Senator Elizabeth Warren was caught in a super awkward exchange with a lefty podcaster as she attempted to double down on defending her assertions last year that Joe Biden was mentally sharp.
When asked to explain her past statements prior to the complete break down of the Democrats last Summer, Warren actually attempted to double down.
Even podcaster Sam Fragoso wasn’t having it anymore, and called out Warren as she pathetically attempted to wriggle out of the conversation.
🚨Podcast host Sam Fragoso GRILLS Elizabeth Warren on her past defense of Biden’s mental fitness — she DOUBLES DOWN and gets called out on it🚨
FRAGOSO: “Do you regret saying that President Biden had a mental acuity, he had a sharpness to him? You said that up until July of last… pic.twitter.com/6YJY3U1sRX
“Do you regret saying that President Biden had a mental acuity, he had a sharpness to him?” Fragoso asked, noting “You said that up until July of last year.”
“I said what I believed to be true,” Warren responded.
Fragoso then asked Warren if she believed Biden was “as sharp” as she was, and she couldn’t contain her laughter.
“I said I had not seen decline,” Warren responded, giving the most obvious ‘boy, I know that was total BS’ look, before continuing “And I hadn’t at that point.”
“You did not see any decline from 2024 Joe Biden to 2021 Joe Biden?” an exasperated Fragoso followed up.
“You know, the thing is, he — look, he was sharp. He was on his feet,” she responded, adding “I saw him [at a] live event. I had meetings with him a couple of times.”
Fragoso shot back, “Senator, ‘on his feet’ is not praise. He can speak in sentences’ is not praise.”
“Fair enough,” Warren replied, finally realising there was no point continuing to try to defend Biden.
Senator Speaks With Forked Tongue will not admit to speaking with a forked tongue
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Stocks Reverse Bessent Gains On Report “It May Take Months To Hammer Out Final Trade Deals”
Update (1315ET): Shortly after the Bessent headlines moved stocks higher, Politco reports, while The White House is closing in on general agreements with Japan and India to stave off massive U.S. tariffs, it “may take months to hammer out the final deals,” said one of the people, conceding, “these things are complicated.”
Worse still, the optimism on the initial Bessent headlines has been erased as his actual comments were far less hopeful:
BESSENT: REBALANCING OF CHINA ECONOMY TOWARDS CONSUMPTION AND U.S. ECONOMY TOWARDS MANUFACTURING IN TWO TO THREE YEARS WOULD BE A ‘HUGE WIN’ – RTRS
BESSENT SAYS CHINA NEGOTIATIONS WILL BE A ‘SLOG’, DESCRIBES CURRENT BILATERAL TRADE SITUATION AS AN EMBARGO -PERSON WHO HEARD JP MORGAN SESSION
And just like that all the gains are gone…
* * *
US equity markets were already ramping higher, as yesterday’s massive short pile up reversed and transformed into a squeeze (and force out of underexposed systematic funds), when an 11:58am ET headlines from Bloomberg, suggesting… well… the obvious, namely that the trade war with China is unsustainable in the long run according to Bessent…
*BESSENT SEES DE-ESCALATION WITH CHINA, SITUATION UNSUSTAINABLE
… sent the US equities to session highs, up 3%…
…and reversing all of yesterday losses…
Started with a major short-squeeze…
The broad risk on move has sent the dollar higher, hitting the yen and euro, and pushing the USDJPY well above 141 (after sliding below 140 overnight) and the EURUSD has pushed to session lows, down 0.5%, while the US 10y yield is near its richest levels of the day, down 3bp. Gold is also sliding and was below $3400 after hitting a record high $3500 just a few hours earlier.
While gold is sliding, bitcoin topped $91,000…
Today’s rally is already shaping up as the biggest since Trump’s tariff pivot on April 9. According to UBS S&T, money is flowing back into High Momentum {UBQQHMTM}, up 3.5%, with groups like M&A Banks {UBXXMABK}, up 2.8%, and AI Power {UBXXVOLT}, up 3.4%, benefitting. Some more notable flows:
A risk-on rotation is visible in Volatility {UBPTVOL}, up +2.5%, versus Quality {UBPTQLTY}, down 1.4%. Lower quality pockets are bouncing back most forcefully with De-SPACs {UBXXDSPC} up 3.5%, and Low Quality Credit {UBXXCRED} up 3%.
Tariff Losers {UBXXTTL}, up 2.8% stabilise, note the basket outperformed meaningfully during Monday’s selloff in a sign of washed out positioning.
Defence Primes {UBXXPRME} are down 3%, though note about two-thirds of the move is driven by Northrop after disappointing earnings.
Another reason for today’s meltup is the reversal of yesterday’s meltdown, as panicked systematic funds scramble to buy. According to Goldman’s Cullen Morgan, the systematic macro rebalance has effectively been completed, with global equity length going from approximately an 8 out of 10 during the YTD/February highs to a 1 out of 10 currently, of $53bn and representing a short position from CTA/trend followers and 1-yr low lengths from risk parity style + VA vol-control products.
As a result, Goldman now has CTAs as modeled buyers in every scenario over the next week and month.
Northrop Grumman Crashes Most Since Dot-Com Era On “Unexpected” Stealth Bomber Charge
Update (1440ET):
Northrop Grumman shares are down around 14.5% in late afternoon trading—the steepest intraday decline since a 14.6% decline on March 9, 1998—following dismal first-quarter earnings and a downgraded outlook driven by surging costs tied to its B-21 stealth bomber program.
