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Elon Musk giving a wide ranging interview earlier today with the Bloomberg's Michelle Hussain at the Qatar Economic Forum Some News. Musks that he's committed to still leading Tesla five years from now and expects to pair back his political spending, assuaging some investors' concerns about the future of his most valuable company. He also addressed the attacks on the Tesla
brand and the actual cars too. Here's part of the conversation with Bloomberg's Michelle Hussain at the Qatar Economic Forum.
In terms of political spending, I'm going to do a lot less in the future.
And why is that.
I think I've done enough?
Is it because of blowbuck Well?
If I see a reason to do political spending in the future, I will do it.
I don't recurrently see a reason.
That was Elon Musk talking about pulling back on political spending with Bloomberg's Michelle Assan at the Kaitar Economic Forum. We've got Max Chafkin with us. He's the co host of the new Bloomberg podcast Everybody's Business. He's also the co host of the not so new podcast but still pretty great podcast it's called Elon Ink, and a reporter for Bloomberg BusinessWeek. When he's not doing the podcast so reporting, he joins us here in the Bloomberg Interactive Brokers studio.
I'm glad that's what we played, because that's getting a lot of attention right now. And I heard that, and I went back to Elon's Twitter from March of twenty twenty four, and that's when he posted on X this is over a year ago, I will not tribute to either political candidate, and we all saw what happened a few months later. My point is he says stuff and doesn't necessarily commit to it.
Yeah, and even here he's building himself an out right. He's saying less money, which you'd kind of expect anyway. Right, midterms are not as expensive as presidential years. So like it would be very surprising if he dropped another three hundred million dollars, which is roughly what he spent in twenty twenty four on twenty twenty six. And he's also saying, you know, I would it's it's I don't see a reason now, But if I did see a reason in the future, I could I see this as a public negotiation.
Right.
This is the audience here, well, they aren't. There are several different audiences. One of course is Tesla's shareholders trying to say like, look, I'm I'm focused on the company. I'm not getting sucked into Washington, going to try to deal with some of the brand damage that my political presidence has caused. But of course the other audience is Republicans. Right, He's he's putting it out there that if they want money from him, they're going to have to do stuff.
And you know, there's lots of stuff that has happened in Washington since Donald Trump took office that I think has made Elon Musk really happy. But Elon Musk is a very long list, and not all those things have happened. There are lots of opportunities for him to get contracts. You know, the Golden Dome, as you were discussing, like that's a potential revenue source for SpaceX. There are lots of areas that Elon Musk stands to benefit. You also have this in the bill right now, like they're plan
cutting these EV subsidies. Now, we will see where that ends up. But if those EV subsidies are cut completely, that could really hurt Tesla. So I think I think it's to his advantage to say, hey, I'm you know, I'm not a gimme for twenty twenty six. You have to win my support.
Hey, listen.
One are the things that we noticed, Max. We got went on air about two o'clock Wall Street time, and then shortly thereafter we saw the market pull back and go down to its lows. So we sell some selling. We were talking about our Eric Wiener here, who covers
the equity marketing. So a lot of that was with Tesla doing an interview with CNBC and talk about robotaxis and saying that they will be a thousand robotoxies in Austin within a few months, and part of his was saying the cost of that, there's still a lot to be worked out in terms of liabilities. So I'm just curious some of the comments that we got from our interview as well as just Elon talking a lot today.
So the Robotaxi thing, I think part of the challenge, one of the challenges for Tesla is there's so much sort of assumed in the stock. The Tesla bulls basically believe that almost overnight they're going to be able to
turn this thing into a massive, massive business. And I think everything we know from the history of other companies trying to launch these robotaxi things, and I'm thinking particularly of Waimo, Google's driverless car division, which has been doing this for like ten years and has really struggled to commercialize,
is that it's going to take a long time. And when you look closely at what Musk is saying is going to happen in Austin, if you are not paying that close attention, if you're just sort of buying this, like on robin Hood, you hear Elon must say, you know, robotax is going to heat over the world. You think they're going to turn this on, They're going to be huge fleets, It's going to be very small, you know.
On the during the earnings call.
