Trader Leaks

Musk Says New Tesla Factories Lose Billions of Dollars Ahead of Ramp Up

According to Bloomberg News, Elon Musk stated that Tesla, Inc. (NASDAQ:TSLA) is losing “billions of dollars” from its new plants in Germany and Texas as it tries to ramp up production, in a video interview with Tesla Owners of Silicon Valley posted online Wednesday.

Earlier this month, Musk announced its decision to cut costs by laying off 10% of its salaried workers over the next three months, which represents about 3.5% of its global workforce.

In the May 31 interview, Musk said that the company has struggled to quickly increase production in the Austin plant of Model Y SUVs that use the new 4680 cells and structurally integrated battery pack. Thus, the company decided it would also make Model Y SUVs with the older 2170 cells in Austin to keep up with the high demand for its cars, as noted in its April letter to shareholders. The struggles in getting the Austin and Berlin factories up and running were also a result of the company dealing with Covid-related lockdowns at its Shanghai plant.

According to Musk, the problems in the Austin factory are all going to get fixed real fast, but it requires a lot of attention and effort. The Berlin factory is in a “slightly better position” as the company outfitted it to build cars with its 2170 cells.

Coinbase Under a Dark Cloud as Rumors of Bankruptcy Surface on Social Media

The controversy surrounding Coinbase (NASDAQ:COIN) has worsened as a result of the extreme market conditions that have been present for the past couple of weeks. The largest crypto exchange in the United States was recently forced to laid off as much as 18% of its workforce, and not in the most pleasant way. Furthermore, the company inadvertently admitted that customer funds would probably be lost in the event of bankruptcy.

“General unsecured creditor” -New definition of customer in Coinbase admits users may lose crypto if exchange goes bankrupt | Fortune https://t.co/hj8Q7zawwX
— Kyle Keegan Radio () June 21, 2022

The post on the official Coinbase blog surfaced on June 14th, and featured an apology from CEO Brian Amstrong for the unexpected “downsize”, where he cited multiple reasons for the decision, including “growing too quickly”. An email delivering the bad news was sent to the personal email accounts of the affected personnel, and access to the Coinbase digital workspace was terminated in advance. “I realize that removal of access will feel sudden and unexpected, and this is not the experience I wanted for you”, lamented the Coinbase CEO.
Indeed, Brian Armstrong, who bought a $133 million mansion in Bel-Air to celebrate the New Year, felt that “employee costs are too high to effectively manage”. As a result, 1,100 employees lost their jobs in the blink of an eye.

Yen sinks to fresh 24-year low vs U.S. dollar

LONDON/NEW YORK (Reuters) - The Japanese yen plunged against the U.S. dollar on Tuesday to its lowest level since October 1998, as the Bank of Japan's ultra-loose monetary policy was in stark contrast with an aggressive Federal Reserve determined to stamp out soaring inflation.

The yen dropped to a new 24-year low of 136.330 per dollar, extending losses which have already seen it shed more than 18% of its value versus the greenback this year.

"You're still looking at a trade where there is aggressive tightening by the Fed while the BoJ has yet to really budge. There is potential here to see a further leg of weakness in the yen," said Edward Moya, senior market analyst, at OANDA in New York.

The currency lost more ground after the BoJ on Friday dashed any expectations of a change in policy and continued to stand alone among other major central banks in its commitment to ultra-easy monetary settings.

Instead it has been ramping up bond-buying to hold 10-year yields in a targeted 0% to 0.25% range. But despite its efforts, the yield remains at the upper end of that target

Earlier in the day, Japanese Prime Minister Fumio Kishida effectively gave the green light to sell yen when he said the BoJ should maintain its ultra-loose monetary policy.

He brushed aside calls for the policy to be tweaked to target rising living costs.

The yen's decline was also accelerated by some stop-loss orders broken around the 135.60 level, according to analysts, who noted New York traders had been absent on Monday, a U.S. public holiday.

By midmorning trading, the Japanese currency was at 136.20 yen per U.S. dollar, just off the earlier 24-year low. The yen was also down 1.3% to 143.77 per euro, its lowest level since June 9.

Germany risks recession as Russian gas crisis deepens

BERLIN/COPENHAGEN (Reuters) -Germany faces certain recession if already faltering Russian gas supplies stop completely, an industry body warned on Tuesday, as Italy said it would consider offering financial backing to help companies refill gas storage to avoid a deeper crisis in winter.

European Union states from the Baltic Sea in the north to the Adriatic in the south have outlined measures to cope with a supply crisis after Russia's invasion of Ukraine put energy at the heart of an economic battle between Moscow and the West.

The EU relied on Russia for as much as 40% of its gas needs before the war - rising to 55% for Germany - leaving a huge gap to fill in an already tight global gas market. Some countries have temporarily reversed plans to shut coal power plants https://www.reuters.com/world/europe/europe-may-shift-back-coal-russia-turns-down-gas-flows-2022-06-20 in response.

Gas prices have hit record levels, driving a surge in inflation and adding to the challenges for policymakers trying to haul Europe back from an economic precipice.

Germany's BDI industry association https://www.reuters.com/article/germany-economy-bdi-idAFL8N2Y82N7 cut its economic growth forecast for 2022 on Tuesday to 1.5%, revising it down from 3.5% expected before the war began on Feb. 24. It said a halt in Russian gas deliveries would make recession in Europe's largest economy inevitable.

Russian gas is still being pumped via Ukraine but at a reduced rate and the Nord Stream 1 pipeline under the Baltic, a vital supply route to Germany, is working at just 40% capacity, which Moscow says is because Western sanctions are hindering repairs. Europe says this is a pretext to reduce flows.

U.S., world stocks toast earnings, U.S. rate outlook

LONDON (Reuters) - U.S. stocks were indicating a higher open on Wall Street and world stocks eyed their first weekly gain in eight on Friday on a more upbeat earnings view and after this week's Federal Reserve minutes dampened fears of mega-high interest rates.

Optimistic U.S. earnings outlooks from department store operator Macy's Inc (NYSE:M) and discount chains Dollar General Corp (NYSE:DG) and Dollar Tree (NASDAQ:DLTR) boosted U.S. stocks on Thursday.

The Fed's minutes of its May meeting released on Wednesday confirmed two more 50-basis-point hikes each in June and July, but policymakers also suggested the potential for a pause later in the year.

"It's all flowed through from the FOMC (Federal Open Market Committee) minutes," said Giles Coghlan, chief currency analyst at HYCM.

"Investors were relieved there wasn't a 75 basis points hint."

Markets would focus on the April core PCE price index for the United States - the Fed's preferred inflation measure - due later on Friday for further signs on whether inflation was running hot, Coghlan added.

S&P futures rose 0.33% after the Dow Jones Industrial Average rose 1.61%, the S&P 500 gained 1.99%, and the Nasdaq Composite jumped 2.68% on Thursday.

The MSCI world equities index rose 0.41%. It was heading for a 3.2% rise on the week and an almost 6% recovery from 18-month lows set two weeks ago.

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