GM ending production of Chevy bolt EV; First Republic Bank Shares Plummet nearly 50% | NTD Business

Thanks for joining us. Coming up on NTD Business tonight. Shares of First Republic Bank plummeted today after it revealed massive withdrawals in the last quarter. Bank is also laying off workers. The cheapest American EV is going away. Stay tuned to find out why GM is ending the car's production. Manufacturing giant 3M announcing major layoffs today. How many are they letting go and why? The latest move from chat GPT to ease privacy concerns. You can now use it in incognito mode. As the president officially kicks off his re-election campaign, we review his economic policy over the past two years and look ahead at what we'll get if he wins again. That and much more coming up on NTD Business. Great to have you with us, Don Ma here. Wall Street's major averages closed lower today as a downbeat UPS forecast exacerbated investor concerns about a slowing US economy, while plunging deposits at First Republic Bank added to jitters about the bank sector's health. More on that in just a moment. The Dow fell 345 points or 1%, S&P lost 65 points or 1.6%, and the Nasdaq dropped 238 points or nearly 2%. Microsoft just reported earnings after the bell, beating street estimates for third quarter revenue. Its revenue rose 7% to $52.9 billion in the quarter that ended March. Google Parent Alphabet also beat estimates, thanks to higher demand for cloud services and better-than-expected ad sales. Both Microsoft and Alphabet shares jumped in after-hours trading. These two are the first to report results in big tech. Instagram owner Meta and Amazon all do later in the week. Altogether, the four companies command more than $5 trillion in market cap, or more than 14% of the value of the S&P 500 index. Between Microsoft, Alphabet, and Meta, analysts expect profits to rise from the previous quarter 4.5% on average to be exact. But compared to a year earlier, profit is expected to slump nearly 16% on average. Big tech firms have been laying off staff, so investors will be watching whether that cost-cutting measure has boosted profits. Another thing investors will be looking at is how artificial intelligence can be the next growth engine for these tech companies. Shares of First Republic Bank tanked nearly 50% today, from around $16 to just over $8 after the bank reported earnings late yesterday. Customers pulled more than $100 billion, or about 41% of its total deposits, from the bank in the first quarter, according to its latest earnings. It did say the withdrawals had stabilized, though, this month. The bank came into focus after Silicon Valley Bank and Signature Bank collapsed last month, shaking confidence in regional banks. A group of big banks stepped in with $30 billion to prevent First Republic from failing. First Republic says it now plans to slash spending and laying off up to 25% of employees in the second quarter. Meanwhile, First Republic is facing a class-action lawsuit from shareholders, who say its annual report in 2020 downplayed and concealed the risks posed by potential increases to interest rates. Moving on, the Chevy Bolt starts at $26,500 and qualifies for a $7,500 federal tax credit. It's been repeatedly touted by the Biden administration as an example of an affordable EV. But now it's going away. NTD Sean Marshall has more. It's time to say goodbye to the cheapest American-made electric vehicle. We're talking to GM CEO Mary Barra in a Q1 earnings call today. We delivered more than 20,000 EVs in the US in the quarter on the strength of record Bolt EV and EUV sales and rising Cadillac Lyric deliveries. This moves us up to the second market position and increased our EV market share by 800 basis points. But later in the call, she said this. We have progressed so far that it's now time to plan to end the Chevrolet Bolt EV and EUV production, which will happen at the very end of the year. The odd thing is that the Chevy Bolt accounts for more than 90% of GM's EV sales. I asked car expert Lauren Fix for her opinion. GM wants to be all EV. That is their plan. I'm not sure from a financial standpoint if that makes sense because I think consumers want choices. They want to have the choice of battery electric, hybrid, plug-in, regular hybrid, gasoline or diesel. And when you limit it down to one option, it limits your customer base. But they're putting all in investment and going with this new Altium battery. The battery cells and bolts are outdated compared to Altium architecture GM uses in its newer EVs. The older cells had a problem in August 2021 when battery fires caused a $2 billion recall campaign. The recall prompted GM to halt bolt production and sales for more than six months. GM's battery partner LG Electronics agreed to reimburse the automaker for $1.2 billion in costs connected with the bolt recall. Sean Marshall, NTD News. GM stock fell at market close today. Manufacturing giant 3M announced mass layoffs today as it joins others in the manufacturing sector bracing for a possible recession. The company, which owns popular brands like Post-it Notes and Scotch Tape, plans to lay off 6,000 workers worldwide. That's on top of the 2,500 manufacturing jobs 3M cut in January. The company said it expects to save up to about $900 million a year before taxes after the layoffs are done. The new layoffs