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On April 26, according to the Wall Street Journal, in order to simplify the negotiations on reciprocal tariffs, US negotiating officials plan to use a new framework developed by the Office of the United States Trade Representative (USTR), which lists major categories of negotiations, such as tariffs and quotas, non-tariff trade barriers, digital trade, product origin principles, economic security and other commercial issues. In these categories, US officials will put forward specific requirements for individual countries, but people familiar with the matter emphasized that this document may also be adjusted at any time. People familiar with the matter said that the United States initial plan is to negotiate with 18 major trading partners in turn over the next two months. The initial plan is to alternately participate in the talks with six countries per week for three weeks (six countries in the first week, another six countries in the second week, and another six countries in the third week) until the deadline of July 8. If US President Trump does not extend the 90-day suspension period he set by then, those countries that cannot reach an agreement will begin to face reciprocal tariffs.On April 26, after the United States announced additional tariffs on goods from many countries, Peruvian business people expressed concerns that the US governments extreme measures would disrupt the global trade order and may even trigger a global economic recession. Alvaro Barrenechea Chavez, vice president of the Peruvian-Chinese Chamber of Commerce, said that the negative impact of the US tariff policy has begun to emerge and hoped that the US government would rethink. Recognizing the importance of countries working together to promote development, I think this is the best way to become a true "world citizen."Market news: Musks xAI company plans to raise about US$20 billion in a financing round.Conflict situation: 1. Ukrainian top commander: Russia tried to use air strikes as a cover to increase ground attacks, but was repelled by Ukraine. 2. Ukrainian Air Force: Russia launched more than 103 drones in the night attack on Ukraine. 3. Local officials said Ukraine launched an attack in the Belgorod region of Russia, killing two people. 4. The local governor said that Russia launched an attack on the Dnipropetrovsk region of Ukraine, killing one person and injuring eight people. Peace talks: 1. Trump: ① The situation between Russia and Ukraine is gradually becoming clear, and they are "very close" to reaching an agreement. ② Ukraine is unlikely to join NATO. ③ Ukraine has not yet signed the rare earth agreement and hopes that the agreement can be signed immediately. ④ It is foreseeable that the United States will conduct commercial cooperation with Ukraine and Russia after reaching an agreement. 2. Russian Foreign Minister: Russia is "ready to reach an agreement on Ukraine." 3. Russian Presidential Assistant Ushakov: Russia and the United States will continue to maintain active dialogue. 4. Russian Presidential Assistant: Putin discussed the possibility of resuming direct negotiations between Russia and Ukraine with the US envoy. 5. The differences between the United States, Europe and Ukraine are clear. The documents show that European countries and Ukraine have raised objections to some of the US proposals to end the Russia-Ukraine conflict. 6. Market news: As part of the peace agreement, the United States asked Russian President Putin to abandon the demilitarization requirement. Other situations: 1. President of Hungarys OTP Bank: We hope to return to all business areas in Russia after the (Russia-Ukraine) conflict ends. 2. Ukrainian President Zelensky: US ground forces are not necessary for Ukraine. 3. Trump said Crimea will remain in Russia, Zelensky: Never recognize it. Agreeing with Trumps view, Crimea cannot be recovered by force. 4. NATO Secretary-General Rutte met with Trump and senior US officials to discuss defense spending, NATO summit, and the Ukrainian conflict.Rising global trade risks, overall policy uncertainty and the sustainability of U.S. debt top the list of potential risks to the U.S. financial system, according to the Federal Reserves latest financial stability report released on Friday. This is the first time the Fed has conducted a semi-annual survey on financial risks since Trump returned to the White House. 73% of respondents said that global trade risks are their biggest concern, more than double the proportion reported in November. Half of the respondents believe that overall policy uncertainty is the most worrying issue, an increase from the same period last year. The survey also found that issues related to recent market turmoil have received more attention, with 27% of respondents worried about the functioning of the U.S. Treasury market, up from 17% last fall. Foreign withdrawals from U.S. assets and the value of the dollar have also risen on the list of concerns.

Tesla's results exceed expectations; Elon Musk does not see any demand difficulties

Charlie Brooks

Jul 21, 2022 10:59

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Tesla (NASDAQ:TSLA) Inc reported a quarterly profit above analyst forecasts on Wednesday, as a series of price increases on its best-selling electric vehicles helped to overcome production challenges caused by COVID-19 lockdowns in China.


Elon Musk, the CEO of Tesla, claimed on a conference call that he expects inflation to begin declining by the end of the year and that Tesla has no demand issues.


Despite what he dubbed "embarrassingly expensive" vehicle prices, he rejected the claim that Tesla's popularity was affected by the global economic crisis. The price of the long-range form of Tesla's Model Y in the United States has grown by more than 30 percent since the beginning of 2021, to its current price of $65,990.


The company forecasted a "record-breaking second half" of the year and maintained its goal of a 50 percent average annual increase in vehicle deliveries over a multi-year period, but did not disclose specific delivery targets for 2022.


During after-hours trading, Tesla's shares increased by almost 1 percent. Since hitting a high point in November, the stock price has decreased by about 40 percent.


Tesla's China facility concluded the second quarter with a monthly production record. Musk added that new factories in Texas and Berlin were projected to produce 5,000 vehicles per week by the end of the year, with Berlin producing 1,000 vehicles per week in June.


Musk has previously referred to the proposed facilities as "gigantic money furnaces" and stated that he had a "bad feeling about the economy."


Following Tesla's earnings release, Morgan Stanley (NYSE:MS) wrote in a research, "We are prepared for near-term margin challenges due to (new) problems with scaling up additional production, particularly in Berlin."


Executives acknowledged a persistent lack of older-generation microchips, but maintained that there were no significant concerns with the supply of chips and batteries, barring unplanned COVID-related shutdowns.


The EV maker posted a quarterly adjusted profit of $2.27 per share, compared to the average estimate of $1.81 per share among industry experts.


Due to inflationary pressure, the company's automotive gross margin fell to 27.9 percent, down from the same time a year ago and the previous quarter.


Jesse Cohen, senior analyst at Investing.com, commented, "Tesla's outstanding quarter is the latest indicator that the firm has succeeded at handling global supply chain and logistical challenges, weathering the storm better than most conventional automakers."

BITCOIN TO CASH

Tesla reported that it has converted around 75% of its bitcoin acquisitions into fiat currency, increasing its cash position by $936 million. Musk indicated on the conference call that the sale was undertaken to increase cash since Tesla was unsure of how long the COVID-19 lockout in China would endure. Tesla has not sold any of its Dogecoin-related holdings.


"This should not be seen as a decision on bitcoin," he continued, adding that Tesla is open to increasing its cryptocurrency holdings in the future.


Musk claimed in May 2017 that Tesla had no plans to sell its bitcoin holdings.


"The bitcoin losses emphasize an essential part of Tesla's investment case: its eccentric owner. Laura Hoy, an analyst at Hargreaves Lansdown, claims that Musk's attitude is beginning to raise governance problems as a result of his company-benefiting innovation.


In the second quarter, overall sales dipped to $16.93 billion from $18.76 billion in the previous quarter, breaking Tesla's trend of posting record revenue in previous quarters.


Analysts projected a sales of $17.10 billion, according to data from IBES and Refinitiv.