• Make sure to include this financial support in your budget as an expense.

• Keep an eye on your retirement account. About 20% of people who support their kids in adulthood say they have to make changes to their retirement plan every few months to be able to reach their goals.

• Use rewards credit cards to earn points and save money.

• Teach your kids the importance of money and educate them about credit.

More importantly, know when to say no.

Check this video for more:

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👩🏽‍⚖️ Legal Stuff
Nothing in this newsletter is financial advice. Always do your own research and think for yourself.

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