Contextualizing auto tariff news for investors (0:20). Tesla's Q1 delivery data (2:20). Tech sluggishness and bright spots (4:15). Novo Nordisk's decline, weight loss drug saturation (5:15). GameStop slide, Bitcoin strategy (6:30). Gold, Bitcoin, volatility and inflation (9:40). Critical macro data points (13:20).Show links: The US will not enter a ‘demand-driven’ recession – says BCAGameStop slides 25% as Bitcoin buzz flips to investor skepticismStart the tariff engines: What does 'Made in America' mean?Episode transcripts: seekingalpha.com/wsbSign up for our daily newsletter here and for full access to analyst ratings, stock quant scores, dividend grades, subscribe to Seeking Alpha Premium at seekingalpha.com/subscriptions.
Chapter 1: What are the latest updates on auto tariffs?
Brian Stewart, our director of news here at Seeking Alpha. Welcome back to the show as we close out almost another month and head into April.
Hey, how you doing?
Great to have you. So lots of news of tariffs. Curious what's coming in the week ahead with this April 2nd date. What are you most focused on this week and looking ahead to next week?
So as long as you mentioned tariffs, we might as well get that out of the way. The big news in the last day or two has been auto tariffs have kind of creeped up as the main headline. So GM is down about 7% as we're talking today. Ford and Toyota are both down about 3%. So there's a new kind of sector that's being sucked into the tariff debate as the kind of moving target that tariffs have become.
They're the new kind of face of it. I think one of the interesting things to take away, and I think this is just sort of general investing advice, is like I said, GM's down 7%, but Ford's only down 3%. So there's going to be winners and losers, or you could say more loser, less loser, in some of these situations. And so it makes it a stock picking situation.
So if you're looking at a particular sector that might be affected by these tariffs, you might want to look under the hood of some of those companies and see which ones are most exposed. As an individual investor, as you're looking at it, you might want to just use the stock price as a gauge of that kind of Like I said, GM's underperforming, going down faster than some of its major competitors.
So obviously the market has determined that GM is the most exposed to the tariffs that are coming in. So as an investor, you're coming in with that information as sort of your first take on it. And then I think your goal as an investor is to see to what extent the market might have overreacted to the situation.
So take a look at GM as just an example, see if you feel like that exposure is now priced into the market or view whether or not you think that the likelihood of the full tariff impact as priced in by the market is likely to happen.
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Chapter 2: How is Tesla's performance affecting investors?
not necessarily a strictly car company, but as promised last week, a stock that we may be talking about every week is Tesla, which did see some improved numbers this week, but a stock that's been in the news for its volatility and questioning of where it's headed long term or also short term and near term as well. What are you seeing out of Tesla this week?
So Tesla's coming back from the sharp drop it saw early this year. At one point, the stock was down 40% year to date. It's come back a bit lately. The next data point for that next week, we're going to get Q1 deliveries. Analysts are looking for about a 7% decline year over year from last year's first quarter. So that's taking into account some of the brand's impact.
from Doge and Elon Musk's activities with the Trump administration. And so the question comes, not necessarily those numbers. I mean, the stock is going to move next week, kind of whether it's better or worse than people had kind of feared. But the question becomes, is Q1 going to be the low, the heaviest impact on the brand from that, or whether there's going to be a normalization going forward.
So we're not obviously going to know that information for a little bit, but that's the question investors are going to be asking when they get that data. And then further from that, looking longer term, the Tesla story is less about its current EVs and the deliveries that are going to happen month to month or even for the foreseeable future. It's more of a technology plate generally.
So autonomous vehicles, robots, solar build out in general. So if you're looking at it from an investment point of view, you're kind of questioning to what extent Tesla can get those more futuristic technologies online in the near term.
And speaking of tech names and the tech sector, what are you seeing out of that part of the market these days?
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Chapter 3: Why is the tech sector experiencing sluggishness?
So it's still pretty sluggish. I think if we're looking at the turkeys, Broadcom is a standout. It's down about 12% in the past week. The main catalyst for that is Microsoft announced that it's scrapping some data center plans related to AI. So a lot of the AI infrastructure stocks were down, including Broadcom. Broadcom has exposure to those kind of big supplier projects. agreements.
So it's in a position where as these larger companies scale back their AI ambitions, it might be affected. So I think that speaks to the larger, the question of where we are in the AI cycle, if the trillions of dollars in build-out that people expected is going to happen at the pace they expected, or whether companies are going to look around and start to save cash a
having more modest ambitions for their AI build out.
Well, speaking of modest ambitions, we've seen a lot of news out of the weight loss drug makers. Talk to us about what you're seeing based on some recent trial data.
Yeah, so Novo Nordisk is an interesting stock in this space. It was down about 7% in the past week. This was part of a longer-term decline, so it's down about 45% in the past year and 22% in the past month. It's just touched a 52-week low recently. Part of this was earlier this month it had disappointing trial results for its next-generation weight loss drug.
There's also signs that it's sort of losing its first-mover advantage recently. companies like Eli Lilly are catching up in the space. So I think there's two things going on there. I think one is concern about saturation for weight loss drugs generally, and kind of wondering what the next big thing is going to be in that space. And then for
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Chapter 4: What challenges is Novo Nordisk facing in the weight loss drug market?
