👉 Tesla's Explosive Earnings

Together with Kalshi

Happy Sunday, everyone.

Last week was arguably the most interesting week in the markets this fall season.

Lots to discuss below!

Portfolio Updates (YTD Performance):

At the moment, my Dividend Growth Portfolio (stocks only) is outperforming the S&P 500 by about +5% year-to-date — and if you factor in Bitcoin and Ethereum this number jumps to +11% over the same period of time.

Some of the biggest winners YTD are the following:

• Hims & Hers Health (HIMS)

• On Holdings (ONON)

• Monday.com (MNDY)

• Nvidia (NVDA)

Some of my biggest losers YTD are the following:

• Adobe (ADBE)

• Union Pacific (UNP)

Funny enough, those are the ONLY red names in my portfolio this year. I actually was excited to share some losers, but fortunately those are it. Now if you wanted to factor in underperformance (while still green) you have names like DataDog and Shopify.

I want to reiterate my intention to compose a sort of “Year in Review” that audits my portfolio’s 2024 performance, as well as execute a rebalancing of sorts. Stay tuned for that!

The last thing I wanted to mention was that I received $1,015 in dividends from my $100K SPYI position — I took all $1,015 and bought ~4 shares of MicroStrategy (MSTR) as a sort of “levered bet” on the performance of Bitcoin. I plan to continue to use my monthly income to buy more and more shares of MicroStrategy stock — putting my income to work!

Still waiting for M1 Finance to list BTCI on their platform so I can re-allocate $50K of my SPYI position toward it.

Week in Review — Too Long, Didn’t Read:

Tesla delivered their cheapest-ever vehicle, Starbucks raises their dividend despite sales slowdown, Verizon will spend $18B next year, the chip world has a revamped legal feud between Arm Holdings & Qualcomm, Spirit Airlines breathes fresh life after their debt deadline extended, McDonald’s took a gut punch from the CDC over onions in Quarter Pounders, Consumer Sentiment reached a six-month high, Continuing Jobless Claims reached a near-three-year high, and we’re on track for the worst year of Existing Home Sales since 1995.

Election Odds Update:

Do you think Trump is going to become President again? Do you have a strong feeling about Kamala’s chances in Georgia?

Whatever way you lean, Kalshi now has a way for you to trade it. 

With Kalshi’s “event contracts,” you can speculate on major events, from politics to economics.

Just a couple weeks ago, Kalshi received approval for its "Congressional Control Contracts" — allowing you to bet on which party will control the House and Senate in November.

Even more exciting, thanks to this regulatory approval, you can now trade on who you think will win the White House. For context, the last time election markets were legal in the U.S. was 1924.

Get in on the action and place your Presidential Election trade today, whether you’re hedging your bets or showing your support.

If you don’t want to place a trade, you can always look at Kalshi’s live odds as to where people are betting their money in these political races.

Key Earnings Announcements:

Tesla delivered their cheapest-ever vehicle, Starbucks raises their dividend despite sales slowdown, and Verizon will spend $18B next year.

• Tesla (TSLA)

Key Metrics

Revenue: $25.2 billion, an increase of +8% YoY

Operating Income: $2.7 billion, an increase of +54% YoY

Profits: $2.2 billion, an increase of +17% YoY

Earnings Release Callout

“Our cost of goods sold (COGS) per vehicle5 came down to its lowest level ever at ~$35,100. Preparations remain underway for our offering of new vehicles – including more affordable models – which we will begin launching in the first half of 2025.

Despite sustained macroeconomic headwinds and others pulling back on EV investments, we remain focused on expanding our vehicle and energy product lineup, reducing costs and making critical investments in AI projects and production capacity.”

My Takeaway

• Starbucks (SBUX)

Key Metrics

Revenue: $9.1 billion, compared to $9.4 billion last year

Earnings per Share: $0.80, compared to $1.06 last year

Earnings Release Callout

“With a strategic reset underway, the company remains committed to creating shareholder value and is announcing that its Board of Directors approved an increase in the quarterly cash dividend from $0.57 to $0.61 per share of outstanding common stock. The dividend and related increase demonstrates the company’s confidence in the long term growth.