We learned something like ten to twenty robotaxis with tele operation. That's that's people, you know, sitting in command centers making sure the cars don't hit anybody.
It's going to be certainly what WEIMO does by any.
Means, No, it's it's closer to it's maybe what WEIMO did, you know, years ago, And it's just it's a realization. I think that this is going to take a long time. So I don't know. Elon Musk has this kind of amazing ability to spin stories about the future to get people excited about the future, and he may be able to do that. But but like Tesla's stock has gone up a lot in recent weeks, you know, And no, some of that has to do with you know, terriff
expectations and so on. But this is a very valuable company relative to the number of cars it sells.
Max in the interview that he gave to our team at the Guitar Economic Forum earlier today, he was asked about protesters or the Tesla brand damage, and what he answered was he said, quote, they're on the wrong side of history, and that's an evil thing to do. That's referring to people damaging Tesla cars and showrooms. Something needs to be done about them, and a number of them
are going to prison and they deserve it. It seems like he's certainly there were reports of damage to Tesla vehicles and damage to test Tesla shrooms, but there's also been these protests that happened happening at Tesla showrooms all over the country, especially during his work with Doge, that were not violent. Yeah, it seems like he's He's also in the past talked about these people being part of some bigger movement. He's referred to them online as being paid.
Have we seen any evidence of that?
No, there's no evidence, no good evidence that the people who are showing up at these Tesla protests are paid. You know, I would say that there's a he's conflating a couple of different things. But you know, and having talked, we did a podcast episode on Eline a week and a half ago with a former Tesla sales manager, and who he's talking about is like, the real danger is not these protesters, not somebody showing up to a protest,
It's just somebody not buying. And like that is a thing that even if you remove the protests, the protests are of course not good for the brand. They're an expression of unhappiness and so on. It doesn't lead to good headlines. Obviously, protests can sometimes get out of hand, but also it's just a lot of people, I think, do not want to be associate associate their car with
something this controversial. And what he was saying is that when Musk started, what this Tesla manager was saying is that when Must started getting involved in politics a couple of years ago, they had people come into the Tesla stores and argue and say, you know, I like the car, but I don't like this. You know, still very engaged. And when he said what changed as Must became more and more engaged, is they just stopped coming. They just decided, you know, screw this, Like I don't want to be
associated with something that's controversial. And when you look at what's happening in the sales, like that's what's showing up. It's not the protesters, it's just the people not buying. And that's the thing that's going to be hard to turn around.
I think in terms of Tesla, the business just real quickly. I mean, I think you talked about things are turning around.
Is he right?
I think investors are certainly hoping, so we have not in Again, in the publicly available data, there is very little to support and that support this. Now Elon Musk is saying it's happening, trust me, and he's citing the stock price now. As I said earlier, the stock price. Lots of things are driving the stock price, but one of the big things is expectations around Trump's tariffs, in
other words, having nothing to do with sales. So he's saying you should trust me that the business is turning around. Because Tesla's stock is up substantially over the last month. That doesn't to me suggest that sales are definitely up. What we've seen is numbers out of Europe and numbers out of China still not good. The US we don't really know yet, so we will see. But this is not the kind of thing I think that can be
turned around in a matter of days or weeks. People make decisions about buying cars over a term of years. That's why car companies like spend so much doing brand advertising. And so this is going to be This is going to have created damage with at least some subset of
consumer that may be hard to undo. Now Musk did say during the interview this morning in Qatar that some people are buying Teslas because of who he is, and there's a very memorable quote he said, maybe they're buying it the people who are putting the stickers on the cars, saying I bought this before he was crazy. Maybe some people are buying it because he was crazy or whatever. So obviously making light of those stickers. Now, I don't think we've really seen that show up in the data yet.
Cyber truck sales have not been great, although again this stuff can take time. Maybe it will start to show up.
We'll see, We'll see, we'll see.
Always fun to listen from what Elon has to say, but always fun to also get someone else's from. Max Chafkin on all of It. Maxi crosco host of Everybody's Business, senior reporter for Bloomberg News, author of The Contrarian Peter Teal and Silicon Valley's Pursuit of Power, and of course, one of the hosts of the Elon In podcast Check It All Out at Bloomberg dot Com.
