🤖⚡️ Tesla Robots are Coming! (maybe)
Welcome to the Sunday Primer,
Hope you are doing well.
Before we get into what you need to know for the week ahead, we posted a video yesterday on how someone lives off of $55k in the Bay Area! We even had a little surprise for her at the end of the video so please give it a watch and let us know what you thought of it!
- Humphrey, Rickie & Tim
Market Report
The big news this past week was the Federal Reserve raising rates by 0.75%. According to the Fed’s projections, the average Fed member expects another 1.25% in hikes by the end of the year (two more meetings left in the year) and a peak rate of 4.50-4.75%. We’re likely in for much more rate increases.
In addition to the rate hike, the Fed’s economic projects spooked the market. 17 (of 19) Fed participants see risks to growth to the downside, 18 see upside risk to the unemployment rate, and 17 see upside risk to PCE inflation.
The FOMC also revised GDP growth downwards in 2022 and 2023 more than expected and the unemployment rate is projected to increase to 4.4% by 4Q 2023, 0.7% higher than the current level. In the last 75 years, the US economy has entered a recession every time the unemployment rate has risen by at least 50bp in 12 months.
Forecast Ahead
Economic Data Release (Throughout Week)
Next week, we’ll get a slew of U.S. economic data including new home sales, consumer confidence, Q2 GDP final reading, jobless claims, and consumer spending.
Consumer sentiment improved slightly in September, as gas prices fell and inflation expectations softened. However, sentiment is still near all-time lows as persistently high inflation specifically in food and shelter rages on. Jobless claims are expected to increase as the Fed is actively hiking rates in an attempt to cool the labor market.
Tesla AI Day (Friday, September 30th)
AI Day is Tesla's annual event where the company reveals all of its upcoming projects and showcases its latest technology. While news about Tesla’s EVs makes up most of these events, it’s expected that Tesla will discuss Optimus, a humanoid robot, and other technologies like robo-taxis and new Superchargers.
Optimus is one of the most fascinating projects Tesla is working on. It’s described as a 5-foot 8-inch robot that can perform ‘boring’ human tasks such as carrying heavy objects. The eventual goal of Project Optimus is to deploy thousands of robots at factories and also explore uses for them in the home. Elon Musk has hinted in the past that the robot business could eventually be worth more than Tesla's car business.
The event will likely be streamed on the Tesla YouTube channel.
Corporate Earnings (Throughout Week)
September 27th - Cracker Barrel (CBRL)
September 28th - Jefferies (JEF)
September 29th - Bed Bath & Beyond (BBBY), CarMax (KMX), Rite Aid (RAD), Micron (MU), Nike (NKE)
What We Read Last Week
The Global Race to Hike Rates Tilts Economies Toward Recession (Bloomberg)
Streaming Wars: Netflix and Disney Wade in With Ads (Barron’s)
“They Have Nothing To Lose”: Why Young Iranians Are Rising Up Once Again (NYT)
U.S. Is Inflating Its Debt Away After Unprecedented Spending Binge