Our fourth quarter performance makes it clear that we need to fundamentally change our strategy so we can get back to growth and that's exactly what we are doing with our ‘Back to Starbucks’ plan.”

My Takeaway

• Verizon (VZ)

Key Metrics

Revenue: $33.3 billion, flat YoY

Operating Income: $5.9 billion, compared to $7.5 billion last year

Profits: $3.4 billion, compared to $4.9 billion last year

Earnings Release Callout

“This has been a pivotal quarter for Verizon, with transformative strategic moves and continued operational excellence. We continue to deliver strong results in mobility and broadband, and we are on track to meet our full-year 2024 financial guidance, with wireless service revenue and adjusted EBITDA trending at or above the midpoint of the guided range.”

My Takeaway

Investor Events / Global Affairs:

The chip world has a revamped legal feud between Arm Holdings & Qualcomm, Spirit Airlines breathes fresh life after their debt deadline extended, and McDonald’s took a gut punch from the CDC over onions in Quarter Pounders.

• The Legal Feud of Arm Holdings (ARM) and Qualcomm (QCOM)

Arm Holdings is escalating its legal dispute with Qualcomm by canceling the license that allows Qualcomm to design its own chips using Arm’s intellectual property, giving Qualcomm 60 days to address the issue. The fallout of this cancellation could significantly disrupt both companies, affecting the smartphone and PC markets where Qualcomm’s processors are widely used.

This conflict follows Arm's 2022 lawsuit alleging Qualcomm breached contract terms, especially concerning its acquisition of the chip-design startup Nuvia. Qualcomm has countered by claiming Arm’s actions are baseless and designed to strong-arm them into higher royalty fees. The companies are scheduled to go to trial in December to resolve these disputes.

Qualcomm ended the week relatively flat at +0.4% and Arm ended the week down -5.5%.

• Spirit Airlines Comes Back to Life (For Now)

Spirit Airlines shares jumped +16% after announcing plans to cut jobs, sell 23 older planes, and reduce costs by $80 million to improve financial stability. The struggling budget airline has faced setbacks from a blocked acquisition by JetBlue, an engine recall, and a highly competitive U.S. market, resulting in its stock plunging -80% this year.

Spirit’s fleet reduction is expected to bring in $519 million, while a refinancing deadline extension for over $1 billion in debt provides short-term relief. The airline has already furloughed 200 pilots and projects a decrease in capacity for 2025. Spirit and Frontier Airlines have also revived merger talks, hinting at possible future consolidation in the budget airline sector.

• McDonald’s (MCD) E-coli Drama

McDonald's stock fell -7% this week following news of an E. coli outbreak, leading the company to halt Quarter Pounder and onion sales at about 2,700 U.S. locations.

The culprit has been identified as Taylor Farms — where McDonald’s sources the onions. Colorado restaurant chains, including Illegal Pete’s and Taco Bell, have also removed onions from their menus following the recall. A spokesperson for Yum! Brands, Taco Bell’s parent company, stated that select Pizza Hut and KFC locations have likewise taken fresh onions off their menus. No E. coli illnesses have been linked to these restaurants.

With 49 cases reported, including one death, McDonald's is working with health authorities to control the issue and assess potential impacts on sales. The company is expected to provide further details in its Q3 earnings report next week.

Major Economic Events:

Consumer Sentiment reached a six-month high, Continuing Jobless Claims reached a near-three-year high, and we’re on track for the worst year of Existing Home Sales since 1995.

• October Consumer Sentiment

US consumer sentiment rose to a six-month high in October, reaching 70.5 as optimism increased about buying conditions — partly due to easing financing costs. Consumers expect annual inflation to hold at +2.7% over the next year and foresee a slight decrease in long-term inflation expectations. Improved conditions for durable goods buying hit a four-month high, and household income expectations reached their highest level since June — indicating likely resilience in consumer spending.

Sentiment gains were most notable among Republicans and Independents ahead of the upcoming presidential election. The report also found that high interest rates were less of a concern for many consumers when considering purchases — despite mortgage rates still rising.