Shares have traded between $550 and $400 since Russia invaded Ukraine in early 2022, driven by expectations of surging weapons sales. One major problem for the military-industrial complex: If Trump resolves the conflict in Eastern Europe, it could spell trouble for defense stocks that have soared over the past few decades.
Here’s the latest commentary on Northrop’s earnings from Wall Street analysts (courtesy of Bloomberg):
Seaport Research analyst Richard Safran (buy, $599 price target)
“We were neutral into the print, but NOC’s 1Q25 print was an overall disappointment due to an operating miss and a lower 2025 guide”
“We don’t see much of a read-through to other defense names from NOC’s 1Q25 print, and we think most of the issues were specific to NOC”
“Despite two fewer working days in the quarter, the 1Q25 print was disappointing all around with an unexpected charge on the B-21 program on higher than expected costs for the first LRIP lots. Investor sentiment on NOC was fairly positive into the print”
RBC Capital Markets analyst Ken Herbert (outperform, $575 price target)
“With the change in manufacturing process to eventually increase production, we expect investors to be focused on the potential for the B-21 program”
“We also expect a focus on new contract opportunities (e.g. F/A-XX) and NOC’s international exposure, as well as NOC’s portfolio positioning ahead of the FY26 presidential budget request”
Notes that NOC’s sales miss was mainly driven by aeronautics
For Goldman’s first take on the earnings … scroll to the end of the note.
* * *
Northrop Grumman shares plunged in premarket trading—much like the U.S. MQ-9 drones downed by Iran-backed Houthis—after the aerospace and defense contractor posted dismal first-quarter results and slashed its 2025 earnings forecast.
Northrop posted a profit of $481 million, or $3.32 per share, for the first quarter, down from $944 million, or $6.32 per share, in the same quarter one year ago. The staggering 47% per share profit drop was primarily due to loss provisions tied to the first production batch of B-21 stealth bombers.
Northrop explained more in an earnings release:
During the first quarter of 2025, we recognized a pre-tax loss of $477 million ($397 million after-tax or $2.74 per diluted share) across the five low-rate initial production (LRIP) options on the B-21 program at Aeronautics Systems. The loss largely relates to higher manufacturing costs primarily resulting from a process change made by the company to enable an accelerated production ramp, as well as increases in the projected cost and quantity of general procurement materials.
Sales for the quarter slid about 7% to $9.47 billion, missing the Bloomberg consensus projection of $9.93 billion.
Here’s a snapshot of Northrop’s weaker-than-expected results across most divisions, with a significant miss on EPS, free cash flow, and aeronautics margins…
EPS: $3.32 vs. $6.32 last year; missed estimate of $6.28
Revenue: $9.47B, down 6.6% y/y; missed estimate of $9.93B
Free Cash Flow: -$1.82B; well below estimate of -$599.3M
CapEx: $256M, down 5.2% y/y; missed estimate of $310.7M
Backlog: $92.8B
Segment Performance:
Sales: $2.81B, down 5.2% y/y; missed $3.12B estimate
Operating Loss: -$183M vs. $297M profit y/y; estimate was +$300.1M
Defense Systems:
Sales: $1.81B, up 28% y/y; slightly missed $1.86B estimate
Operating Income: $179M, +1.1% y/y; in line with $180.4M estimate
Mission Systems:
Sales: $2.81B, up 5.6% y/y; beat $2.77B estimate
Operating Income: $361M, down 4.5% y/y; missed $398M estimate
Space Systems:
Sales: $2.57B, down 30% y/y; missed $2.71B estimate
Operating Income: $283M, down 15% y/y; missed $293.5M estimate
Management also attributed the sales miss to a “previously disclosed wind-down of work on certain Space Systems programs,” adding, “These decreases were partially offset by higher sales at Mission Systems and Defense Systems.”
For the full year, Northrop reduced its outlook for operating income from a previous forecast but kept revenue guidance:
Adjusted EPS forecast: Cut to $24.95–$25.35 from $27.85–$28.25; below Bloomberg consensus of $28.12
Revenue forecast: Maintained at $42.00–$42.50 billion; in line with estimate of $42.32 billion
In premarket trading, Northrop shares plunged as much as 10%. If losses extend into the cash session, it would mark the stock’s worst day since the early days of the Covid. Should losses exceed -10.15%, it would be the steepest single-day drop since October 10, 2008, when shares fell 13.45%.
Goldman’s Noah Poponak, Anthony Valentini, and Connor Dessert provided clients with their first take on the earnings report:
Bottom Line: NOC 1Q25 results are below consensus. The company recorded a $(477)mn pre-tax loss in Aeronautics for the five LRIP options on the B-21 program. Total company segment EBIT excluding that charge is still below consensus. The company reiterated 2025 revenue guidance, and reiterated free cash, while reducing segment EBIT and EPS.