Are also on the Bloomberg Terminal.
Max, Thanks, you're listening to the Bloomberg Business Week Daily podcast. Catch us live weekday afternoons from two to five East during Listen on Applecarplay and Android Auto with the Bloomberg Business app, or watch us live on YouTube.
I want to talk about batteries because last night, Jean.
Nicol, for every time you said you want to talk about batteries, I'd.
Be a rich woman.
You would be because you like batteries. Batteries are in everything and they're super important, especially when we think of the electrification of vehicles.
Super important.
So what do you want to tell me?
Well, last night c ATL jumped in its Hong Kong trading debut last night our time, I should say, correct today Hong Kong time. This after the Chinese battery Giant wrapped up the world's biggest listing this year, raised four point six billion dollars. This despite being blacklisted by the Pentagon and grinding through political storms. CTL is the largest maker of EV batteries. It supplies batteries to Tesla, VW, FOD, Mercedes, Benz and more. Our next guest, though, is working on
a different type of battery. See U Wong is a founder in CEO of Factorial Energy. This is a company that's working on solid state batteries. She joins us from Massachusetts. See you. Good to have you on the program today. I started out by doing some research when it came to different types of batteries, and I was just thinking to myself, No, I'm just going to have you answer
the question for us. If we think about the batteries that are prominently featured in EVS right now, how are these different than the solid state batteries that you are developing at.
Factorial solid state batteries like a traditional battery, but instead of using a liquid insight, it uses solid state or quasi solid state material. And this makes a battery safer, longer lasting, and more powerful because you can't store more energy and it's less likely to leak or catch on fire. Also more efficient and safer for everything from your cell phones to electric cars.
Plus, our unique.
Dry coding process makes manufacturing cleaner and more cost effective.
So why is it so difficult to make an EVY battery a solid state battery?
Well, there are different part of the challenges coming to play. The biggest challenges scale up. I mean that has been uh that's value for a lot of battery companies, from the first minimal viral product to the manufacturer with a really good quality and cost effective product. And on top of that, it's really the supply chain challenges. I think that's definitely very central to all the battery players in the world.
And last, butt of the.
Least, I think it's really coming down to the execution, right from a startup to a giant supply chain player in the value chain for the batteries really the big difference. So I think that's really coming down to the execution and also the conviction from the leadership team.
Wait, so help me understand to in turn of scaling up, what's the biggest impediment? Is it resources? Financial, resources, materials? I'm trying to understand because you guys have been working on this for a while, and I understand there's development and all of that takes some time. But tell us what's kind of the biggest point or factor that's holding you guys back at this point.
Yeah, I would see there are probably mostly three areas. But I think the biggest hurdle when it comes from a technology to a real product is really to scale up the battery itself. You know, traditionally we have batteries like with our cell phone size batteries when a lot of smaller started to de developing, even as small as your watch battery, like a coy cell battery, and it's a big hurdle scale from like small cell phone batteries to like a big automotive sized battery.
Actually, I brought up a post type that.
The audience today that this is actually one hundred empower battery which is launched in twenty twenty three, and actually we're brought into the b sample earlier last year as well, So this is actually an automotive size battery, and it's a huge from a cell phone size battery to automotive size battery. It's a lot of work to put into like manufacturing, design the battery, and also even to keep
the quality and cost on track. So I think that's really the top biggest challenge for making a battery, alongside with also the cost, the equality checking the.
Battery that you're holding right now that would be a battery that would go into an electric vehicle.
Yeah.
So actually we launched with Mercedes together earlier this year the first solid state battery vehicle with the Global OEM, and we're putting the lithium metal solid state battery that we produced and we're able to power the vehicle of EQS and with our battery which is bringing higher energy and it's a denser energy, so it gives you a less volume and also.
A lighter, smaller battery.
It actually delivers a longer range and also be able to more caustic FUSHI ending the long run. So this is what we have delivered with Mercedes earlier this year in the EQS and it's actually powering the vehicle and it was running on the street of Stutgart.
So just for those who are listening on radio, you know CEU has been holding up.
We all know our car. You know what our cell phone looks like in the small.
