The Wall Street Journal reported Tuesday that more Americans are prone to canceling their streaming services than ever before — about 25% of subscribers have canceled three of the major services over the past two years, up from 15% just two years ago. Consumers have become more cost-conscious, and streamers are trying to counter that by introducing ad-supported tiers as well as teaming up with rivals to offer bundles of content, which of course was the original selling point of cable. It's never a good sign when the disruptor starts looking like the disruptee.
Tesla dropped its delivery results on Tuesday, and while it hit its targets for the year, the numbers also showed that its China-based rival BYD has just nosed out in front with its own delivery total. It's a less-than-desirable start to 2024 for Tesla, but other American EV-makers are doing worse.
Inside Lane
BYD already gained an edge over Tesla on vehicle production last year, but delivery numbers are the more important metric, and BYD clipped Tesla by almost 42,000 vehicles. BYD has a pretty chunky domestic market in China, where it sells roughly 90% of its cars, but more worrying for Tesla is the news that BYD is pushing for more international expansion this year. The company announced in late December that it's building its first non-China-based EV factory in Hungary. That said, Europe won't be an easy ride as EU chief Ursula von der Leyen launched a probe last year into China state-subsidized EVs.
Still, at least Tesla hit its own targets, plus Wall Street's expectations. Fellow US EV startup Rivian woke up with a much worse New Year's hangover:
Rivian's fourth-quarter deliveries declined 10% compared to the previous quarter, down to 13,972 vehicles. Meanwhile, its production figures ticked up 7.5%.
Down to Truck: Notably absent from Tesla's Q4 results were production and delivery numbers for the long-awaited and highly angular Cybertruck. After years of delays, Tesla delivered its first few Cybertrucks in November, but Bloomberg noted that the company didn't break out the truck's delivery numbers, but instead grouped it together with its Model S and Model X vehicles. Per Bloomberg, analysts are split on how many Cybertrucks actually made it to their owners last year, ranging from 200 to 5,000. For perspective, Ford sold more than 650,000 F-Series trucks in 2022.
The Blueprint for Raising Capital in a Challenging VC Market
It's true — venture capital activity is down from 2021 levels.
But that doesn't mean VC firms have retreated from the market altogether. Instead, they've simply become more discerning in the stories they back and the metrics they focus on.
BlackRock Still Leads US ETF Market, But It's Losing Ground
When you're king, everyone comes for your crown, except for on The Crown, where no one, it seems, could be bothered.
BlackRock, the world's largest asset manager, has been ceding ground in the US exchange-traded fund market to Vanguard and other smaller rivals, the Financial Timesreported on Tuesday. BlackRock may be younger, but Vanguard appears to be hungrier.
The Whole Package
ETFs are similar to mutual funds — instead of buying individual stocks, you're putting money into a basket of securities. A tech ETF could include Apple, Nvidia, Meta, and a whole slew of other companies. But ETFs tend to be cheaper, can be continuously traded throughout the day, and are often passively managed.
That ease of trading has helped build US-based ETFs into an $8 trillion industry. BlackRock still controls the largest piece of that pie, but its slice has shrunk over the past few years. As of November, iShares — BlackRock's ETF division — managed about 32% of the US market, the FT reported. But it had roughly 40% of the market just five years ago — so why the dip?
Some of that market share has been snagged by Vanguard, the world's second-largest asset manager which now controls 29% of the US ETF industry. Even new challengers like JPMorgan and Dimensional Fund Advisors, the latter of which didn't even offer ETFs in 2018, now have a combined 3% of the market.
Bryan Armour of Morningstar Direct told the FT it just comes down to investors' recent preference for what Vanguard does best: "When iShares competes directly with Vanguard on cost, like S&P 500 or total stock market ETFs, investors still reach for Vanguard's ETF because those cheap, broad-market index funds are what [Vanguard is] best known for. And cheap index funds have been on fire in terms of flows."
Greener Grass Across the Pond: While BlackRock is losing territory in the US, its place in Europe has remained steady and gone mostly unchallenged over the same five-year period. Though the continent's market is worth only $1.7 trillion, BlackRock has consistently managed 44% of it. As any fan of The Crown knows, kings take good care of one another in Europe.
Written by Griffin Kelly
BIG TECH
Apple Stumbles Out of the Gate as Analysts Fret iPhone Sales
It's been a long time since people actually camped out in front of the Apple store to be the first to buy a new iPhone, but this seems different.
Barclays downgraded Apple's stock on Tuesday, warning of slow demand for the iPhone 15, and projecting that the iPhone 16 — slated for a September release — won't be much of a game-changer either, Bloomberg reported.
Fell Far From the Tree
Apple's fiscal 2023, which ended in September, was a bit of a fall from grace for Tim Cook & Co. First, the company reported four straight quarters of declining revenue, its longest slide in 22 years. Demand diminished greatly for iPads and Macs, with YoY sales falling 15% and 27%, respectively, according to Bank of America estimates.
Second, the tech titan had to briefly pull its Apple Watch from store shelves days before Christmas due to an intellectual property dispute — not the best start to the new (fiscal) year.
Despite all that, Apple's stock surged nearly 50% in 2023, as the company's market cap surpassed $3 trillion. However, investors were betting the iPhone 15 would spark significant revenue growth, and now they're starting to doubt that bet:
In a note Tuesday, Barclays analysts wrote, "Our checks remain negative on volumes and mix for iPhone 15, and we see no features or upgrades that are likely to make the iPhone 16 more compelling."
The financial institution cut its rating on Apple's stock to underweight with a $160 price target, implying a 17% decline from its close on Friday. After the downgrade, however, Apple shares dropped another 3.6% on Tuesday.
Big Trouble in Big China: The iPhone doubts come as Chinese telecom giant Huawei steps up the competition. Its phones are still subject to a US ban, but in October, Huawei dethroned Apple as the top phone seller in China. Plus, Beijing has begun banning iPhones and other foreign-made devices among government employees. As one of the few US companies to achieve massive success in China, Apple is seeing a reversal that doesn't bode well for Western tech.
Your Index Funds Are…asleep at the wheel. Did you know that there is a different way to invest that requires no changes to your current exposure, yet can help you capture significant benefits thanks to new technology and innovation? Get index-like performance but end up with more money through tax loss harvesting. That's a big reason why direct indexing is expected to have a 12% growth rate over the next five years. Get started with Frec Direct Indexing today.
Extra Upside
Taking care of business: Workplace experts forecast pay bumps, expanded benefits, and possibly 4-day weeks for many workers this year.
Free to go: Even in crashes and collisions, California cops can't ticket driverless vehicles.
Going global: DoorDash is reportedly aiming to expand outside core US restaurant business.
Down to Truck: Notably absent from Tesla's Q4 results were production and delivery numbers for the long-awaited and highly angular Cybertruck. After years of delays, Tesla delivered its first few Cybertrucks in November, but Bloomberg noted that the company didn't break out the truck's delivery numbers, but instead grouped it together with its Model S and Model X vehicles. Per Bloomberg, analysts are split on how many Cybertrucks actually made it to their owners last year, ranging from 200 to 5,000. For perspective, Ford sold more than 650,000 F-Series trucks in 2022.
Comments
Post a Comment