are part of a major restructuring plan that will include several management changes. The cuts come as 3M reported earnings and sales that fell from the previous year. The company said pandemic-era supply chain problems have eased and backlogged orders have been shipped. That means they now no longer need as much staff. Now turning to tech. Want to use the chatGBT chatbot but don't want the company to collect your data? OpenAI, the company behind the chatbot, is today introducing what's called an incognito mode. It does not save your conversation history or use it to improve its artificial intelligence. Scrutiny has grown over how chatGBT and other chatbots manage data from hundreds of millions of users. That data is commonly used to improve or train AI. OpenAI says the new feature aims to prioritize user privacy and put users quote, in the driver's seat regarding data collection. Italy last month banned chatGBT over possible privacy violations but said the service could resume if it met demands such as giving consumers tools to object to the processing of their data. France and Spain have also begun probing the service. OpenAI is also saying it's planning a chatGBT business subscription with additional data controls. Now we take a closer look at the big shakeup in media yesterday. Fox News announced Tucker Carlson is parting ways. The departure took many by surprise. NTD's Jeremy Sandberg brings us some reactions from media analysts. It's not yet clear why Fox and Carlson parted ways. Carlson's executive producer Justin Wells is also out. I will say that it is shocking. But Fox has done this before. Fox fired former news anchor Bill O'Reilly in 2017. That was over sexual harassment allegations. The network didn't miss a beat. Carlson was moved up into the prime time slot. Some industry analysts speculate he could choose to monetize his personal brand through social media or his own platform. The traditional news organizations aren't the only way to reach a mass public anymore. I don't think we've certainly heard the last of him. You know, there there are a few places that he could land. You know, maybe Donald Trump, maybe Truth Social will start a, you know, a digital video channel of some kind. Others aren't so sure that would be the best move for the popular host. When Donald Trump left Twitter and went to Truth Social, his audience did not follow him. Right. Truth Social is is a minuscule amount of the people that he was speaking to on Twitter. Newsmax does not have nearly the distribution that Fox News has. So it would be impossible for them to get the type of audience that Fox News has amassed. I think a lot of examples of somebody trying to do this and failing. Now, I would suspect that he might try to build on the sort of triumvirate of books and podcasts and, you know, something that's more of a subscription base that goes to him without a news organization around it and monetize his personal brand. We'll be back on Monday. In the meantime, have the best weekend with the ones that you love and we'll see you then. Tucker Carlson tonight was the most watched program on cable news every weeknight, with the highest rating in the key age demographic of 25 to 54. It averaged over 3 million viewers per episode last year. Jeremy Sandberg, NTD News. Well, one thing is for sure here. Tucker Carlson is now one of the hottest free agents in cable news. At least two TV networks are weighing the possibility of hiring him. Conservative news agency Newsmax and San Diego based One America News or OAN have both signaled their interest. OAN CEO Robert Herring is looking to meet with Carlson for negotiations. The company said on Twitter that Fox News' loss could be OAN's gain. In an interview with Bloomberg, Newsmax CEO Chris Rudy said he had the same wish, adding Fox's decision to part ways with Carlson didn't make sense in light of his large viewership. And if President Biden is presented with House Speaker McCarthy's spending and debt bill, he will veto it. That's what the White House says today. McCarthy floated a plan last week that would pair $4.5 trillion in spending cuts with a $1.5 trillion increase in the debt limit. The limit is currently $31.4 trillion. House GOP leaders are pushing for a floor vote Wednesday. McCarthy has also invited Biden to discuss the debt ceiling with him. The White House has said it won't negotiate and will only accept a clean proposal to raise the nation's borrowing limit. Democrat Senator Joe Manchin blasted Biden for refusing to negotiate with Republicans. President Biden is officially running for re-election in 2024. His announcement today comes four years to the day after he launched his 2020 presidential bid. NTD's Daniel Monahan has the details. More freedom or less freedom? That's the decision President Biden says Americans are facing. His campaign launch video makes reference to so-called book banning and abortion access while also showing images of the January 6th Capitol breach. Around the country, mega extremists are lining up to take on those bedrock freedoms. Biden faces challenges that were not present during his initial campaign. The president's handling of the nation's economy has been a source of concern for many Americans since late 2021. Due to stubbornly high inflation and ongoing recession fears, a legal inquiry continues into Biden's handling of