Batteries, but this one was about It looked like it was about a foot and a half long, maybe four inches wide. It was very light. Was that the actual battery that batteries are heavy? Was that actually the weight of an actual car battery, a solid state car battery.
Yes, that could be a much lighter compared with the traditional lithium mind batteries. Right, we're using a lithium metal in the anode, which is the lightest metal on.
Earth and also has a.
Lightest weight as ano material has highest capacity as an ano material, so it does give you much higher energy density from the volume metric age density to the guadametricity perspective.
So we're able to enable about fifty to eighty.
Percent higher energy do as they compare with traditional time batteries. And this means with the same size of battery you can potentially give you like twenty thirty or even fifty eighty percent longer range depends on the integration efficiency and the same have the same energy battery, you potentially can have like twenty to thirty percent lighter weight and potentially lower weight and lower volume as well as a less expensive vehicle compared to what you have today.
So kind of win win here, right, lighter weight can go further. Hey, One thing, and this is actually coming from the New York Times, which is also written about what you guys are up to. It says that these types of battery sales that are more prone to grow spiky irregularities that cause short circuits best riches a weight in a company that can overcome this problem develop a battery that is durable, safe and reasonably easy to manufacture.
But these spiky irregularity is a cause short circuits. Is that still an issue of problem that needs to be overcome.
It is a fundamental physics issue when it comes to battery. When this cycling and is performing, it does.
Tend to grow.
There's little dyn drites over the lifetime of the battery. So the difference between solid state versus a liquid battery is that we're able to use the solid state material as well as electrolyze to suppress the dyn dried growth.
So that's the little.
Spiky lithium metal or the various materials will be able to be suppressed when is being grown within the battery system. So it's much lower risk of this short and also even when it happens, it's much less hazard compared to the liquid battery because it's the liquid system is much more volatile when there's a normal embent.
What about when it comes to charging and the ease and quickness of charging range anxiety gives people well anxiety and what about.
Charging, Yes, I know there has been a lot of fuzz, like big buzz around the charging space. I would say for the solid state back the charging speed is very good. Right now For our first generation causes only state battery, we're able to deliver about eighteen eighteen minute fast charging from like ten to ninety percent, and we're also we can do potentially fifteen from like twenty to eighty percent. So that's very much in line with where the lead
inmind battery does. But one thing to remember is that we do deliver higher energy density, which means it's longer driving range even as the same size as battery pack. So with the same minutes of charging, even with the same state of charge, you'll be able to deliver a longer range per charge. So it's less about like how many minutes you can fill up the battery, it's about how many miles you can drive per charge.
So will you guys manufacture these batteries, what percentage are without fault in other words, they work?
Yeah, that's a really good question.
Like people in the industry usually colid yield, which is a very characteristic to evaluate how much scrap and how much faulty batteries it is coming out of the line.
So typically for a Gigo factory, which is a huge battery factories, you spend a two three billion dollars into this, and that's a state of art is about ninety five percent or higher compared with traditional like smaller size of the manufacturing presence, and with the POWERT line which is usually about two hundred three hundred, like what our line and if you get you can get to seventy to eighty percent yield.
It's already state of art in the industry.
So our line, which is a prototyping line right now, is already over eighty five percent yield from our current production line.
What about when it comes to competition, as Carol and I mentioned, there are a lot of companies working on this technology, how do you differentiate yourself from what is out there, what's being worked on by competitors now, including c Ato.
And that's a great point.
I mean, it's a great thing that solid state has been perceived as the next generation to go product for batteries. I mean that's unprecedented an industry. Even among all the top ten players in automotive industry have all seen that this is coming up and it's going to be the immediate next step from the Lindi min battery. And the challenge for that is, like there's a lot of competition
around us, including c Atos. You said, yeah, so our big advantage for our battery first of far, compared with other solid state players.
Is that we have been leading industry with the first So.
We were the first one that scaled it up from a small cell to one hundred empower solid state battery, and we were the first one has the un test, which is very important standard test for shipment with the linked metal battery.
And we were the first one.
Deliver the b sample to a global automotive OEM just for cities. And we were also the first one announced that demol fleet and with the stolentis that's the first fleet being announced by any Saudi state player.
