The CEOs of America\u2019s biggest banks have all taken a stab at providing a snapshot of where the economy\u2019s headed so far in earnings season.<\/p>\n
Elon Musk was more to the point. \u201cOne day, it seems like the world\u2019s economy is falling apart and the next day everything\u2019s fine. I don\u2019t know what the hell is going on,\u201d the Tesla CEO said on the company\u2019s second-quarter earnings call.<\/p>\n
The one thing Musk can be sure of, though, is that it\u2019s tough out there in the autos sector.<\/p>\n
But Tesla has taken some initiative in these challenging times. The electric-vehicle maker has aggressively cut prices in an intense inflationary environment. Its play was to grow volume and market share, accepting that margins would take a hit.<\/p>\n
When deflation eventually hits, other auto makers will cut prices\u2014but, in contrast, they won\u2019t enjoy any benefits from the margin pressure that will come with it. When the dust settles, Tesla will be in a stronger position.<\/p>\n
While Musk warned of \u201cturbulent times,\u201d stock market investors don\u2019t seem to be as concerned. The S&P 500 continued its run higher Wednesday and now sits less than 5% off its record closing high.<\/p>\n
The index is up 18% so far in 2023, and has climbed 27% from its low point in October.<\/p>\n
Granted, those gains have been driven by a handful of the largest mega-cap stocks\u2014including Tesla, which is up more than 135%. However, the S&P 500 Equal Weighted Index, which gives all stocks a 0.2% weighting, is up 9% so far this year. That\u2019s not exactly representative of turbulent times, either.<\/p>\n
In the absence of economic answers, the stock market is drifting gently along. Sometimes ignorance is bliss.<\/p>\n
\u2014Callum Keown<\/em><\/p>\n *** Join Financial News online editor Justin Cash today at noon when he talks to a panel of guests including KPMG\u2019s Kate Dawson, the Centre for Finance, Innovation and Technology\u2019s Charlotte Crosswell, and Herbert Smith Freehills\u2019 James Palmer about the City of London\u2019s position as a global financial hub. As listings head to the U.S. and deals dry up, regulators and politicians are trying to turbocharge growth in the sector by cutting red tape and spurring innovation. But will it be enough to get investors excited about London again? Sign up here.<\/em><\/p>\n Try your hand at this morning\u2019s Barron\u2019s crossword puzzle and sudoku games. For all games, including a digital jigsaw based on the week\u2019s cover story, click here.<\/em><\/p>\n \n Tesla\u2019s<\/span> What\u2019s Next:<\/strong> Tesla is spending money to raise output of battery cells and launch its new Cybertruck. CEO Elon Musk said the company continues to target 1.8 million vehicle deliveries this year, but production might slip slightly in the third quarter because of upgrades to its factories.<\/p>\n \u2014Liz Moyer and Al Root<\/em><\/em><\/em><\/p>\n \n Netflix\u2019s<\/span> What\u2019s Next:<\/strong> Netflix wants to boost more of its revenue from advertising, a business it entered last year. The company said Wednesday it wants to \u201cscale the business.\u201d The number of ad-tier subscribers has doubled since the first quarter.<\/p>\n \u2014Hannah Ziegler and Eric J. Savitz<\/em><\/em><\/p>\n Taiwan Semiconductor reported its first annual fall in quarterly profit since 2019 as it grapples with a slowdown in demand for electronic devices. It\u2019s a poor sign for rivals such as Intel, despite excitement about demand for chips to power artificial-intelligence tools.<\/p>\n What\u2019s Next:<\/strong> While it\u2019s true there is a market slowdown it likely won\u2019t disrupt the tens of billions of dollars being invested in chip-manufacturing plants. TSMC is sinking $40 billion into sites in Arizona as it looks to stave off Intel, which hopes its strategy of placing its foundries around the globe could attract clients nervous about the future of Taiwan.<\/p>\n \u2014Adam Clark<\/em><\/p>\n Carvana Revenue Rebounds as It Restructures Debt<\/h2>\n \n Carvana,<\/span> What\u2019s Next:<\/strong> While the number of vehicles Carvana sold in the second quarter fell 35% from last year, it has been cutting inventory to be more aligned with demand. Inventory was down 55% from last year. Carvana expects third-quarter vehicle sales to be about the same as the second quarter\u2019s 76,530.<\/p>\n \u2014Hannah Ziegler and Callum Keown<\/em><\/em><\/p>\n \n United Airlines What\u2019s Next:<\/strong> United is also expanding in Asia this fall, adding new flights to Manila and Hong Kong from the West Coast. Existing restrictions on flying through airspace over Russia and limits on the number of flights between China and the U.S. have affected growth in the region.<\/p>\n \u2014Liz Moyer<\/em><\/em><\/em><\/em><\/p>\n***<\/h4>\n
Tesla Beats Expectations as It Boosts EV Deliveries<\/h2>\n
\n income rose 20% in the second quarter as vehicle deliveries soared over last year and cost reductions compensated for price reductions for many of its models in recent months. Elon Musk\u2019s electric vehicle company is planning to expand production quickly.<\/p>\n\n
***<\/h4>\n
Netflix Subscriber Numbers Jump on Password-Sharing Crackdown<\/h2>\n
\n subscribers jumped 5.89 million after a crackdown on password sharing as second-quarter revenue came in slightly below expectations. The streaming giant sees third-quarter revenue of $8.5 billion, also below Wall Street\u2019s consensus, but said sales will pick up in the fourth quarter.<\/p>\n\n
***<\/h4>\n
Chip Maker TSMC\u2019s First Profit Fall in 4 Years<\/h2>\n
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***<\/h4>\n
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\n the used-car dealer, said it had its best quarter for adjusted earnings, as revenue beat expectations and it posted a narrower-than-forecast loss. It announced a $1.2 billion debt restructuring that will lower its annual interest expenses by $430 million for the next two years.<\/p>\n\n
***<\/h4>\n
United Airlines Beats Expectations as International Travel Booms<\/h2>\n
\n took flight on a surge in international travel during the second quarter, more than tripling its profit from last year. It raised its profit outlook for the full year, following the lead of Delta Air Lines as the aviation industry stages a postpandemic comeback.<\/p>\n\n
***<\/h4>\n