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- EV Stocks Short-Circuit As Trump Plans to End Tax Credits
EV Stocks Short-Circuit As Trump Plans to End Tax Credits
Gun Woo Lee & Lucian H
November 15, 2024
Good Morning. This is the Investor Lookout with the daily digest.
Here’s what we got today:
🚗 EV Stocks Face Headwinds Amid Changes to Tax Credits
🪙 Michael Burry Bets on China, Adds Calculated Hedges
EV Stocks Face Headwinds Amid Changes to Tax Credits
Trump is pulling the plug on EV tax credits, and the electric car market is feeling the shock. Shares of Tesla ($TSLA), Rivian ($RIVN), and Lucid ($LCID) took a hit after news broke that President-elect Trump plans to eliminate the $7,500 federal tax credit for EV purchases as part of a broader tax overhaul. Rivian was the most impacted, losing 12% of its value and erasing gains from its recent Volkswagen ($VW) joint venture announcement. According to the Treasury Department, EV buyers saved over $600 million in just three months thanks to these tax credits.
Companies such as Ford ($F) and Hyundai ($005380) have been modifying their vehicle plans to ensure that they qualify for the tax credits
Trump's administration called the pro-EV policies of President Biden a "Green New Scam," planning to roll back the Inflation Reduction Act (IRA) and expand oil drilling
Michael Burry Bets on China, Adds Calculated Hedges
Michael Burry is planning three steps ahead in the Chinese market, still remembers to buy some puts. "The Big Short" real-life protagonist Michael Burry increased his holdings in Chinese companies Alibaba ($BABA), Baidu ($BIDU), and JD.com ($JD) during the third quarter amid Beijing's stimulus efforts. Burry's investment firm, Scion Asset Management, also bought puts on these stocks to hedge against potential losses. The Chinese portfolio now makes up 65% of Scion's total holdings, worth a total $54 million.
Despite the stimulus rally, Alibaba, JD.com, and Baidu have lost over 20% since their early October peaks
China's slowdown and Trump's re-election concern Wall Street and fund managers who remain cautious about the long-term outlook
Market Take
Markets
Global Oil Market Faces a Million-Barrel Glut Next Year, the IEA Says. The International Energy Agency reports that we are heading toward an oil surplus of over 1 million barrels daily in 2025. If OPEC+ decides to increase production, the market could push prices lower. [Read]
Japan planning $87 bln extra budget to fund stimulus package, paper says. The Japanese government is preparing to fund a stimulus package worth 13.5 trillion yen ($87 billion) to help low-income households and offset rising prices. [Read]
Why one economist says Elon Musk could hold the key to lower mortgage rates. Home sales are at multi-decade lows, with 7% mortgage rates pricing out many buyers. Lawrence Yun suggests Elon Musk's new Department of Government Efficiency could be key to reducing the budget deficit. [Read]
Business
Trump's victory has turned up the heat on Disney and its CEO Bob Iger. With Donald Trump going back to the White House, Disney ($DIS) insiders worry about his impact on the company after CEO Bob Iger publicly sparred with Trump in his first term. [Read]
The Onion just bought InfoWars—with the backing of Sandy Hook families. The satirical site The Onion bought the conspiracy-theory website founded by Alex Jones. The families of victims of the Sandy Hook school shooting helped the deal come together. [Read]
Diamond Sports reaches key milestone toward exiting bankruptcy. The owner of regional sports networks could exit bankruptcy after a judge said he would sign off on its reorganization plan. The plan intends to cut its $9 billion debt to $200 million. [Read]
Featured News
Fed doesn't need to be in hurry to cut rates: Powell. Investing.com
Lookout Stock of the Month
Name | Price | 24H | YTD | Buy Rating |
|---|---|---|---|---|
Talen, Inc. (TLN) | $170 | -1.59% | +217.56% | 85/100 |
Current Price | 24 Hours Gain / Loss | Year to date Gain / Loss | Red-Yellow-Green | |
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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.
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