Got it?
Heyns.
Can I just say we're running out of time? Fifteen seconds? What does this thing cost? Is it more expensive than other batteries? And just really quickly ten seconds?
It is very cost competitive at a cell level.
And then we're bleeding that is actually lower costs for the vehicle because it's lighter and safer.
Interesting stuff. Hey, stay in touch and let us know how things are going. See Huang she's founder and CEO of Factorial Energy, a company that's working on those solid state batteries. She's joining us from Massachusetts on this Tuesday.
This is the Bloomberg Business Week Daily Podcast. Listen live each weekday starting at two pm Eastern on Apple Corflay and Android Auto with the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexi play Bloomberg eleven thirty.
Risk off Trade. We also heard from the President right when the markets closed. The big news is about the Golden Dome. The President says that it will be operational in three years. He vowed that a Golden Dome missile defense shield would be fully operational by the end of his term. He said it would be able to protect the US from threats including ballistic missiles, hypersonics, and advanced
cruise missiles. Here's what he said, quote, we will truly be completing the job President Reagan started forty years ago. This is from the Oval Office and it referenced Ronald Reagan's unfulfilled quest for a space based missile defense system that was widely known in the nineteen eighties as Star Wars.
Gotta say it was something I actually remember as a kid, that big announcement by Reagan, and it was, you know, to be kind of this massive spending program, but to build kind of a you know, Star wars like defense.
System in the sky that was during the Cold War. The here of would'tay the height of tension, but during a time of very much tensions. It was in the Cuban missile crisis, but it was pretty tense.
Right all right.
I know someone who knows about this better than we do, Bloomberg National Security Team leader Nik Wada. I'm sitting by in DC. I don't know, Nick, we get so much out of the White House. I am curious about this plan. What struck you in terms of the President's announcement sitting there of course and making talking about it with the Defense Secretary as well, Pete Hesett.
Well, the big thing is that the president has essentially set a timeline. I mean, he said this would be operational by the time he leaves office, so in about three years. But the technology at the heart of this system, the idea of space based interceptors, is still totally unproven.
So you know, the US is capable of intercepting some ground launched missiles, and you know it does have some ability to knock down incoming threats, but the threats that he really listed and the idea that they have of developed this network of interceptors in space to be able to neutralize threats before they even threaten the United States is completely unproven and a massive gamble. The other element
of it. He said that the system would cost one hundred and seventy five billion dollars overall, but the Congressional Budget Office has estimated that it's going to cost about five hundred and forty two billion dollars over twenty years to develop and launch the interceptors. So you know, no surprise that the president would have a lower cost and a truncated timeline, but that's out of whack with what experts did even the Congressional Budget Office say are realistic.
Okay, that's a good point, Nick. I'm also wondering too about the risk or the threats, rather that this protects the United States from. As Carol and I were talking about, the Star Wars program was during the Reagan administration that obviously did not end up happy, but it was at a time when the US and the Soviet Union were locked in the Cold War. I'm just wondering about the
threats that the US faces right now. And look, nobody can see the threats in the future, but what is out there that he's so concerned about.
Well, I mean, you know, certainly the threats of intercontinental ballistic missiles have not gone away. I mean, Russia retains its arsenal and another concern is North Korea. But you know, there is a sort of wing of experts who argue that actually by creating this system, the administration might in some ways actually spur even greater threats, that it would essentially provoke an arms race or a new arms race have you know, like we haven't seen since the Cold War.
But you know, then there's China as well. So there are plenty of countries that retain these capabilities, and the question is whether putting or trying to put a system like this in place will only lead them to advance it's those capabilities, or make it so that they can't be intercepted. So there are all sorts of sort of practical questions around this system, but also strategic ones as well that you may actually be spurring innovation by your adversaries.
Nick, why is he doing this?
Why is he doing this?
Now?
