This week ahead || Jul 10th - Jul 14th 2023
Here's some key news for the week ahead.
Tesla’s China EV price truce shows it’s willing to abide by ‘new rules’
Tesla and CEO Elon Musk, known for their independent approach, have recently shown a willingness to compromise. In China, Tesla and 15 other EV rivals signed a pact to maintain fair competition and avoid abnormal pricing, following a price war initiated by Tesla. This move aligns with the Chinese government's desire to wind down the price war and protect local automakers. Although compromising with the government may not be in Musk's usual playbook, it is unlikely to harm the company's market position. Tesla's recent collaborations, such as partnering with Ford and allowing other automakers to join its Supercharger network, also demonstrate a willingness to compromise for financial benefit. This evolving stance could indicate a more conciliatory Tesla as the company matures.
The threat of a UPS strike is testing the strength of the labor market
The threat of a strike by 340,000 UPS workers is testing the recent surge in union power and the strength of the US labor market. While the tight labor market has favored labor in the past, slowing job gains and cooling demand raise questions about the extent of labor's advantage. The International Brotherhood of Teamsters is pushing for higher wages and benefits for UPS workers, while other unions have been engaged in strikes and unionization efforts. The approach of the Teamsters reflects a new wave of union activism, but it remains uncertain whether this represents a temporary or fundamental change in the relationship between unions and employers. The Biden administration has indicated it will not intervene in the UPS talks, and the outcome of the negotiations will provide insights into the dynamics of the labor market.
Yellen sees 'progress' in rocky US-China ties, expects more communication
U.S. Treasury Secretary Janet Yellen described her recent meetings with senior Chinese officials as "direct" and "productive," helping to stabilize the relationship between the two countries. While acknowledging significant disagreements, Yellen expressed confidence that progress had been made in putting the relationship on a better footing. The U.S. has been working to repair ties with China amid national security concerns and trade tensions. Yellen emphasized the need for cooperation on economic and climate issues and reassured Chinese officials that any U.S. investment curbs would be narrowly targeted and transparent. She also stressed that decoupling from China's economy would be disastrous for both countries.
This week in tech: Meta's meteoric Threads launch; Rivian's auspicious week
Meta's Threads app, which some consider a "Twitter killer," launched with 70 million signups and a legal threat from Twitter. Twitter accused Meta of unlawfully poaching ex-Twitter employees to develop the Threads app and demanded that Meta cease using Twitter's trade secrets and intellectual property. Bank of America analysts believe the threat of legal action will have limited immediate impact but foresee potential antitrust issues if Threads grows to a size comparable to Twitter. Alibaba's US-listed shares surged 8% after China imposed a lower-than-expected fine of 7.12 billion yuan ($985 million) on its fintech arm Ant Group. Rivian had a positive week, surpassing production expectations and announcing that Amazon will deploy its first Rivian vans in Europe, leading to a surge in stock and positive analyst sentiment.
