Elon Musk Unveils New Car Without Steering Wheel

For today's Business Matters, we have Don Ma here with us. Don, always a pleasure. Anything new today in the world of business? Yeah, actually good news for the U.S. consumer for you guys, starting off with that. Two of the country's biggest banks said today that consumers remain resilient with solid spending in the third quarter, but that there's still signs, though, that higher inflation has stretched some Americans on lower incomes. So JP Morgan's chief financial officer said that spending patterns were, quote, Consistent with the narrative that consumers are on solid footing, JP Morgan Chase and Wells Fargo both reported strong earnings today. BlackRock's asset under management hit a record high for the third straight quarter. Assets managed by BlackRock shot up to $11.5 trillion in the period. So the U.S. stock market rally actually boosted inflows. Stocks reversed an August sell-off and broadened their rally in the third quarter. It was boosted partially by renewed hopes of a softer landing for the U.S. economy. BlackRock is expanding its offerings to become an all-in-one platform for investors by integrating public and private markets. Now, Volkswagen today reported a 7% decline in third quarter global deliveries, and this is showing how Europe's car industry is facing tough challenges, and that includes weak demand from China and high production costs at home. Europe's car companies also have to contend with the impact of a potential trade war between Beijing and the European Union. The automaker has cut its annual outlook for a second time in less than three months and expects to deliver fewer cars this year. Now, let's talk about inflation. Producer prices were unchanged in September, pointing to a still favorable inflation outlook and supporting views rather that the Federal Reserve would cut interest rates again next month. So the Producer Price Index measures average price changes for producers and manufacturers. It rose 1.8% for the year ending in September. According to official figures, that's slightly down from the 1.9% gain in August. The annual rate is still higher than the 1.6% level economists had expected. And a huge find for a bank in a case involving drug cartels' money laundering. Regulators announced yesterday that TD Bank has to pay $3 billion. The money is to settle charges that it failed to properly monitor the illicit activity. The fine includes a $1.3 billion penalty that will be paid to the Treasury Department's Financial Crimes Enforcement Network. And that's a record fine for a bank. TD also intends to pay just under $2 billion to the Justice Department. It's going to plead guilty to resolve the government's investigation that the bank allowed money laundering. Attorney General Merrick Garland said about the bank that, quote, by making its services convenient for criminals, it became one. And TikTok has confirmed that it is laying off hundreds of employees from its global workforce. The social media giant said it's part of a shift towards a greater use of AI in content moderation. Malaysia is particularly hard hit, though TikTok later said fewer than 500 employees in Malaysia were affected. Employees were mostly involved in the firm's content moderation operations. TikTok employs a mix of automated detection and human moderators to review and review content posted on the site. The Department of Justice is suing a company executive for evading tariffs on Chinese solar panels. The company EcoSology imported solar panels into the United States. Its executive, Paul Bakom, is accused of making false statements to customs officials to evade tariffs, and these tariffs are meant to counter China's oversupply and dumping practices. Examples include solar cells that were classified as LED lights, or the country of origin was labeled as Turkey instead of China. DOJ seeks more than $1 million to recover lost revenue in import duties and civil penalties. Meanwhile, Indonesia has asked Google and Apple to block Chinese fast fashion firm, Timu, in their application stores. The move aims to protect the country's small and medium-sized businesses against cheap products offered by Timu. The company's rapid growth has triggered scrutiny over its low-cost business model of sending parcels to customers from China by several countries. Now, Indonesia will also block any investment by Timu in local e-commerce if it makes such a move. Timu, Xi'an, Apple, and Google did not respond to requests for comment. All right, now joining me is automotive industry expert, Lauren Fix at CarCoach Reports. Lauren, how's it going? Good, how are you? I'm doing well. So it looks like former President Trump announced new tax incentives aimed at revitalizing auto manufacturing. And of course, this is a presidential campaign promise, and that includes credits for research and development as well as expanded claims of equipment costs for small businesses, as well as consumer tax deductions for car loan interest. So Lauren, will increased tariffs on imported vehicles significantly boost domestic auto production, in your opinion? Well, actually, well, I do like the free market terrain, but when you've got China coming in and purposely controlling the marketplace and we foolishly shipped a lot of jobs and a lot of sub-companies over there for components, that's what's really costing us. But the whole idea of Donald Trump's plan actually has some good legs. As someone who owns a manufacturing company, having the ability to write off some of our R&D is very helpful. And this administration has stopped that, and that makes it difficult for people to come up with new