Well, I think you know, this was an executive order he signed, you know, on January twenty seventh, so a couple days into his second administration. It's a big project. It's a splashy project. It's a little bit like sort of you know, declaring you're going to put a man on the moon. I mean that's the sort of level of technological achievement that is going to be required here. And it's also something I mean, he hasn't explicitly said this is why, but it's something that is going to
be a huge boon to defense contractors. You know, amid all the talks about cutting waste and efficiency in the government and looking to both increase the defense budget but also cut back on wasteful programs. I mean, this is going to be a mega program with you know, unlimited spending. I mean, it's sort of extraordinary. Even as this has just started to only get off the ground, you're already seeing companies from all over the US saying, hey, we have an idea, we have an idea, we have an idea.
And it's like, you know, it's just seen as this essentially you know, cashapalooza, where they could just get tons of funding to be able to work on these systems and try to pursue technology, like I said, doesn't exist yet.
All right, So three years from now, we'll see what happens. NICKA, I am curious you understand this stuff. What do you think is going to get done first, the dome or the retro fit on the plane that may come from Qatar.
Well, I mean it's a great question because in some ways it shows you how truncated that timeline is. I mean, the conversation around the plane from Qatar, you know that they're saying they're not even going to be able to get that plane retrofitted to be able to go into service before or Trump leaves office in twenty twenty eight.
So you know, you have one plane that's the timeline is already there saying it's going to be it's unrealistic to have that done, and then you have a whole space based interceptor system whose technology doesn't even exist, much less less contracted, much less deployed. Three years is an awfully short timeframe for.
That interesting times.
Hey, thank you so much.
We know a lot coming at you as always, but Nick Wadams is a voice we always want to check in with. He's Bloomberg News National Security Team leader joining us from.
Our bureau in DC.
Nick, thank you so much.
You're listening to the Bloomberg Business Week Daily Podcast. Catch us live weekday afternoons from two to five eas during Listen on Applecarplay and Android Auto with the Bloomberg Business app, or watch us live on YouTube.
The market's exactly where I want to go right now? Is Carol mentioned near our session lows? Right now the S and P five hundred down about nine tenths of one percent. We've got with us Eric Wiener. He's Bloomberg News Senior editor for Equities Americas. He joins us here in the Bloomberg Interactive Brokers studio.
Eric.
When I was preparing our interview with you earlier today, I was planning to talk about what happened yesterday because it was a little bit of a wild day. We all thought that equities would fall and that bond yields would surge, and that happened in the early part of the day. Then the dip buyers appeared to come in. We could talk about that in a few minutes, but first I want to talk about the reversal, not a reversal, but sort of the leg lower that we saw in
the last hour. What do we attribute this to.
Well, probably the best place to look would be Tesla's chart. If Musk has been out talking today, he's been talking more about his companies and on a rival network, will say he said something to the effect of the future. He reiterated that the future is in robotaxis. And whereas robotaxis were seen as a positive for the company, that's kind of flipped because of the amount of some cost that goes into developing it. And then a lot of a lot of people who started asking the question about
regulating all of this and ensuring all of this. And there are many, many, many pieces that go to creating a robotaxi environment, and we don't know if Tesla is going to be the company that does it and where those costs go.
And I mean, if you go to Washington, d C. Well, I won't say if you go to Washington, d C now because I don't know if they're there yet, but I know they're on their way there. These are the waymo cars. Carol her mind blown last week.
The week closed my eyes and like on the whole twenty twenty five minute run.
Once, I've been saying you got to try one of these things. I tried one in San Francisco on the fall. It was amazing.
Loved it.
At night, I'm like, would I feel comfortable? I was kind of blown away by it, and I loved it was clean, it was easy, no music if.
I didn't want it.
So you were in a Jaguar that was powered by Google's technology. I was not in a Tesla. That's the point. If I was in a Jaguar, would be happy. But they are a nice cars.
The flip side of that, we can all see the base case for it. You know you're out late, you don't want to drive home, and your car just takes you there, or you know the city is you know has plenty of cabs and you don't have to worry about anything. They come right over. The question is our whole system is built on liability, right, So the whole idea of ensuring something is being able to point the
finger it oo's to blame. So if you're in the backseat having had you know, a couple too many drinks and are just doing what you're supposed to do with what you bought the car for and then it t bones somebody else, who pays for that accident? Who's responsible?
It's such a basic question that I've never actually considered, well.
