Morning Reads
- How a Brazen Plot to Rig Oil Auctions Cost Venezuela Billions
- Taiwan Quietly Urges US to Calm Rhetoric on China Chip Risk
- Yellen Says National Security Comes Before Economy in U.S.-China Relationship
- Fed Rethinks Loophole That Masked Losses on SVB’s Securities
- Credit Suisse Investors Challenge Switzerland’s $17 Billion Bond Write-Down
- America’s Inflation Antihero Gets a Makeover
- Billion-Dollar Hedge Fund Startups Rise to Pre-Pandemic Levels
- The Fabulous Yields, and Lurking Risks, of Money Market Funds
- Rates on C.D.s Are Soaring, but the High Rates May Not Last
- AI Is Coming for Wealth Management. Here’s What That Means
- Battle Over Labor Secretary Nominee Reflects a Larger Fight for Biden
- Franchisers, Facing Challenges to Business Model, Punch Back
- Home Prices in March Posted Biggest Annual Decline in 11 Years
- How Hard Lines in Fox-Dominion Deal Talks Suddenly Softened
- Tesla Increases Price of Model S, X in US After Shares Slump
- Apple Plans iPhone Journaling App in Expansion of Health Initiatives
- When Apple Comes Calling, ‘It’s the Kiss of Death’
- Google Launched Bard Chatbot Despite Ethics Concerns, Warnings It Was a ‘Pathological Liar’
- Luxury Fortunes Jump $93 Billion on Demand Boom for Hermes, Dior
- Americans Are Set to Spend More Than Brits at UK Hotels for Coronation
Todays Open Interest Change
PREMIUM
Prepper
Automakers have been scrambling for battery materials as they go all in on the electric age, which will require them to have a steady and consistent supply to power their vehicles. Ford (F) recently confirmed plans to invest $3.5B in a lithium iron phosphate battery plant with the aid of Chinese battery giant CATL, cross-town rival General Motors (GM) is still looking for a partner for its latest factory, while the U.S. just inked a deal with Japan for critical EV metals. Other suppliers and countries are taking notice of the market dynamics, which will define the remaking of the auto sector as it retires the internal combustion engine.
Snapshot: Chile's President Gabriel Boric said he would nationalize the lithium industry of the country, which is the world's second-largest producer of the key EV material and holds the globe's largest reserves. "This is an opportunity for economic growth that will be difficult to beat in the short term," he announced in a televised address. "Today we present a national lithium strategy that's technically solid and ambitious, with a Chile that distributes wealth we all generate in a more just way."
While the transfer to public-private contracts will take time, as well as approval from Congress in the second half of the year, Chilean lithium industry giants were hit by the news. In premarket trading, Sociedad Quimica Y Minera de Chile (NYSE:SQM) slid nearly 8%, while Albemarle (NYSE:ALB) fell 4%, despite saying that the announcement would have "no material impact on our business" (the two firms are suppliers to Tesla (TSLA) and several other major automakers). While most commercial lithium extraction is from salt-flat brines and mineral ores, SA's Trend Investing explores who is leading in the race to achieve successful direct lithium extraction.
Go deeper: State involvement in the key EV resources could make inking contracts and their conditions more difficult, or even lead to a kind of battery metal cartel. On the flip side, it may trigger a chain reaction of countries looking to safeguard their natural resources with the hope of boosting their economic growth or raising incomes. Mexico already nationalized its lithium deposits last year and Indonesia banned exports of nickel ore in 2020.
Shares are now trading at $163, but Cathie Wood's ARK Invest has issued a new $2,000 price target on Tesla (TSLA) that would value the EV maker at more than $6T in fewer than four years. "We want Tesla to scale its units because each one of them now represents the potential for a robotaxi, or a robotaxi fleet," Wood told CNBC, saying that from a margin point of view, the "robotaxi service would be more like a SAAS business." Not surprisingly, Wood added TSLA shares to the ARK Innovation ETF (ARKK) on the dip last night, and continues to be the biggest holding in her flagship fund. Speaking of Elon Musk's companies, another one of his ventures made headlines yesterday after SpaceX's Starship rocket exploded minutes after its first flight. Tesla is also changing vehicle model pricing - again. (50 comments)
In a speech at the Johns Hopkins School of Advanced International Studies, Treasury Secretary Janet Yellen laid out the next phase of the Biden administration's relationship with China as tensions heat up between the two sides. "We will secure our national security interests and those of our allies and partners," she declared. "These national security actions are not designed for us to gain a competitive economic advantage, or stifle China's economic and technological modernization. The United States will assert ourselves when our vital interests are at stake, but we do not seek to 'decouple' our economy from China's." Friction between the world's two largest economies already lingers over areas like trade, and bigger economic risks are at stake with a battle over access to key cutting-edge technologies like the escalating semiconductor war. (16 comments)
Google (GOOG, GOOGL) is merging two of its artificial intelligence research efforts amid a scramble to keep up with also-scrambling rivals in the exploding field. The company will combine the Brain team from Google Research and its DeepMind unit, bought in 2014, into a single group, called Google DeepMind (here are some of their past accomplishments). Google has been "AI-first" since 2016 and "along the way, we’ve been lucky to have two world-class research teams leading the entire industry forward with foundational breakthroughs that have ushered in a new era of AI," said CEO Sundar Pichai. Will AI opportunities help Google's stock rebound? Check out the latest SA article from Investing Groups Leader Ahan Vashi. (15 comments)
Today's Markets
In Asia, Japan -0.3%. Hong Kong -1.6%. China -2%. India flat.
In Europe, at midday, London +0.2%. Paris -0.1%. Frankfurt -0.4%.
Futures at 6:30, Dow flat. S&P +0.1%. Nasdaq +0.1%. Crude -0.1% to $77.33. Gold -1.1% to $1996.10. Bitcoin -2.9% to $28,044.
Ten-year Treasury Yield -2 bps to 3.53%
Today's Economic Calendar
9:45 PMI Composite Flash
1:00 PM Baker-Hughes Rig Count
4:35 PM Fed's Cook Speaks on Economic Research
Companies reporting earnings today »
What else is happening...
Ruling expected after SCOTUS extends pause on abortion pill curbs.
AT&T (T) suffers worst drop in two decades as cash flow dries up.
Existing home sales fall more than expected in March.
Credit provisions, expenses increase at American Express (AXP).
Amazon (AMZN) launches anti-counterfeiting exchange.
BuzzFeed (BZFD) shuts down news unit as part of heavy layoffs.
Crude reverses all gains that followed Saudi-led production cuts.
United Airlines (UAL) outlines delays for Boeing (BA) deliveries.
Social watch: Twitter begins removing legacy blue checks.
Judge extends stay on J&J (JNJ) talc claims for another 60 days.