batteries, solid-state batteries for electric cars, new technologies. A lot of that gets shipped overseas because we no longer have the ability to write that off. But also giving consumers the opportunity to write off their interest is very big because what that will do is increase sales for the auto industry. Right now, the auto industry is struggling badly. Stellantis is in really huge trouble with their CEO. Nissan is in trouble as well. And pretty much every brand is having a lot of challenges, especially with this electric vehicle mandate. Now, if the mandate gets set aside like Donald Trump would like to do, I think what you're going to see is a huge increase in sales because consumers will then be able to purchase what they want. But then offering them to be able to write off their interest on their taxes, that would help them a lot. It'll help the local economies as well because dealers will be selling more cars, and that helps everyone up and down the supply chain. But let me ask you this. Trump's proposal of tariffs on imported automobiles, have they helped or harmed the U.S. auto industry if we look back into history? Well, it depends on how it's done. And Donald Trump did it correctly. And what's interesting is this current administration, President Biden said that he was going to leave the tariffs in place. So he liked the money coming in from China, but then he doubled it and made it 200%. So that's where it's supposed to be going to. As they increase these tariffs under the current administration, we have to look at the impact. Is it impacting or helping or not? And that requires someone to look into history and to look to see how it's helping or hurting. We were in the process of making chips here in the U.S. with chimney rock being hit with the storm. We're losing a huge quartz plant. We've got a fire in Wyoming where there's lithium plants. We have a lithium plant in North Carolina. It's going to definitely push back the chip manufacturing here, which would definitely help us versus bringing everything in from other countries. But at this point, I think we might run into another chip shortage, which is not good. Would these tariffs increase costs for consumers? No, it shouldn't because what will happen is as long as car manufacturers start to realize this in advance and they've been given a heads up, if President Trump wins, then they'll have plenty of heads up to be looking for new suppliers here in the U.S. or in other countries. If they're coming from China or some of their Chinese-owned companies, they know their costs are going to go up. They're already raising prices on literally every car. The average price of a vehicle that's just gasoline powered is $50,000 and the average cost of an electric car is $66,000. So they're making it so far out of reach for the average consumer, especially with interest rates being what they are. They have not dropped to the point that made it easier for consumers with everything costing more money. We are in a tough situation as a consumer. The auto industry is hurting all the way around. We're seeing a lot of job layoffs and it's just not good. And the only way to save this is to use the tariffs to go back into the economy. And I think that will be a huge factor in allowing consumers to not have taxes on tips, bringing back the salt deduction, all these kinds of things will definitely help the economy. All right, let me talk to you about tax incentives. In your opinion, do they, for manufacturers and consumers, really result in long-term job creation? Well, they can, because if there's more cash available, whether it be from a manufacturer or a car company or a local dealer, the more money that they have in their pocket, the more willing and more people are gonna spend money and the more willing manufacturers and brands and companies will be to hire more people. So when things are tight, you let people go. You let go that person did an okay job, but they probably did a good job because you need to keep your best employees to keep your company afloat. When things are more free flowing and you have more cash available to you, you're gonna hire more people, you're gonna do more research and development and you'll be able to increase your sales. And do you think allowing consumers to deduct car loan interest, will that substantially increase car sales or is this just more of a short-term fix that maybe perhaps overlooks deeper economic issues? Well, I know a lot of people don't maybe look at it in the same way I do, but how I see it is if you give customers more of their money back, they're more likely to spend it on other things to help the economy. It's a rising tides kind of theory. But overall, if you look at things like the Laffer curve and a lot of other economics experts are gonna tell you that giving people back their money means that they'll spend more money. That's good for not just the economy, it allows them to buy more cars, allows them to buy more accessories, more repairs and maintenance for the things that they have. All of that adds up for everyone. So giving people back their money, that's the best way to do it. Okay, one more thing here. Can you talk about the dynamics between Trump promising to boost domestic oil production and the car industry's current shift toward electric vehicles? Well, the car industry was shifting toward electric vehicles because of a government mandate. No government mandate has ever been a good thing. But when you take the opportunity to shift back to fracking, drilling more here, keeping our oil and gas here for us to use, this is actually a good thing. All of these, you're starting to see the transition