And this is where this is where a somebody who's going to bet on that goes because if that infrastructure is in place, then of course, yeah, you know, Waimo and all of these things become national the idea of us having self driving cars becomes completely you know, reliable. But without that, we're still in a you got to drive your own car world, or you need to figure out who is going to be responsible to the company take that, How do we how do we do the
insurance for that. We have to re regulate a whole bunch of things before that can become a national reality. And if you're putting if you're one of the most important stocks in the market, and you're putting a bunch of money behind this and there isn't that background there, the risk of that turning into a sunken cost is very real.
Yeah, it's kind of fascinating.
It's funny because we do these gainers into winners and losers. And Tessa was a gainer for me because it was up you know, more than three percent earlier in the session. And now I'm like, okay, I got to kind of pull the yank this one, because it's just pretty much sticking around unchanged or it's even got into the red a little bit. But it's a really good point, I
do think about it. It was interesting when I was in the Waimow and there was at a point where a biker, know, kind of scooted alongside and then.
Terms we prefer the term cyclist unless you're talking about a guy on a motorcycle, like it was a cyclist.
And I was watching how the car like navigated and I was even watching it was impressive, wasn't it. It was pretty impressive And I was like, whoa, okay, saw it like stayed around, you know, around also started there like with yellow lights, like kind of went through some yellow lights, and I was like, hmm, how did.
I feel about that?
But it was the ride was smooth.
But you're right, there's so many questions, right, and if there's a lot more on the road, does that make the road more safer or does it create more variable But I don't know.
Poretically, theoretically, when you talk to people who are involved in mass producing cars that that actually is safer because they're all going to travel at the same speed and they're going to keep the same gaps and everything track together. But technology is not perfect, it is not infallible. So when and it's not if, it's when a circuit goes a little haywire, who catches the black aim for that?
And our society is very very clear on blame. And so when you don't have that you and you have something that's doing sixty miles an hour and can kill someone, it becomes a much disier proposition.
Isn't a product liability? Yes?
It actually interested and personal and if you hurt somebody, good luck.
And look, we've seen this happen over the last couple of years as different companies have experimented. I mean there's a company that doesn't even operate wait the way it used to operate because of issues that happened when it
was testing these vehicles in San Francisco. And even on Reddit, the weaimo reddit threads have examples of when the car hasn't necessarily not necessarily crashed or anything, but when something has gone wrong, like there's examples of it just going around and around it for example, Yeah, yeah, yeah, we've all clitched.
It's interesting even the pickup, you know, is that kind of a for work a resort And it was like the guys even there said, like, the car may just kind of park somewhere.
Because it can.
You'll find it because it's not like a human. This is why I talked to somebody who works in AI. I was saying, I would love for this to come to New York and he was like, the challenge with this happening in New York is there aren't very many legal safe places for them to pull over, yeah, and pick people up. And it's the truth. I mean, if you think about the way we pick up cabs and ubers and lifts. Here, we're walking into the middle of the street and they're stopping. It's all about I mean,
and you can't somebody do it but it's nuts. Well, no, it's absolutely insane. No, that's what I mean.
Like, it's all about us interacting with the person who picks us up. And when you have cars that are just pulling in by themselves, you don't know how this is going to work. And that's really what it's about. If you're sinking your money and this is a company that builds cars, you're sinking your money into something that you don't know how it's going to work. That gets dangerous.
Okay, So this is all about Tesla.
Well, I think the last hour has been about Tesla.
That's interesting because there's the chart.
It's it's the one in the SMP that really it's almost.
Two percent of the S and P five hundred terms of waiting, it's about a little bit more than it's almost three point two percent of the Nasdaq one hundred three at move.
On our system, you can see that like basically the whole MAG seven is on is in the red. Google got hammered earlier as well, so it's like sort of a tech risk off. But like the big turn was in Texa where it had it had gone down when Musk was talking from to us and it went flying down and then it came back up and now it just dropped like a stone.
Okay, yeah, good point. I mean, look, six out of the seven MAG seven are in the red. Tesla shares were up earlier in the session. They're still up about half a percentage point, but a far crytit.
They were like up three. Yeah, that's big, big move on the SMP.