Details: 1Q25 fully adjusted EPS of $6.06 compares to FactSet consensus at $6.26 and our $6.53. Reported EPS is $3.32. Fully adjusted segment EBIT of $1.05bn is 3% below consensus. Revenue of $9.5bn is 5% below consensus with a slight beat in MS, but all other segments missed by MSD%+. The adjusted segment operating margin of 11.0% is 10bps below our estimate and 20bps below consensus. All segments beat on margin except Mission Systems, which missed by 160bps. NOC updated its 2025 guidance, including revenue of $42.0-$42.5bn (reiterated, vs. consensus at $42.3bn), segment operating income of $4.20-$4.35bn ($4.65-$4.80bn prior, vs. consensus at $4.82bn), EPS of $24.95-$25.35 ($27.85-$28.25 prior, vs. consensus at $28.11), and free cash flow of $2.85-$3.25bn (reiterated, vs. consensus at $3.10bn).
Our $527 12-month price target is based on a target relative (S&P 500) CY25E P/E of 1.1X. Key risks include (1) Geopolitics, (2) DoD spending priorities, (3) capital deployment, and (4) margins.
Despite the earnings miss and guidance cut, CEO Kathy Warden stated in a press release, “Global demand for our products remains strong, which is reflected in our record first quarter backlog, and we are making significant progress on our key programs.”
Wells Fargo Analysts Say Amazon Paused Some Data Center Lease Commitments
First came China’s “Deep Seek” moment at the start of the year. Then TD Cowen’s Michael Elias told clients Microsoft was scaling back data center projects in the U.S. and Europe. Shortly after, Goldman Sachs pulled forward its peak data center forecast to this year. Now, Wells Fargo analysts report that Amazon has paused some data center lease negotiations for its cloud division.
“Over the weekend, we heard from several industry sources that Amazon Web Services (AWS) has paused a portion of its leasing discussions on the colocation side (particularly international ones),” Wells Fargo analysts wrote in a note on Monday, adding, “The positioning is similar to what we’ve heard recently from MSFT.”
The analysts noted that Amazon is not canceling signed deals. Instead, they’re digesting recent aggressive lease-up deals.
“It does appear like the hyperscalers (big cloud companies) are being more discerning with leasing large clusters of power, and tightening up pre-lease windows for capacity that (would) be delivered before the end of 2026,” the analysts said, noting that Meta and Alphabet-owned Google remain active in data center leasing.
Kevin Miller, Vice President of AWS Global Data Centers, downplayed the Wells Fargo report in a LinkedIn post, calling the move “routine capacity management” and stating that there have been no recent fundamental changes to Amazon’s expansion plans.
After the unveiling of China’s ultra-cheap DeepSeek rival to ChatGPT in January, TD Cowen’s Michael Elias, a month later, first reported on Microsoft data center order cancellations – followed by a more recent note from the analyst that specified the big tech firm has walked away from data center projects in the U.S. and Europe, amounting to a capacity of approximately 2 gigawatts of electricity.
“We continue to believe the lease cancellations and deferrals of capacity points to data center oversupply relative to its current demand forecast,” Elias wrote in a note last month.
Stocks Soar, Reverse All Of Yesterday’s Losses On Bessent China Comments, Short Squeeze
US equity markets were already ramping higher, as yesterday’s massive short pile up reversed and transformed into a squeeze (and force out of underexposed systematic funds), when an 11:58am ET headlines from Bloomberg, suggesting… well… the obvious, namely that the trade war with China is unsustianable in the long run according to Bessent…
*BESSENT SEES DE-ESCALATION WITH CHINA, SITUATION UNSUSTAINABLE
… sent the US equities to session highs, up 3%…
…and reversing all of yesterday losses…
Started with a major short-squeeze…
The broad risk on move has sent the dollar higher, hitting the yen and euro, and pushing the USDJPY well above 141 (after sliding below 140 overnight) and the EURUSD has pushed to session lows, down 0.5%, while the US 10y yield is near its richest levels of the day, down 3bp. Gold is also sliding and was below $3400 after hitting a record high $3500 just a few hours earlier.
While gold is sliding, bitcoin topped $91,000…
Today’s rally is already shaping up as the biggest since Trump’s tariff pivot on April 9. According to UBS S&T, money is flowing back into High Momentum {UBQQHMTM}, up 3.5%, with groups like M&A Banks {UBXXMABK}, up 2.8%, and AI Power {UBXXVOLT}, up 3.4%, benefitting. Some more notable flows:
A risk-on rotation is visible in Volatility {UBPTVOL}, up +2.5%, versus Quality {UBPTQLTY}, down 1.4%. Lower quality pockets are bouncing back most forcefully with De-SPACs {UBXXDSPC} up 3.5%, and Low Quality Credit {UBXXCRED} up 3%.
Tariff Losers {UBXXTTL}, up 2.8% stabilise, note the basket outperformed meaningfully during Monday’s selloff in a sign of washed out positioning.
Defence Primes {UBXXPRME} are down 3%, though note about two-thirds of the move is driven by Northrop after disappointing earnings.
Another reason for today’s meltup is the reversal of yesterday’s meltdown, as panicked systematic funds scramble to buy. According to Goldman’s Cullen Morgan, the systematic macro rebalance has effectively been completed, with global equity length going from approximately an 8 out of 10 during the YTD/February highs to a 1 out of 10 currently, of $53bn and representing a short position from CTA/trend followers and 1-yr low lengths from risk parity style + VA vol-control products.
As a result, Goldman now has CTAs as modeled buyers in every scenario over the next week and month.