of car manufacturers realizing, if we wanna stay in business, we better start producing what customers want. And back to what I originally said about Stellantis, at first they said every car they build will be either hybrid, electric or gas. Well, now they've doubled down the other direction because of government pressure to all electrics. And what's happening? They've got layoffs, they're shuffling their executive management, people are being let go. All of this is adding up in a negative way for companies like Stellantis and Nissan. What you wanna be able to do is offer what customers want. They want hybrids, they want plug-in hybrids, they want electric and they want gas. They wanna be able to choose what works for them and for their lifestyle, not being told this is what you must have. Every time that happens, it never works out well for the brands and it never works out well for the consumers. All right, Lauren, thank you very much for your time today. Thank you. And next, important recall for parents to know about. Fisher Price has recalled more than 2 million baby swings due to a risk of supplication. Five babies died between 2012 and 2022. The U.S. Consumer Product Safety Commission said, in most of those cases, the babies who died were unrestrained and bedding materials were added to the product. The swings should never be used for sleep and bedding materials should never be added to it. The Fisher Price Suga Swings were sold at Amazon and Tories R Us, Walmart and Target. And if you have one, you should remove the headrest and body support insert from the seat pad before continuing to use the swing for your baby. Also, Fisher Price is offering a $25 refund to shoppers who remove and destroy the headrest and body support insert. Tesla CEO Elon Musk made major announcements last night at the WeRobot Tesla Party, including new products. Here are the details. Welcome to the WeRobot Party. Tesla CEO Elon Musk made a slew of announcements Thursday night at Warner Brothers Studio. He introduced the CyberCab. A fully autonomous car with no steering wheel or pedals, it's intended to cost under $30,000 and operate as a robo-taxi. Musk says people could own a group of CyberCabs the same way a shepherd tends to a flock of sheep. He projects rides may cost 30 to 40 cents per mile, including taxes. It can also be charged inductively. The car can be parked above a charging pad with no need to plug anything in. Musk also unveiled the RoboVan, an autonomous van that can hold 20 people and transport cargo. How will this affect the cities that we live in? There's parking lots everywhere, parking garages. So what would happen if you have an autonomous world is that you can now turn parking lots into parks. And so we're taking the ing lot out of parking lot. Guests at the event also mingled with Optimus robots. The robots waved at guests, served drinks, beat them at rock, paper, scissors, lost to them at rock, paper, scissors, and danced. You should be able to buy an Optimus robot for, I think, probably $20,000 to $30,000 long-term. So, and what can it do? It'll basically do anything you want. So it can be a teacher, babysit your kids, it can walk your dog, mow your lawn, get the groceries, just be your friend, serve drinks, whatever you can think of. Tesla's stock dropped 9% after the party. Investors expressed concern over a lack of details. Musk predicts the cyber cab will be out before 2027, at the same time acknowledging he's known for his optimistic timeframes. And the increasing popularity of weight loss drugs is having an effect on the bridal industry with drugs like Ozempic and Wegovy. Brides are quickly shedding pounds. That, in turn, is putting pressure on dressmakers and designers to make more alterations, oftentimes at the last minute. Those changes can be time-consuming and expensive, especially considering how many wedding dresses are intricate with layers of beading and material. And some brides who experience extreme weight loss could end up needing a purchase of a new dress entirely, with more brides turning to such drugs, stress alterations could even get more challenging and more expensive as well. It should be noted that the Food and Drug Administration has warned consumers of risks associated with unapproved GLP-1 drugs. And now joining me is Vijay Muralia. He's the founder and CIO at RP Capital Solutions. Vijay, how are you doing today? Fantastic, and how are you doing? I'm doing well, too. So let me ask you this. JP Morgan Chase CEO, Jamie Dimon, he's saying that he's seeing risk increasing around the world amid conflicts in the Middle East and Russia's invasion of Ukraine, saying that it could have economic impacts. Do you agree or disagree with what he's saying? Well, I think that when you qualify it with a could have economic impact, then, of course, I would have to agree. And I think that what he's doing, which is what any good leader would do, especially on a public conference call, earnings call, is you're basically trying to massage expectations. And this might be an example of that. But at the same time, we cannot deny that, yes, there are a lot of dangers. And there does not seem to be many signs of slowing down. And so I do share that sentiment, but it's a sentiment that is not uncommon. Okay, so with that in mind, what do you see as the biggest headwinds for the financial markets in the coming quarters? I think the election is probably gonna be the biggest question mark. But remember, there are more than one or a few type of financial markets. Earlier today, I was having a very good conversation about gold and precious metals. So that's a marketplace. And that, as you probably, I