classified documents from his time as vice president and Biden's age currently 80 has become an issue of increasing focus. University of Chicago professor William Howell points out that Biden will be closer to 90 than 80 if he serves out the entirety of a second term. And this raises lots of concerns, justifiable concerns in my view. While repeated speaking gaffes have raised questions about his mental fortitude. It's more kinds of things that might betray declining mental acuity. But aging research professor Steven Ostad had a more optimistic view. Records for aging are being set all the time. You know, we now have a hundred year old marathon record. While Chapman University professor Lori Cox-Hahn says bringing in reinforcements could help Biden's campaign. You're going to have to rely probably on Kamala Harris quite a bit. The University of Virginia's Barbara Perry believes that Biden's the right choice if the nominee across the aisle is former president Donald Trump. Typically in the polls, it has shown that Joe Biden is the one Democrat who can defeat Donald Trump. At 76 years old himself, Trump is not a young man either. Some polls suggest that Americans don't want a repeat of the 2020 election. A CNBC All-America Economic Survey found that about 60% of the public thinks Trump should not seek the presidency. With 70% feeling the same about Biden running for a second term. Other challenges Biden is facing include the escalating crisis at the US-Mexico border, the Russia-Ukraine war, and communist China's growing influence and potential invasion of Taiwan. Daniel Monahan, NTD News. So now that we know President Biden is indeed running for a re-election, we decided to take a look at his economic policies to see how they've affected the country and if he wins the presidency once again, what they mean for the country in the long term. He briefly mentioned economic policy during a speech today at a trade union conference. Some key areas of Biden's policies include over $5 trillion in COVID aid after many were forced to stay indoors for months. This is the largest cash injection in recorded history. Biden also increased spending in the Inflation Reduction Act, which set aside $400 billion to help the renewable energy sector. We spoke with Richard Stern, director of the Grover M. Herman Center for the Federal Budget at the Heritage Foundation. He says that Biden's policies equate to assaults on the American economy. The sad, tragic reality of it is administration has destroyed the economy by continuing the $8 trillion in the Federal Reserve by spending with abandon, by saddling us with debt that threatens now to derail our economy. Tremendously increased spending, mostly to pay people to leave the workforce. So that had the effect, of course, of leaving businesses with an unprecedented worker shortage, leaving people without the goods and services that they need. Stern says Biden still wants to increase spending. He believes that if Biden is reelected, this spending will lead to high prices and high interest rates for a long time to come. While some economists worry that Biden's policies are causing inflation, other economists support his policies. They say the spending is actually necessary because it protects people's livelihoods and fights income inequality. For example, Harvard economist Jason Furman supported the COVID aid payments for this reason. Furman did tell The New Yorker he thought too much, though, was given out. And when Biden puts taxpayer money into the market, it interferes with the natural state of the market. In economics, this is called government interventionism. We spoke with economist Samuel Gregg from the American Institute for Economic Research. Inflation is not coming down as fast as it should be. We are starting to see some minuscule increases in unemployment. We are also seeing economic growth starting to falter. These types of interventionist policies can produce certain short-term results that particularly legislators and executives like insofar as when election time comes around, they can point to certain things and say, look, we did this. Gregg says Biden's policies will lead to growing public debt. America's debt is currently at $31.4 trillion and going up by the second. Inflation is falling, though, as Gregg said, but maybe not as fast as it could be. One of the key drivers of inflation during Biden's term has been energy prices. We spoke with energy expert Daniel Turner, who says energy prices are high because of Biden's hostility towards the fossil fuel industry. He bragged in the last elections, the midterms, that he has given no new permits for oil, gas, etc. EPA regulations to punish fossil fuel cars, to punish fossil fuel electricity production facilities. Everything requires energy to be manufactured, produced, transported. And so by making energy expensive, we have made all goods and services expensive. Americans seem a little worried about the economy these days. The conference board's consumer confidence measures attitudes towards the economy and job market. Consumer confidence dropped from 104 in March to 101 this month. Since last February, it's been at a low, low enough level that's associated with a recession within the next year. The number briefly crawled above that territory only once in December. People are concerned about inflation and jobs, and