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Tesla needs a pep talk

January 3, 2019
Dow Jones: 23,346 (+0.08%)
S&P 500: 2,510 (+0.13%)
Nasdaq: 6,666 (+0.46%)
Bitcoin: $3,889 (+1.81%)
10-Year Treasury: 2.620%


Didn't get the invite to a billionaire's robot-themed Artificial Intelligence party with Paris Hilton? We hear ya.

Stocks didn't feel the love either, barely nudging up on Day #2 of 2019.

1. Tesla's reducing car prices by $2K 

Aaaaaand it's gone... Tesla broke its New Year's res Tuesday, announcing it didn't deliver enough cars in the 4th quarter (analysts expected 92K, Tesla gave 'em 91K). And it's cutting the price of all its cars by $2K. That's never a good sign, so shares tanked 7% Wednesday.

Elon's $35K promise is really, really hard to keep... The CEO said 3 years ago the Model 3 would be $35K (cheaper than the life savings-priced Model S or Model X). After cutting the price by $2K, Tesla says the base, simple, no-frills Model 3 is now $33,450 -- But check out the fine print:

The Takeaway: Tesla's not a car for normal folk (yet)... It's brought sexy back to electric cars (they used to be un-datable @ToyotaPrius). But sales of its pricy models so far have targeted wealthy people. For Tesla to justify its big-car company valuation (it's worth more than Ford & GM), it will need to attract more not-absurdly-rich buyers. 
 

2. Apple predicts a holiday sales drop (first time in ever)

It's time we had "the talk"... Apple's CEO Tim Cook finally told investors what they awkwardly felt was coming -- It estimates revenues for the 4th quarter will be ~9% less than it said 60 days ago. And Q4 is the most important Q there is (one of Santa's reindeer only does Apple stuff).

  • 📉Apple stock fell 7%, after the report, so it's down 38% since October. It's now the #3 most valuable company, behind Amazon and Microsoft


Trade War & Upgrade War... Tim already knew fewer people would upgrade iPhones because the selfie your iPhone 8 takes is already gorgeous. And he blamed cheap $30 battery replacements. But the downside surprise was China: Economic decline from the Trade War is slowing down spending by China's 1.5B people more than expected.

The Takeaway: This is really a China story... Official Chinese government statistics show their economy is doing just fine. But public companies are required by US law to share numbers that tell the truth, and Apple's outing China as having a slowdown. Other companies that rely on China for sales growth tanked too:

  • Stocks of NVIDIA, AMD, and Caterpillar all dropped by over 3%

3. McDonald's copycat menu items get leaked 

"They're light and crunchy on the outside... and soft and warm on the inside." McDonald's leaked internal memos reveal it's whipping out cinnamon-sugared "Donut Sticks" in 2019. Sounds/looks/tastes/feels/smells a lot like Dunkin's recently concocted "Donut Fries". And there's a reason for that.

Ronald now wakes up with 700 calories of hash browns... McD's is tripling down on breakfast like never before -- Donut Sticks are just the 2nd new breakfast menu item in the past decade. And it's all-day breakfast menu is just over 2 years old. It's because customers love that. Just one catch*

  • *McDonald's franchise owners hate it -- Your Egg McMuffin is less profitable than a Big Mac. 


The Takeaway: Breakfast is the most competitive meal of the day... Fast food already owns lunch, dinner, late-night, and extra-late-night in most of the country. But breakfast is its trans-fat infused Holy Grail. So McD's is cooking up more because so is the competition:

  • Starbucks: Chicken Sausage Biscuits
  • Dunkin': Wake-Up Wrap
  • Taco Bell: Breakfast Quesadilla
  • Burger King: French Toast Sticks
  • Chick-Fil-A: Chicken Egg Bagel
  • Chipotle: Breakfast burritos coming soon


What else we're 'Snacking

  • Venture: Mary Meeker's new VC fund will be called Bond, run entirely by women, and raise $1.25B
  • Takeoff: Qatar Airways bought 5% of China Southern Airlines because China's travel market will pass the US in 4 years
  • Pharma'd: Drugmakers raised prices on hundred of medicines on New Year's Day
  • Mo' Money: Minimum wages just rose in 19 states and 21 cities
  • Social-ish: New app tracks the colors of your Insta posts


'SnackFact of the Day
The number of exclamation points needed to convey genuine enthusiasm for something is 3 

Submitted by Emma S. (Miami, FL)
Send Us One


Thursday

  • Data: Weekly Jobless Claims, Consumer Confidence Survey

New Year's Resolution Option #2:

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Today's MarketSnacks Yearly Podcast

  • Our 3 Takeaways from 2018: The big things you need to remember before 2019's resolutions 
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