Today, the Supreme Court will hear oral arguments on a major parental rights case in Mahmoud v. Taylor, a challenge to Montgomery County (Md.) requiring their children to participate in instruction that includes LGBTQ+ themes. It is a case that could produce sweeping changes across the county as parents object to the use of public schools to advance social and political agendas. These books are being required for children 3-10 years old. The parents have the stronger argument in my view. A ruling in their favor could prove one of the most important victories for parental rights in decades.
Parents objected in Maryland in 2022 when the county approved books featuring LGBTQ+ characters for inclusion in its language-arts curriculum. The county then announced that it would not allow parents to opt to have their children excused from instruction involving the storybooks.
Various parents sued, including some citing their Muslim, Catholic, and Ukrainian Orthodox beliefs. They lost in the lower courts, including the United States Court of Appeals for the Fourth Circuit.
The parents cited Wisconsin v. Yoder, where the Court declared that it was “recognized ‘beyond debate’ the First Amendment right of parents ‘to guide the religious future and education of their children.’” In that case, the court held that Amish parents did not have to send their children to school after the eighth grade because it conflicted with their religion.
They also argue that the Maryland policy is neither neutral nor generally applicable as required under Church of Lukumi Babalu Aye v. City of Hialeah. That could produce the greatest number of questions from the justices today. The parents argued that the county has long allowed notice and opt-outs for material and instruction that address family life and sexuality. However, it refused to do so here.
The parents alleged religious hostility in comments made against the challengers. They raise the question of why such children cannot be allowed alternative reading options.
The Montgomery County Board of Education is arguing a narrower view of the free exercise clause and that public education requires a uniform curriculum, including recognition of our society’s diversity. They insist that allowing some to opt out would present an overwhelming burden on the schools.
A decision for the parents could significantly change public schools’ handling of such controversial materials. I have previously written about how administrators and teacher unions are destroying public education by elevating agendas over academics.
Teachers and boards are killing the institution of public education by treating children and parents more like captives than consumers. They are force-feeding social and political priorities, including passes for engaging in approved protests.
Once parents have a choice, these teachers lose a virtual monopoly over many families.
They are no longer a captive audience. If public unions want to maintain funding, they will have to actually improve educational results for these families.
Notably, figures like American Federation of Teachers president Randi Weingarten have opposed the elimination of the Department of Education because it might help voucher schools and other alternatives to public education.
In a podcast, Weingarten explained, “We know, for example, what Texas would do. They’ll use it for vouchers. So they won’t give [federal funding] to the kids who have it now, they’ll just give it for vouchers.”
There is reason for Weingarten and the teacher’s union being so concerned. Florida allows for school choice and has demanded greater performance from public schools. Despite attacks by Weingarten and other Democrats, Florida has been ranked as the number one state for both education and the economy.
However, public educators have continued to lower proficiency requirements and cancel gifted programs to “even the playing field.” The result has been to further hide the dismal scores and educational standards of many public school districts.
There is an irony in the position before the Supreme Court by public educators. A reversal may be a critical change in slowing the departure of families from public schools. One of the families discussed in this case sold their house to afford private schooling for their children.
By limiting such mandatory programs, some families may be less likely to seek alternatives to public schools. These families want to send their children to public schools while retaining their role in instilling religious values for their children. Montgomery County is forcing a choice that few parents will make against their family values.
Massive ‘Mystery Explosions’ Rock Ammo Depot Outside Moscow, Resulting In Mushroom Cloud
A ‘mystery explosion’ has rocked a munitions depot in Russia’s Kirzhach district (Vladimir region) outside of Moscow on Wednesday, resulting in a state of emergency being declared for the area, and large-scale evacuations from nearby villages, as emergency crews scramble to the scene.
Widely circulating social media videos show a sizeable mushroom cloud over the area, with an early casualty assessment ongoing. “Massive explosions have been reported on Tuesday near the town of Kirzhach in Russia’s Vladimir Region, some 75 km northeast of Moscow,” reports Russian state media. One dramatic video showed the following:
Local authorities in Russia’s Vladimir region set up a hotline for complaints and legal assistance after a blast sent a mushroom-shaped cloud into the sky
“The blasts are said to have taken place at a munitions depot. Local authorities have announced a state of emergency in the district and blocked the roads leading to the area,” RT writes.
The explosions happened at around 3:30pm local time, and eyewitness reported a series of explosions – the aftermath which could be viewed from several miles away.
“A temporary accommodation center which has been established in a local school has already received about 100 people, including children and elderly citizens, a representative of the facility has told TASS,” the Russian English-language media report continues.
The facility also reportedly stores missiles for the Russian armed forces. This is not the first time a mysterious ‘accident’ has befallen the site, since the Ukraine war started.
Below is the initial report from The Wall Street Journal’s Chief Foreign Affairs correspondent…
One of Russia’s main artillery ammunition and missile storage areas, the 51st GRAU in the Vladimir region not far from Moscow, is combusting. pic.twitter.com/zp8mSHPMmg
Immediate suspicion is likely to fall on Ukrainian intelligence services and their CIA backers, given this fits the familiar pattern of sabotage operations which have been semi-regular over the past couple years.
Russia’s Deputy Defense Minister Andrey Bulyga is being dispatched to the scene to oversee an investigation into the causes of the event, and to assess casualties and damage.
There have been a spate of mystery fires inside Russia, particularly targeting defense and energy sector buildings. To some extent, both Ukrainian and Russian intelligence services are likely waging intensified sabotage campaigns against the other at this point.