Novo Nordisk specifically, it's going to face some market share problems because it's starting to lose out a little to Eli Lilly, but also it doesn't have that next big thing clearly on the horizon right now.
One of the biggest, as you refer to them, turkeys of the day as it pertains to Thursday was GameStop. They had some news around Bitcoin. How would you articulate for investors what's going on over there?
GameStop's board determined that the company could buy Bitcoin as part of its investment strategy. So as a reserve asset, it can buy Bitcoin as opposed to bonds or whatever else its board had already approved. There was sort of an initial excitement about that, but I think that faded relatively quickly. I think there's concern that that's...
a desperation move where the company's fundamentals are such that it's trying to reposition itself as a bitcoin hedge fund in a way just sort of reinvest its cash um in an asset that it sees could go up obviously as an investor you might ask yourself why would i buy gamestop to get exposure to bitcoin when i could just buy So I think you can look at it two ways.
If you're looking at it from a GameStop point of view, it kind of has the stench of the dot-com bubble when every company just added dot-com to the end of its name. There's something of a trend following going on there. So I think there was a negative reaction to that once all was said and done.
If you look at Bitcoin, you and I have talked in the past about the near-term movement in Bitcoin versus the longer-term prospects for Bitcoin.
And so if you're a long-term Bitcoin bull, you can take this as a sign of further adoption as more and more companies view Bitcoin as a reserve asset in the way that instead of storing cash, you're just going to store the money in your quote-unquote bank account in Bitcoin. As that becomes more prevalent, then obviously that provides more of a floor. for Bitcoin.
And that ties into the idea of Bitcoin strategic reserve and other macro factors that are going to affect the asset longer term.
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Chapter 5: How is GameStop incorporating Bitcoin into its strategy?
Is the sense that GameStop is just doing a strategy, MicroStrategy slash strategy, strategy?
Yeah. I wish I had picked a different name because it sounds like not enough when you say strategy. The artist formerly known as. Yeah. The artist formerly known as MicroStrategy. I think that's the exact model that they're trying to match.
again as an investor i'm not sure why you wouldn't just buy bitcoin if you were a bitcoin bull i don't know why you'd kind of filter that through gamestop unless you had faith in the stock anyway which you wouldn't need the Bitcoin part to do. So I don't know. I guess from a GameStop's point of view, instead of holding cash, you can hold it in an asset that you view as going up.
Obviously, Bitcoin can be volatile too. So that can cause problems along the way as it does occasionally for strategy. I don't know. I mean, obviously it's up to the individual investor to kind of decide how they feel about it. But as you pointed out, the market seems to not have taken it in the best light.
And what would you say about this Bitcoin-gold conversation? Perhaps many using as, well, I would say certainly many using as an inflation hedge when it pertains to gold, but both of them certainly come into play when we're talking about uncertainty and volatility in the markets. There were price targets thrown out this week around gold for $3,500 in the coming year. What are your thoughts there?
What are you seeing out of both markets?
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Chapter 6: What are the long-term prospects for Bitcoin?
If you're just looking at trading, Bitcoin in no way is moving like an inflation hedge. You know, if you lay a A gold graph over a Bitcoin graph, they don't resemble each other at all. Gold, as you just point out, hitting new highs. People are very bullish, especially as inflation continues to be sticky.
And Bitcoin has never traded that way, even though that's one of the selling points for Bitcoin is that it's not affected by inflation. So it's a place to store wealth during times of inflation. It's never actually been used that way. At least there's no evidence that it's being used that way.
So in the near term, Bitcoin still moves like a risk asset as opposed to gold, which is sort of the anti-risk asset. As it stands now, I would see those as separate trading nexuses. Different investors are interested in Bitcoin than are interested in gold, even if theoretically there's some kind of overlap.
Is that an academic ivory tower theorizing around what Bitcoin could be but just isn't? Is that why it gets this kind of discussion around inflation even though it's not necessarily accurate?
Yeah, I mean, I think part of the complicating factor in terms of that is I don't know that Bitcoin saturation has reached a point where it can... That kind of strategizing can be a real leverage for the price. And by that, I mean... Not enough people hold it for it to be a real alternative to gold in that way. So the people who are buying Bitcoin are buying it for different reasons than that.
But like you're pointing out in kind of a theoretical sense and just sort of the structure of how Bitcoin works and the structure of how gold works, there is an argument that Bitcoin would be a better inflation hedge than gold. Because we're still mining new gold in the way that the Bitcoin mining operations are much more predictable than the amount of gold in the world.
Looking, you know, whatever timeframe far in the future you want to look, 10 years, 100 years, whatever, as long as... you sort of grant that Bitcoin is going to become sort of ubiquitous in people's portfolio, there could conceivably be a chance. Because eventually, if everyone who would want to buy Bitcoin eventually buys it, then there's nothing to push Bitcoin higher.
I mean, Bitcoin doesn't have earnings. It's not going to grow revenue. So there is theoretically at some point in the long, long-term horizon where Bitcoin sort of reaches a plateau. And at that point, when it hits that plateau, then yeah, maybe it moves like gold.
So it's just like your interest in Bitcoin is just sort of moving it around like a currency where you're holding dollars, you're holding Bitcoin, you're holding yen, whatever you think is sort of the best currency in that moment. But we're so far from that point at this point that I think the macro factors are
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