• Jobless Claims

US initial jobless claims dropped by -15,000 to 227,000 last week, returning to levels seen before Hurricanes Helene and Milton impacted Southeastern states. Large declines were observed in North Carolina, Georgia, and Tennessee, while Florida saw a rise in claims due to storm impacts.

Continuing claims rose to nearly 1.9 million — marking the highest level in almost three years. This is partially due to storm-related disruptions and a Boeing strike affecting supply chains. The strike has led to furloughs at Boeing suppliers like Spirit AeroSystems, with potential layoffs if the work stoppage persists.

The four-week moving average of new claims rose slightly to 238,500, smoothing out week-to-week volatility.

• Existing Home Sales

Home sales are officially on track for their worst year since 1995.

September's home sales fell to an annualized rate of 3.84 million units, marking the lowest pace since 2010 — with sales down -1% from August and -3.5% from a year ago.

• Inventory rose slightly to 1.39 million homes, but higher interest rates and limited supply have kept prices elevated. The median home price sits at $404,500, up +3% year-over-year.

• Cash purchases made up 30% of sales, with investors pulling back slightly. First-time buyers declined — accounting for only 26% of sales — matching an all-time low.

• Homes took an average of 28 days to sell, up from 21 days a year ago.

Don’t follow us on social yet? Follow us on Instagram, TikTok, and Twitter.

Grit is a publisher of financial information, not an investment advisor. Grit does not provide personalized or individualized investment advice or information that is tailored to the needs of any particular recipient. Grit does not guarantee the accuracy or completeness of the information provided in this page. All statements and expressions herein are the sole opinion of the author or paid advertiser.

THE INFORMATION CONTAINED ON THIS WEBSITE IS NOT AND SHOULD NOT BE CONSTRUED AS INVESTMENT ADVICE, AND DOES NOT PURPORT TO BE AND DOES NOT EXPRESS ANY OPINION AS TO THE PRICE AT WHICH THE SECURITIES OF ANY COMPANY MAY TRADE AT ANY TIME. THE INFORMATION AND OPINIONS PROVIDED HEREIN SHOULD NOT BE TAKEN AS SPECIFIC ADVICE ON THE MERITS OF ANY INVESTMENT DECISION. INVESTORS SHOULD MAKE THEIR OWN INVESTIGATION AND DECISIONS REGARDING THE PROSPECTS OF ANY COMPANY DISCUSSED HEREIN BASED ON SUCH INVESTORS’ OWN REVIEW OF PUBLICLY AVAILABLE INFORMATION AND SHOULD NOT RELY ON THE INFORMATION CONTAINED HEREIN. INVESTORS SHOULD OBTAIN INDIVIDUAL INVESTMENT ADVICE BASED ON THEIR OWN CIRCUMSTANCES BEFORE MAKING AN INVESTMENT DECISION

No statement or expression of opinion, or any other matter herein, directly or indirectly, is an offer or the solicitation of an offer to buy or sell the securities or financial instruments mentioned.

The author, publisher or insiders of the publisher may currently have long or short positions in the securities of the companies mentioned herein, or may have such a position in the future (and therefore may profit from fluctuations in the trading price of the securities). To the extent such persons do have such positions, there is no guarantee that such persons will maintain such positions.

Any projections, market outlooks or estimates herein are forward looking statements and are inherently unreliable. They are based upon certain assumptions and should not be construed to be indicative of the actual events that will occur. Other events that were not taken into account may occur and may significantly affect the returns or performance of the securities discussed herein. The information provided herein is based on matters as they exist as of the date of preparation and not as of any future date, and Grit undertakes no obligation to correct, update or revise the information in this document or to otherwise provide any additional material.

Grit does not accept any liability whatsoever for any direct or consequential loss, however arising, directly or indirectly, from any use of the information contained herein.

By using the Site or any related social media account, you are indicating your consent and agreement to this disclaimer and our terms of use. Unauthorized reproduction of this newsletter or its contents by photocopy, facsimile or any other means is illegal and punishable by law.

Please read: Terms of Use, Privacy Policy, Disclosure Policy and Disclaimer Policy

If you have any questions please contact us at info@gritcap,io