Last year, Anne Keast-Butler, head of the UK’s GCHQ, or signals intelligence operations (which is the equivalent of America’s NSA), warned in a speech that President Putin was plotting “physical attacks” against Western targets.
The GCHQ director claimed at the time that Moscow is busy “nurturing and inspiring” groups of cyber attackers, and is even “in some cases seemingly coordinating physical attacks against the West.”
In many cases Russian authorities have downplayed these incidents, often choosing to describe them as the result of industrial accidents; however these ‘accidents’ have come in unusually high numbers in recent years amid war in Ukraine…
“The reason — safety violations.” The Russian Defense Ministry confirmed a fire and ammunition detonation at a military base in Vladimir region
According to the ministry, the incident was caused by a “fire” due to safety protocol violations.
Last year, an Ikea in Lithuania’s capital went up in flames, and authorities just last month pinned it on Russian intelligence or saboteurs after a lengthy investigation. The fire, which targeted the Swedish retailer store in Vilnius on the May 9, 2024, resulted in no casualties. Interestingly, the two prime suspects taken into custody were actually Ukrainian citizens.
Ammo has continued to shoot off into surrounding villages and neighborhoods Wednesday afternoon and evening…
Russia’s 51st GRAU arsenal just suffered another major secondary detonation as the munitions storage facility continues to cook off.
The munitions dump, one of Russia’s largest, is now reportedly ejecting explosives into the surrounding area. pic.twitter.com/9AN4fAQtxg
“It has been established that through a series of intermediaries… the organizers of these crimes are in Russia and this is connected to military intelligence and security forces,” the Lithuanian prosecutor’s office said, describing a ‘destabilization’ campaign in Europe.
Robotaxis, Margins And Musk’s Moonlighting: Tesla Q1 Earnings And “Company Update” Preview
Tesla has set its Q1 2025 earnings call for today at 5:30PM eastern time. The event will be livestreamed, with a recording available later on Tesla’s website. The Q1 Update Letter will be released after markets close that same day. This quarter, as multiple Tesla blogs like Teslarati have pointed out, Tesla is also adding a new element: a “Company Update.”
For the first time, the term appeared in both its vehicle delivery report and on the company’s official X account. “In addition to posting first quarter results, Tesla management will hold a live company update and question and answer webcast that day,” the company stated.
Speculation is growing that Tesla may use the update to reveal more about its upcoming projects, particularly the affordable EVs teased in its Q4 2024 report: “Plans for new vehicles, including more affordable models, remain on track for start of production in the first half of 2025…”
Tesla’s Q1 2025 earnings are expected to show a 4.4% decline in profit to $0.43 per share, with revenue holding steady at $21.45 billion, according to FactSet. Analyst estimates range from $0.30 to $0.51 per share, but consensus has dropped over 40% since late 2024. Piper Sandler warned the results will “likely underwhelm,” with margins “probably trending near multiyear lows.”
At the start of April, Tesla reported 330,000 vehicle deliveries in the first quarter, missing Goldman, JPM, Morgan Stanley, and UBS’ estimates of between 351,000 and 375,000.
Tesla shares have been halved since their record high on Dec. 17.
This morning on CNBC the question was whether or not the name was too oversold in the short term. Dan Levy, Barclays senior equity research analyst, on what he’s watching for in Tesla’s Q1 earnings told Joe Kernen: “We’re looking for the potential for Elon Musk to be a bit more reengaged with Tesla — the opportunity to reiterate the FSD driverless event in June. This outweighs some of the fundamental factors that we expect for a weaker earnings result itself.”
Levy sounded a cautious tone ahead of Tesla’s Q1 earnings report, pointing to deeper structural concerns beneath the surface. He noted that the company’s dismal start to the year has effectively set the tone for the rest of 2025. “We had such a weak first quarter… there’s going to be a weak setup for the second quarter as well. It’s just too steep a hill to climb.”
There’s five more things in particular investors will be looking for in this upcoming report and/or update, IBD noted this weekend.
Robotaxis And Affordable EVs
Investor focus is shifting to Tesla’s promised robotaxi rollout. Musk has said paid rides would begin in Austin this June, but his past claims about autonomy have repeatedly fallen short. The latest FSD update shows modest progress, but it’s still far from viable as a robotaxi platform. The Cybercab—unveiled last year as a two-seater without a steering wheel—is supposed to launch before 2027 at under $30,000.
However, Reuters recently reported that Trump’s 145% tariff on Chinese goods has halted key parts shipments, possibly delaying both the Cybercab and Semi. The Cybercab’s cost-saving “unboxed” manufacturing method also remains unproven.
We reported hours ago that aerial images of Tesla’s Texas Gigafactory hinted at cybercab production.
Joe Tegtmeyer, a certified flight instructor, snapped high-resolution aerial images of the Tesla Giga Texas earlier today, which revealed what could be castings of the new Cybercab vehicle. “Interesting developments next to the Giga Texas Casting Machine section today … several new kinds of castings that do not look like Model Y or @cybertruck … looking for experts out there to identify these in the comments!” Tegtmeyer wrote on X.
Interesting developments next to the Giga Texas Casting Machine section today … several new kinds of castings that do not look like Model Y or @cybertruck … looking for experts out there to identify these in the comments!
Tegtmeyer noted, “Also, what looks like more Giga Press parts being delivered today.”