Hey, I want to go back in time a little bit and talk yesterday, which was actually the plan before we saw things move a little lower. What would happened yesterday because we thought that because of this Moody's downgrade, we'd see this certain tone with the trade that didn't end up coming to fruition.
So well, the bond market is hard to figure because that actually should have happened, and it did. I mean, yields, you know, jumped, and stock sort of responded. What we saw in the market was the highest retail buying that we've seen in I think it was over a decade, some absurdly strong amount of retail buying up until twelve thirty. So basically as that market sold off, retail stepped in
and bought every inch of it. So whereas we were positioning like you, we were thinking like you, you know, okay, well it's a down day and it's probably going to stay down. Instead, it turned into this you know, V shape recovery where all of a sudden it sort of gets this lift and by the end of the day we're in the green. But there is so little conviction in this market right now that everything's on a hair trigger. So Musk saying something about robo taxis and suddenly everybody
sells it off. There's just this sort of waiting for the other shoe to drop feel to everything, and then you have retail buying their dip, and the question is how much longer they can when the SMP is approaching six thousand six, when you're at fifty nine and yeah, and so you've come all the way back. How much more strength does retail have to keep this going because the institutional guys are on the sidelines and they cannot buy in at these levels, so they have to sit
Why can't they buy in? Well, because if you're timing this and you're questioning whether it's going to go higher, your risk is enormous. Buying in right now. You're much better off waiting for yesterday's one percent drop buy that you know, you wait for some sort of announcement that is going to temporarily take the market down two percent.
You buy there. But if you were looking at things a month ago and you were like, if we get up to six thousand, this is amazing, and then we do it, well, now you buy in and you're at it. You're buying in at a level where it's really dicey whether you're going to go higher, and there's a strong chance you're going to go lower, So the entry point is not attractive. To somebody who's actually building a portfolio.
If you're just trading in and out during the day, doesn't really matter, and that's what you see and you're acting reacting to the way the charts look. But if you're actually putting positions on in your portfolio, right now, stocks are pretty fully.
Valued, right, It's like, Okay, what's the next catalyst you can really trade on definitively? And I keep thinking about, Okay, ninety days out in terms of the tariffs, like that's ticking.
We got to wait for that.
I mean, there's a lot of issues that we have to wait for, right, Yes, Eric to kind of understand, Okay, so what's kind of the next backdrop for It's the economic term tread.
It's the economic data, right, So we're gonna have a jobs report coming up, We're going to be having you know, pc CPI all that sort of stuff coming. I don't know that anybody is expecting a June rate cut from the Fed anyhow. Yeah, I mean, I think we're down to September if if at all. But it's really it really feels like people are waiting. When I say people, I mean Wall Street pros are kind of waiting for the confirmation to come that the economy is weaker than the market is playing.
We've been hearing for weeks about this idea of empty shelves coming that hasn't materialized. And the pause that we saw between the tension with the US and China could perhaps be some sort of reprieve. But in the background, Eric I can't help but think we're still in a trade war.
Yeah. Well, and it's see so we go back to COVID and it's like, we remember.
What that was like, and everybody says, oh, we don't want to go back to that.
But if if you look at like the seventies or like periods where there was very slow growth and high inflation, it does mean that certain things, there are shocks and certain things, but overall, it's just the economy doesn't move, and that's what people are fearing. It's not so much. I mean, obviously, you know, walking into Target and just seeing empty shelves, well that's you know, that's a huge problem. But just you're paying ten percent more on everything. Nothing
is on sale. Your meat is more expensive, your groceries are more expensive. Everything you buy everywhere you go, it's more expensive. And what happens then, is people just with trench. You know, It's like each individual decision happens and people go, Okay, well I'm gonna pull back, and that hits earnings and that's when it starts spreading. So too, if you're a trader, you're looking at the clues that are going to get you to those earnings that are then going to send you lower.
Yes, okay, off to the next earning cycle. But I think about what Lebby Cantralla, Pimco's at two, the same thing like Tyris. We're going to be in a higher tariff environment and that's that's going to have an impact. Eric Wiener, thank you, as always, Bloomberg New Senior Editor of Equities Americas.
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