Good Morning! Today we're diving into Tesla's latest financial woes and the political turbulence causing headaches for Elon Musk.

P.S. We switched days, now expect a new issue every Wednesday!

Elon Musk has weathered many storms, but the latest turbulence hitting Tesla feels particularly intense. The electric-vehicle powerhouse saw profits nosedive a staggering 71% in the first quarter. Ouch.

Facing fierce backlash over his government role at the Department of Government Efficiency, Musk is pulling back, clearly feeling the heat. The sigh he let out during Tuesday’s analyst call said it all.

Tesla’s earnings of 27 cents per share fell significantly short of Wall Street's expectations of 41 cents. The combination of political controversies, hefty tariffs, and supply chain disruptions is proving a tough cocktail to swallow.

Sales slumped dramatically in key markets like the U.S., China, and Germany—all reporting double-digit declines. Aggressive price cuts failed to lift sales, further squeezing Tesla's bottom line.

Musk's heavy investment in artificial intelligence and autonomous vehicles continues, though it has further tightened margins.

Despite the grim news, Tesla shares actually rose slightly in after-hours trading, thanks to optimism over upcoming affordable models. Silver linings, anyone?

Not everything was gloomy. Tesla’s energy storage and software subscription businesses grew impressively, hinting at Musk’s wider ambitions beyond car sales.

Tesla is still set to launch its robotaxi fleet in Austin this summer, a project Musk ambitiously compares to a mix between Uber and Airbnb. We'll be keeping an eye on this one.

Global vehicle deliveries fell 13%, partly due to protests and vandalism sparked by Musk's political stance. Delays caused by anticipation of the refreshed Model Y only added to the misery.

Tesla continues to grapple with 25% tariffs on imported parts, notably from Mexico, a key supplier. Declining sales in vital markets like California (down significantly) and Germany (a sharp 62% drop) are adding to the headaches.

Tesla recently unveiled a less-expensive Cybertruck model priced around $70,000. But can this strategic move help turn things around?

Stocks caught a sudden updraft Tuesday, alongside a firmer dollar, as investors exhaled deeply—at least temporarily—thanks to some reassurance from President Trump, dialing down the feverish unease that's had Wall Street on edge for days.

Notably, the dollar firmed again Tuesday after Trump made clear he's got no plans—at least for now—to dismiss Federal Reserve Chairman Jerome Powell. This stance marks a noteworthy reversal from Trump's recent rhetoric, which had stirred palpable anxiety about Fed independence and sparked aggressive selling in U.S. markets.

Across the Pacific, Asian markets rallied in relief, tracking U.S. equity futures upwards as optimism spread over potential progress in trade talks with both India and Japan. Even the volatile relationship with China seemed to soften, raising cautious hopes that tariff-related tensions might cool down.

Treasury Secretary Scott Bessent's reported remarks—that the trade standoff with China was unsustainable and would likely ease—provided further fuel for today's rally. Stocks surged on the promise of tangible progress. White House Press Secretary Karoline Leavitt confirmed that discussions were advancing positively, pushing the narrative that tariff-related conflicts might soon simmer down.

Asian markets mirrored this hopeful mood, clawing back losses inflicted by Trump's sweeping tariff announcement earlier this month. India, already acting as a haven amid the turmoil, led the recovery, with South Korea and Australia quickly following suit.

Yet even as optimism nudged equities higher, caution lingered elsewhere. The IMF sharply trimmed its global growth outlook, underscoring the gravity of the trade war’s implications. Options markets also flagged heightened anxiety, pricing in elevated protection costs not seen since the flash crash scare of 2021.

Curiously, Bitcoin broke ranks with its historical alignment to tech stocks, surging past the $90,000 mark for the first time since March. Could digital currencies finally be charting their independent path, or is this merely another speculative jump?

As ever in markets, clarity remains elusive. Today’s relief might be fleeting—a short-lived respite rather than a sustained shift. Traders, analysts, and seasoned market watchers alike know well enough that when it comes to geopolitical risk and economic uncertainty, it's far too early to declare victory.

DISCLAIMER: None of this is financial advice. This newsletter should be used for discussion, education, and illustrative purposes only and should not be construed as professional financial advice, solicitation, or recommendation