Tesla’s long-teased affordable EV: Reports suggest the first lower-cost option may just be a simplified Model Y, possibly arriving in 2025 or 2026. “The affordable model, which was supposed to be planned for the second half and which was supposed to be an opportunity for volume — that’s going to be delayed by at least several months,” Levy explained on CNBC, emphasizing how this setback weakens one of the few credible near-term levers for expanding market share.
Vehicle sales for Q1 fell 13% year-over-year to 336,681. Growth is expected to stagnate this year, with consensus forecasting a modest 3% increase in deliveries, though some analysts now expect fewer sales than in 2024.
Tariffs And Tesla In China
China sales rose slightly but remain low-margin, while U.S. and European demand has been hit by Musk’s controversial public profile.
Tesla has quietly removed the “Order Now” button for its Model S and Model X vehicles on its Chinese website, signaling potential disruption amid a deepening US-China trade war. The move comes as Beijing announced a new round of retaliatory tariffs early Friday, raising the effective duty on U.S. imports from 84% to 125%.
Both the Model S and Model X are manufactured in California, making them directly exposed to China’s tariff escalation—in other words, those vehicles would not be economically feasible to sell in a high-rate tariff regime overseas.
“The electric-car maker was offering the option to order the two models as of the end of March, according to a screenshot of its China website archived by Wayback Machine,” Bloomberg noted.
The sudden suspension of ordering Model S/X should not come as a surprise, considering both are made in Fremont, California and then loaded up on RORO carriers to Beijing. The good news for Tesla: Model S/X were a tiny fraction of Tesla sales in China last year, coming in just under 2,000 units, compared with 661,820 for both the Model 3 and Model Y (both made at Shanghai Gigafactory).
While Tesla’s exposure to Trump’s tariffs is limited compared to other automakers, it still relies on Chinese suppliers for battery components, including CATL and BYD. Investors will be watching for updates on how Tesla plans to respond to trade tensions and cost pressures.
Musk’s Political Involvement
Musk’s political involvement is also on watch. He has been rumored to be finishing his work with DOGE by May and people are watching for a potential full-time return to Tesla. While acknowledging the reputational fallout, Levy cautioned against overstating its permanence. “There are all the questions on brand damage and where we are in the global EV market… It remains to be seen. But Tesla is still one of the only ones in the U.S. selling EVs profitably,” he noted. In other words, despite the noise, Tesla still maintains a structural edge in an otherwise unprofitable sector.
Less than 24 hours ago Wedbush analyst Dan Ives called a “code red” at Tesla, saying Musk needed to return to Tesla full time. “Musk needs to leave the government, take a major step back on DOGE, and get back to being CEO of Tesla full-time,” Ives penned in a note to clients on Sunday.
“Tesla is Musk and Musk is Tesla….and anyone that thinks the brand damage Musk has inflicted is not a real thing, spend some time speaking to car buyers in the US, Europe, and Asia. You will think differently after those discussions.”
Two weeks ago, Ives, whose analyst rating on the stock remains “Buy” rated, slashed his price target to $315, down from $550. He explained, “Tesla has essentially become a political symbol globally, adding, “It is time for Musk to step up, read the room, and be a leader in this time of uncertainty.”
Ives concluded, “We view this as a fork in the road time: if Musk leaves the White House there will be permanent brand damage, but Tesla will have its most important asset and strategic thinker back as full time CEO,” adding, “If Musk chooses to stay with the Trump White House, it could change the future of Tesla/brand damage will grow.”
IBD adds that a March YouGov/Yahoo News poll found 67% of U.S. adults wouldn’t consider a Tesla, with 37% citing Musk as the reason. Wedbush analyst Dan Ives, a longtime bull, cut his Tesla price target by 40%, calling the situation a “perfect storm” and estimating Tesla has lost at least 10% of its future customer base—potentially more than 20% in Europe.
Margins Under Pressure
Levy concluded that perhaps the most pressing issue is the company’s shrinking margins. He warned that this earnings call could bring further disappointment if profitability doesn’t show signs of stabilizing.
“Margins have been under pressure… If they give any color that shows that the margins are going to remain suppressed, that’s a problem,” Levy said. With automotive gross margins expected to hover around 10% — roughly a third of what they were three years ago — the real story may not be about deliveries or product announcements, but the company’s eroding pricing power and cost structure.
Analyst Sentiment Heading Into The Call
Over the past two weeks, analysts have issued a flurry of updated price targets on Tesla, reflecting a landscape of caution and recalibrated expectations. The only question is if they are low enough to make Q1 look good.
Raymond James issued a fresh “Outperform” rating for Tesla on April 22, 2025, signaling optimism despite broader market hesitations, though they did not specify a new price target. Just one day earlier, Barclays cut its target from $325 to $275 while maintaining an “Equal Weight” rating. Analyst Dan Levy pointed to weak fundamentals, margin pressure, and growing brand concerns tied to Elon Musk’s political entanglements as key factors.
Wedbush’s Dan Ives, typically one of Tesla’s louder bulls, slashed his target from $550 to $315 on April 6. Though he kept an “Outperform” rating, he issued a warning that Musk’s political activism could do lasting damage to Tesla’s consumer perception and investor trust. Wells Fargo echoed this sentiment on April 21, setting a $130 target with an “Underweight” rating, citing poor demand trends and the risk of product-line cannibalization from a lower-cost model.
