Quest’s Profitable Moment
It’s the final edition of the Profitable Moment newsletter, and what better topic than personalities whose ramblings go wrong.
I’m going to focus on one person in particular.
I’m speaking of Elon Musk.
The pressure was on the Tesla (TSLA) boss to answer questions about his company’s financial health. But when they were asked, Musk decided some of them were “dry” and “boring,” and moved on.
It was a shocking performance for a man who is normally engaging and communicative.
The pressure from both media and shareholders over production of the Model 3 is obviously wearing on him.
But his outbursts have cost both him and shareholders. Tesla stock dropped 5.6% on Thursday, wiping $2.8 billion off the the company’s market value.
Elon Musk doesn’t care. And why should he? He’s a billionaire building spaceships and cars of the future. Unfortunately, the rest of us do. And whether or not you own shares in Tesla, Musk’s tone could be categorized in a range from dismissive to just plain rude.
But that’s not the main issue.
The question we should be asking is this: Is Elon Musk crumbling under the pressure?
This is not a criticism of him or his character. Everyone has a breaking point, and Elon Musk’s threshold is a lot higher than it is for the majority of us.
Is he doing too much? Well, only he can answer that. Musk has done things that no one else ever thought was possible. He has transformed society and helped the entire planet leap into the future.
Even if Tesla goes bankrupt — which I don’t think will happen — Elon Musk will dust himself off and do even greater things.
Elon, all I ask is this: If you need to, slow down just a bit. You’ll thank yourself in the long run. (And you’ll allow the rest of us to try and catch up.)
That’s a wrap for the Quest’s Profitable Moment newsletter. I’m not slowing down, but I am refocusing my own numerous duties.
“Quest Means Business” and “Quest Express” aren’t going anywhere. CNN’s “Business Traveller” is still going strong.
And whatever you’re up to in the weeks ahead, I hope it’s profitable.
US and China open talks to avoid a trade war
A team of President Trump’s top advisers has arrived in Beijing for two days of talks intended to stave off a trade war between the United States and China. The visit follows months of rising tension and threats by the two countries to impose tariffs on tens of billions of dollars’ worth of each other’s exports. American officials want China to take steps to reduce the trade deficit, provide more access to markets and protect intellectual property. Concerns about China’s growing tech dominance are also at play. But experts warn that tariffs won’t slow China’s rise toward becoming a tech superpower. — Julia Horowitz
How long will the US recovery last?
The recovery from the Great Recession won’t set any speed records. But the slow, steady economic expansion is now tied for the second-longest in American history. The very fact that the economy didn’t roar back to life from the 2008 crisis extended the life of the recovery, preventing it from overheating. Yet there are growing concerns that a recession could emerge in the next two years. Economists are already warning Washington’s tax cuts and spending surge could accelerate already rising inflation. That’s why Guggenheim’s Scott Minerd warns, “This is the rally to sell, not to buy into.” — Matt Egan
Apple showers investors with cash
Apple (AAPL) plans to buy $100 billion of its own stock back from investors. The most valuable company in America made the announcement after it spent $22.8 billion on stock buybacks in the first three months of this year — more than any company in any quarter in American history. Like other American companies, Apple is using the extra cash from the Republican tax cut to reward investors. US companies spent more than $246 billion on stock buybacks this year, according to research firm Birinyi Associates. That’s up 31% from the same point last year. — Danielle Wiener-Bronner
The US dollar is starting to look mighty again
Just a few weeks ago, the US dollar was falling. Nike (NKE), FedEx (FDX) and other multinationals were touting the benefits of a weaker greenback, which makes their products less expensive in foreign markets. No more. The dollar has roared back lately as investors bet on more interest rate hikes from the Federal Reserve. Executives from Apple and Royal Caribbean (RCL) noted in earnings calls that the dollar may take a bite out of their international profits. It will be interesting to see how Trump reacts: He said in January that the dollar will get “stronger and stronger.” It looks like he was right. But that may do more harm than good for big US companies, the stock market and the broader economy. — Paul R. La Monica
The Fed left interest rates alone but said that inflation is moving higher.
Paul Krugman says last year’s tax cut is a “nothing burger.”
Jobs report: Economists are expecting another solid month of gains when the US Labor Department releases its April report on Friday. The unemployment rate is 4.1%, a 17-year low.
Buffettpalooza: The Berkshire Hathaway (BRKA) annual shareholders meeting is Saturday in Omaha, Nebraska. Investors will be watching for anything Warren Buffett has to say about Wells Fargo (WFC) — and who might succeed him one day.
CNNMoney (New York) First published May 4, 2018: 12:01 AM ET