they expect things to only get worse in the next six months. And a new study found that a quarter of employed Americans cut their retirement savings in 2022 due to inflation. And almost half of those were forced to stop saving entirely. The study was done by the Global Financial Literacy Excellence Center and the Teachers Insurance and Annuity Association of America Institute. Hispanic Americans were impacted at the most by the rising cost of living, according to the study, and were twice as likely to stop saving altogether. Additionally, 30% of American workers said they're struggling to make ends meet in 2022. Another survey by GoBankingRates in March found that the majority of Americans have less than $500,000 saved for retirement. And joining me right now is Brian Kudrna, financial advisor and author of the book, What Should I Do With My Money? Now, inflation seems like it's forcing a quarter of Americans to cut retirement savings. I just want to know what is the significance of this? If you compound that over 10, 15, 20 years, that could be a lot of money, right? Yep. And I think that's the real thing there, Don. Is this a temporary reduction or pause of that retirement savings? Or could this be something that folks are doing maybe mistakenly for the next 5, 10, 15 years? If it's a long-term adjustment, then that's a bad thing. That's going to leave them ill-prepared for retirement. But if this is a little blip where inflation's kind of raised their expenses more than anticipated, they dialed back their 401k by a percent or two just for this year, then, you know, it's nothing to be overly concerned with. You know, do you think that when inflation does come down eventually, that everything we're seeing now will be behind us? I think where the kind of the mistake could happen is if somebody doesn't go back to the way they were contributing before inflation kind of creeped its head. So, like what I've told a lot of folks is, you know, it's OK if we need to, you know, tighten the belt a little bit. But if you're reducing your savings rate or how much you're contributing to your 401k, then you should also be reducing it proportionately something in your budget. All right. So we don't want to just say, hey, you know, I'm living the way I'm used to living and now I'm dialing back my investment and my savings rate. You know, I always encourage clients to have about a 20% savings rate in total. So if we fall below that, then we've got to do everything in our power to get back up again. So that's where we do need to make it temporary or it just becomes a question of inflows and outflows. Perhaps we need to revisit that budget. Now, do you think that retirement funds, it mostly comes from savings rather than doing well in the stock market? What are your thoughts? Yeah, it's that's a great point. It all comes back to the savings rate. You know, over time, if you can, you know, maybe based on your how aggressive you are, what your risk tolerance was, maybe you can get an 8% return instead of a 6% return. You know, those things, they're all just supplements along the way that will certainly help the cause. But I think the key is going back to the habit of how much are we contributing every month? How much are we contributing every paycheck? And that's what we're in control of. So I think when we kind of get, you know, lured into this false sense of hope, either through a market gain or we start to get emotional in a market downturn, that's where mistakes happen. So I think we have to go back to what can I control control? And that's how much we're actually putting away every month. So when we are seeing headlines like this, that inflation is causing a quarter of Americans to cut retirement savings, are you concerned? I'm not. I'm really not, because I do think it is more of a temporary thing. You know, some of the studies that, you know, we've cited that show, you know, 25% of folks out there have had to reduce their retirement savings. You know, a lot of that goes back to financial literacy and just having an understanding of, you know, looking at the long term, if we're going to be in our career for 30 years, 30 plus years and have that long of a duration to try and save for retirement, you know, we can't make a judgment just based off of a six month frame or even one year. So I think we just have to keep things in context. Yeah. And the thing with headlines, it's the more shocking ones that tend to get more attention rather than the milder ones. But thank you so much today. Brian, was a pleasure speaking to you. Yeah, thanks for having me on, Don. Happy to talk. Taylor Swift tickets are notoriously pricey and hard to get, and fans are going to ever greater lengths to get them. But the owners of a pizzeria in New Orleans may take the cake or pie in this case. Zanger White and his wife, who owns Z's Pizzeria, are offering free pizza for a year in exchange for two tickets. They actually said at least a year, noting they might be willing to negotiate. White says they came up with the idea during the recent ticket mastermess. He also says he's hoping the offer might get the attention of Swift herself. And that's it today from the NTD business team and myself, Don Ma. If you have any news tips or feedback for the show, please email us at business at NTD.com. Thanks for watching. We'll see you tomorrow.