JPMorgan was even more pessimistic, cutting its price target to $120 while reiterating an “Underweight” stance. The firm admitted to underestimating the degree of consumer backlash facing Tesla and now sees continued downward pressure on both margins and sentiment. Deutsche Bank, while still bullish with a $345 target and a “Buy” rating as of late March, also revised down delivery expectations due to softening demand across global markets.
Exane BNP Paribas joined the bearish ranks, setting a $137 target on April 16 with an “Underperform” rating, reflecting growing skepticism over Tesla’s fundamentals and positioning. UBS dropped its target to $190 with a “Reduce” rating on April 10, citing new tariffs and predicting an 11% hit to Tesla’s 2025 delivery numbers.
Mizuho also trimmed its target, landing at $375, as it adjusted for anticipated price increases and flagging U.S. demand driven by tariff headwinds.
Lastly, Cantor Fitzgerald maintained a positive outlook with a newly issued “Overweight” rating on April 2, though it did not attach a numerical target to its bullish thesis.
President Trump just landed another comic-book punch on Fed Chair Powell:
“”Pre-emptive Cuts” in Interest Rates are being called for by many…. there can almost be no inflation, but there can be a SLOWING of the economy unless Mr. Too Late, a major loser, lowers interest rates, NOW. Europe has already “lowered” seven times. Powell has always been “Too late”, except when it came to the Election period when he lowered in order to help Sleepy Joe Biden, later Kamala, get elected. How did that work out?”
To be honest, Trump is saying many of the same things that many of those covering the Fed in markets are too – just far less politely; and very inappropriately in the eyes of those same commentators… because they are allowed to criticize an independent central bank and take market positions to bend it to their will, but politicians are obviously not.
That’s part of the Liberal World Order (LWO).
And how did that work out?
Pope Francis died on Easter Monday, his last speech after having met US Vice President Vance having stated: “How much contempt is stirred up at times towards the vulnerable, the marginalised, and migrants. I appeal to all those in positions of political responsibility in our world not to yield to the logic of fear which only leads to isolation from others, but rather to use the resources available to help the needy, to fight hunger and to encourage initiatives that promote development.” President Trump will attend the funeral in Rome, expected by April 27, then the world has another key election to focus on.
That’s as Canada’s and Australia’s white smoke looms as both sweat about the end of the LWO. In Oz, ridiculously, it’s still all about housing. Just as silly, Politico asks ‘Could Canada join the EU? Unlikely … but not impossible’ –as if ‘European’ in European Union doesn’t mean anything, and the US would just watch that happen without acting vs. it– and as Canadian PM Carney says he wants to increase federal spending by 1% of GDP for the next four years to ‘Trump-proof’ the economy if he wins. As if that is possible either.
The chief of the World Economic Forum also just stood down with immediate effect – but there won’t be any election for his successor, just a search committee. That’s orderly, and perhaps worldly, but doesn’t seem very liberal.
Trump has posted about the justice system again, claiming there wasn’t any court action to stop population flows in one direction, but there is lots to stop it going the other way. We wait to see what the Supreme Court has to say about the Alien Enemies Act of 1798, but informed speculation is a ruling may say the government can deport people if it gives seven days’ notice.
Last week, the US Trade Representative released his final port fees for Chinese-built ships journeying to the US. We will publish a report on that later today but suffice to say while many players can avoid the worst of its impact, China can’t. On US-China trade war, it’s full steam ahead.
China is openly threatening repercussions for any country that strikes a trade deal with the US with negative implications for it, which any trade deal the US signs now must logically have. In short, it’s choose or be chosen time, as I’ve warned. So, what are *you* going to do? “Rate cuts?”
Underlining the sense of desperation evident in some intellectual circles, The Atlantic claims Hitler’s Terrible Tariffs “by seeking to “liberate” Germans from a globalized world order,…sent the national economy careening backwards”. The messaging is clear.
Yet that claim has no basis in historical fact: Hitler used lots of economic statecraft tools pre-WW2, but tariffs were not his primary vector.
Its suggestion is the US finds large like-minded economies who agree to run balanced trade together and builds a new system from there, rather than everyone shouting, “Because markets!” while ignoring their own and others’ mercantilism in a system that IS broken.
Which some think *is* the US plan if you join the dots.
On which note, US Vice-President Vance was just invited to Indian PM Modi’s home; India placed a 12% tariff on Chinese steel; and the talk is of a “roadmap” to elevate US-India relations, making a mockery of the BRICS as an anti-US wall, and perhaps moving us closer to the foundation stone of a new global architecture. Indeed, it seems a race between India, Japan, and possibly Vietnam to strike the first deal with the US… and then face the wrath of China.
Conversely, French President Macron reportedly claims Europe is ready for the burden of the global reserve currency…. which in the current broken system means a much higher euro, a much larger trade deficit, much less industry and rearmament, and much more inequality. Unless Europe thinks it can have a global reserve currency while running balanced trade or trade surpluses… which sounds like the US plan everyone is now decrying, “because markets!”
I continue to argue Europe is in NO way ready, or willing, to take on that burden, and any market ‘favouritism’ towards the Euro is a gift it won’t want to accept once it sees the euro pro quo. Meanwhile, if Europe is the global future, why is the ECB and EU Commission so worried about the issuance and use of US dollar-backed stablecoins there? Capital flight?