think you've already discussed this, and I would love to talk to you about it as well, but there's a reason why gold and precious metals are rising. I think that the marketplace is concerned about inflation, something that maybe your viewers are tired of me talking about, but I promise you it's for a good reason. Inflation's not going away, just because the rate comes down does not mean the cost of living comes down. And that's the real issue. So do you feel like perhaps people should diversify their portfolios, maybe think about commodities like gold and others, for example? I think that diversification is a great idea until and unless you over-diversify, but it depends on your goals. So for example, I know index funds and ETFs are the rage, and I have nothing against index funds, and ETFs are helpful, but the new ETFs, there's like single stock ETFs, there's inverse ETFs, there's 2X, 3X leverage ETFs. My concern is that what is supposed to be investing is turning into gambling. And I think that it's not a coincidence that gambling is becoming legalized, normalized, and you're seeing celebrities endorse that behavior, which I don't condone, but somebody else, maybe the devil's advocate, they would say maybe Wall Street's the biggest casino. So to that, I would say, well, there are risks inherent in all of life's decisions. So, but I think I digress. All right, speaking about risk, Jamie Dimon also expressed concern about rising U.S.-China tensions. I'm just curious, what's your biggest concern on this front from your vantage point? I was actually, I think that was the statement that he made that made least sense to me. And the reason why I say that is because if you were to just look at the current administration's policy, behavior, and the trends in our country, they seem to be pro-China, if anything, right? I mean, if you just look at, we're wasting time on wars that we have very little knowledge about and should not have, in my not-so-humble opinion, we shouldn't really have a dog in that fight, okay? I think we should mind our own business to a certain extent. We have our problems of our own. I think that when you look at ill immigration, I think that's a big concern, but that certainly helps China, and so does all this nonsense about standardized tests are racist and that boys and girls are social constructs. There's a lot of problems that we have, but all of the current trends, especially that the administration is for, seem to benefit China in the long run. So you mentioned wars. You mentioned wars just now, and I want to ask you a question about that. So with defense spending on the rise globally, do you see an opportunity, investment opportunity in defense stocks? Short answer is yes. Here's the sad reality. War is very profitable, especially with the current structure, right? I would ask everyone to go listen to, and it's easy to find on YouTube, but President Eisenhower's farewell address, and he warned us about what's happening, what we've witnessed, and I think a lot of people, especially outlets outside of NTD, and I commend you guys, and God bless you guys for being a voice of reason and of truth, but people are forgetting that war is profitable, but is it moral? And that is, I think, a bigger question. It certainly is. So what strategies would you give investors to protect their portfolios? Well, I would say that any inflation protection is a good idea, because inflation is not going away, but full disclosure, we own ETFs that basically invest in the defense stocks, so I don't want to sound as if I'm riding on some sort of high horse. I have a fiduciary obligation, and that is to protect and grow my client's capital, and that's what I intend to do, and if that's where the money is going, then that's where it's going, but my vote may not be for a continuation of what I consider to be a negative. All right, just one last thing here. On US-China relations, again, Trump said that he's going to put huge tariffs on certain Chinese imports. Is that going to increase tensions between the two countries? Assuming that Trump is elected and that goes through, will that increase tensions? Yes, but the reason why is because Trump is going to be pro-America rather than pro-China, and it's not that he's going to be anti-China. It's just that the job, when you are the President of the United States, is to protect the United States. It's not to defend Ukraine and to let everybody in, even if they might be convicted felons, so I think and I hope that when Trump gets elected, if we're so blessed, that maybe the tensions rise very slightly, and I mean that. It'll be slight because then all they'll do is back off a little bit, because now there's a big boy at the table that's not a puppet. All right, Vijay, always great speaking to you. Likewise. All right, that's all the stories we have for you guys on Business Matters. Yeah, back to you guys. So we talked about robo-taxis last week, but that unveiling of product and that party that Elon Musk threw really was attention-grabbing. Yeah, I mean, I saw the robots dancing in that clip in the cage. I don't know if I'm ready for a future like that just yet, but I mean, the concept sounds interesting. Yeah, I mean, the robo-van, what's the other one, cyber-cab? Yeah. Very interesting, similar, sounds similar to robo-taxi. Maybe a little bit of competition there, who knows? I don't know if you guys know this, but in the robo-taxi, there's actually no steering wheel and there's no pedals either, yeah. That's interesting, wow. Well, we'll certainly be keeping a look on these product releases from Elon Musk. Thanks so much, Don, we'll see you tomorrow. Thanks, Don.