Gold just hit another record nominal high at $3,445 before dipping slightly. While most are getting an eerie feeling about that, and some note US Treasury yields are rising as the US dollar is falling, muttering about Trump and “the end of US exceptionalism”, very few truly grasp that the global system, not just global trade, is collapsing – or being collapsed. That extends way beyond what we are seeing so far: and how well do you think smaller economies and powers will fare as it does vs. the US? Badly. In short, shorting the dollar comes up short when one thinks about it that way.
Will the Spring IMF, World Bank, and G20 finance ministers’ meetings this week see a Mar-a-Lago Accord or just plain discord as everyone –including central banks– realises they won’t be singing from the same hymn sheet, or with the same singers, much longer? Recall the collapse of central bank coordination, centred on gold, was a pivotal factor in the end of two previous Liberal World Orders in the early- then mid-20th century. As was geopolitics…
…as Russian President Putin signed a 20-year Strategic Partnership Agreement with Iran: after no Ukraine ceasefire or peace deal, that looks like no ‘Noxin’ (reverse Nixon) win for Trump on that front either.
Meanwhile, the Pentagon looks in chaos, with the White House saying it’s trying to reject Secretary of Defence Hegseth, who still has Trump’s backing. Don’t think this isn’t related to Iran, and who wants jaw-jaw vs war-war –and not necessarily the way you might think– as Israel rehearses for a strike on Iran and Hezbollah, the latter still refusing to disarm as Lebanon’s government and the UN wishes, and instead attempting to entrench itself deeper.
So, yes, a lot going on: even more than President Trump saying something rude about Powell. More like a US Ker-Powell! to the entire Liberal World Order.
Week ahead
Today has the ECB survey of professional forecasters, to delight… professional forecasters of the ECB, Eurozone consumer confidence, and the ECB’s Lagarde on CNBC. There is also the Philly and Richmond Fed services surveys and the Fed’s Jefferson and Harker speaking.
Wednesday: has global services and manufacturing PMIs, UK public sector borrowing, and the ECB’s wage tracker, then the Fed’s Beige Book and US new home sales and building permits.
Thursday: it’s the German IFO survey, US durable goods, initial claims, and existing home sales.
Friday: sees UK and Canadian retail sales, and US Michigan consumer confidence.
IMF Slashes Global GDP Forecasts, Warns Of Trade War Fallout For China, US
The International Monetary Fund slashed its growth forecast for 2025 and 2026, and said the latest escalation in the trade war risks saddling China and the US with losses that would only get worse after this year.
In its latest World Economic Outlook report published this morning, the IMF cut its 2025 global GDP forecast to 2.8%, and trimmed its 2026 GDP view to 3.0%. In January, the IMF predicted the world economy would expand 3.3% both this year and in 2026. The US saw the biggest growth cut, its GDP now expected to grow 1.8% and 1.7%, revised lower by 0.9% and 0.4%, respectively. The EU GDP was also trimmed but far less, to 0.8% and 1.2% in 2025 and 2026, down from 1.0% and 1.4% (expect a full-blown deflationary collapse in the old continent in a few months once China starts dumping all of its trinkets it can no longer sell in the US).
As for China, the IMF now expect GDP to grow by just 4.0% in 2025 and 2026. The forecasts represent cuts of 0.6% and 0.5%, respectively, from the IMF’s previous predictions published in January, before Donald Trump reclaimed the presidency.
The China downgrades were made under a reference forecast based on information available as of April 4, only taking into account trade measures such as Trump’s initial 34% “reciprocal” tariffs on top of a fentanyl-related 20% tax, as well as China’s retaliation. Since then, Trump hiked new levies to a combined 145% on most Chinese goods, prompting Beijing to hit back with duties of 125% on the US.
In short, the question now is who falls into recession first and waves the trade war White Flag.
If the measures announced on April 5-14 were considered and assumed to be permanent, “the losses in China and the United States would become larger in 2026 and beyond,” the IMF said.
For China, the US tariffs imposed as of April 4 “offset the stronger carryover from 2024” — after a better-than-expected performance in the fourth quarter — and “fiscal expansion in the budget,” the IMF said, although despite repeated jawboning and declarations of imminent fiscal stimulus, Beijing has yet to roll out even one notable program that will boost the country’s GDP.
“After enduring a prolonged and unprecedented series of shocks, the global economy appeared to have stabilized, with steady yet underwhelming growth rates. However, the landscape has changed as governments around the world reorder policy priorities and uncertainties have climbed to new highs. Forecasts for global growth have been revised markedly down compared with the January 2025 World Economic Outlook (WEO) Update, reflecting effective tariff rates to levels not seen in a century and a highly unpredictable environment. Global headline inflation is expected to decline at a slightly slower pace than what was expected in January”, the IMF wrote in its semiannual report.
Appealing to a continuation of the globalist status quo, the IMF also said that “at this critical juncture, countries should work constructively to promote a stable and predictable trade environment and to facilitate international cooperation, while addressing policy gaps and structural imbalances at home. This will help secure both internal and external economic stability.”
Good luck with that.
According to Bloomberg, the outlook now “is rife with uncertainty after Trump’s chaotic decision making resulted in an escalating cycle of retaliation with China” as effective tariff rates between the two countries are far above the 60% level many economists say will decimate bilateral trade. Sure enough, the IMF slashed it global trade volume forecast from 2.4% in 2024 to 1.9% and 2.0% in 2025 and 2026, a haircut of 0.3% and 0.4% respectively.
