In today's episode, Tyler breaks down Tesla's earnings and its impact on the rest of the market. We'll explore why Tesla is much more than just a car company. Plus, we'll break down today's market action, highlighting key movements in major indexes, investor sentiment shifts, sector performance and our VRA Commodity Watch. Tune into today's podcast to learn more.

Don’t look back because the market is closed. Good Thursday afternoon, everyone. Tyler Herriage here with you for today’s VRA investing podcast. Hope you all had a great day out there today. It was a good day for our markets. We didn’t quite finish positive across the board for our major indexes, but we got exactly what you want to see, and that is tech leading the way today, of course, on the back of yesterday’s massive earnings here from Tesla. That helped out the tech sector a lot, helped out consumer discretionary a lot. I’ll cover that here today as well.

But let’s go ahead and jump right in here because Tesla certainly was the talk of Wall street today. Up a massive 22% on the day to day, adding $154 billion to its market cap today, almost approaching the $1 trillion mark here for its market cap once again. It has been at that level before, but hasn’t seen it in a little while. But to give you some perspective of just how big of a move that is, Ford’s current market cap is $44 billion. So in just today’s trading, Tesla added essentially three Fords to its market cap today. Gm, another massive car player out there, right? $57 billion market cap. So just shy of adding three GM’s to its market cap today. Now, I can see when you say something like that, then it might concern a lot of people into thinking, well, you know, if Tesla is one of their competitors, I see far more fords on the road.

[00:01:54]:
I see far more GM’s on the road out there than I see Tesla’s, although the amount of Teslas I see are increasing. And I do understand that there’s no doubt that these companies or a Toyota out there, that you see way more of these vehicles. But it actually has given us a bit of a reason to like Tesla even more because I think if you look at it from just the car point of view, then you’ve missed the story on Tesla. We’ve said this here for a long time, for years now even that the analysts who cover this stock as a car stock have missed the story here. They’ve got it all wRong. TesLa is not just a car company. They’re also a tech company, a tech first company, I would say even. They’re also an AI company, right? They’re also, and a lot of people might think this sounds strange, but they’re also an energy company as well.

And much, much more than that. Think about their products. Some of these are still in the pipeline, still in the works here. But obviously, number one, you have their vehicles, which you do see everywhere. And to add on to their vehicles is the full self driving aspect, which I’ll get to. I’ve got a point to make on this here in a second as well. But with the self driving type of technology, you could be looking at a company that’s going to also replace businesses like Uber and Lyft, which also have massive market caps as well. Then you’ve got Optimus, the latest rollout of their robo design, which I do agree with Elon on this one.

[00:03:40]:
When this comes to market, if it can do the things that they say it will do, which is looking like will be the case, this could be the largest or let’s say the best selling product in human history, right? That alone is a trillion dollar business. Then energy storage. So back to my comments about energy, where Tesla has been working on. They also bought Solar city, right? You’ll see them on the sides of houses. Now, the Tesla battery packs, which will be a massive part of their business. That’s been a huge flaw in the electric electrification of our society, right? Is how are we going to store this energy, whether it’s solar, wind, or even energy produced by oil and gas? How do you store this energy once it’s been produced? And Tesla is working on solving that problem here as well, no matter what company gets it. Right. This battery idea will be one of the largest companies out there, period, as well.

And Tesla looks to have a big lead in this regard. You don’t even hear a whole lot of other companies talking about it unless you’re incredibly involved in this space. I would challenge most people to name me another one that does battery battery solutions the way that Tesla does as well. Each one of the things I just listed, have you spun them off? These are trillion dollar business ideas for whoever solves them there. So all of these products packaged into one business? Yes. Then, yes. We do see this as being undervalued, even at these levels, maybe extremely undervalued. And it’s why we remain so bullish on Tesla, even at a near trillion dollar valuation.

[00:05:31]:
Now, here’s the point I wanted to make earlier about anybody who’s still hesitant to own Tesla, right? Looking at specifically their full self driving, their autonomous vehicles, which they just rolled out, you know, the cyber cab and their bus version of that as well. Their biggest competitor out there in autonomous vehicles right now is Waymo. Right? And you know, this is specifically relevant to me here in Austin, those of us in Texas. Austin is one of the hubs for Waymo right? Now. If you go downtown, you have to get. I haven’t really looked into it as much as I probably should have, but you can get an autonomous Waymo in Austin right now. Now it has a pre planned loop. You can only take it so far, you know, and they’re pretty clean looking vehicles.

It’s based off the Jaguar suv out there with some modifications that do make it look less cool than just the regular Jag does. But here’s the key point. Well, one Waymo obviously doesn’t make their own vehicles like Tesla does. So they don’t have control over a lot of the hardware that they’re using in it, right? But they have less than 1000 vehicles in their fleet right now. You know, some estimates are really only 600 vehicles in the Waymo fleet. To give you some perspective of just how small a number this is, Tesla has over 7 million vehicles currently on the road right now, and they’re producing another 35,000 every single week worldwide. And of course, they want to ramp that number up as well. The innovations that we’re going to see from Tesla in the coming years are going to be incredible.

[00:07:27]:
It’s the way that the gigafactories have been designed. There’s stage one, two and three, and with each stage, more autonomy, faster vehicle production. A lot of these haven’t even kicked in to high gear yet. So you see the excitement here and the potential for this company. So the other key point here, with Waymo just having 600 to 1000 vehicles in their fleet, it limits the amount of data that they can capture. With Tesla, with, again, 7 million vehicles on the road, even if the drivers don’t have the upgraded package to full self driving, the vehicle is still collecting that data, and they’re using that data to train their AI systems for autonomous driving. So that is one of the key reasons, we’ve said for years, why we never looked at Tesla as solely a car company. That data aspect alone is enough to make it a tech company.

They have more data than any other competitor of theirs out there by light years. They are so far ahead here. So again, Tesla is not a car company. It is a tech company. And that’s why the valuations might seem a little bit skewed on that end. But as I mentioned earlier, the multiple trillion dollar companies packaged within TEsla right now, we look at this as being undervalued at these levels. So again, we remain extremely bullish on Tesla here. You know, I haven’t even brought up any of Elon’s other companies, whether it’s the Boring company or of course, SpaceX.

[00:09:07]:
And, you know, all of these companies are sharing data. They’re sharing knowledge from their engineers. They all want to work together because they see how cool it is to be working on these projects here. It’s really, it’s fun to watch and love that a lot of it’s happening here in Texas as well. That said, you know, we’re still in the early innings here of earnings season. We’ve still got a few more names coming up this week. You know, nothing too massive. A lot of companies this morning beat as well.

But over the next few days, we’ve got, I think it’s 70% still or maybe 60% now of the Nasdaq reporting still left to report and really over the next couple of weeks kicks in to high gear. So stay tuned. We think that the tech companies here will continue to crush earnings estimates and expectations for this round of earnings have already. The bar is so low that so many of these companies are going to beat, and it’s just fuel for the fire to continue for this market to head higher. And we think it will be led by tech like we saw today. But before I get to that, I’ve got to point out here as well that sentiment has fallen here. You know, I could say in a big way. It’s not like we’ve gotten all the way to bearish readings or, excuse me, more bears than bulls, but the amount of enthusiasm has fallen here.

[00:10:35]:
Taking a look at the fear and greed index first, which is still in greed mode, but it has fallen from extreme greed just a couple weeks ago. We also spent most of last week in the 70 ish range. Now we’re at just a 63 here, which, yes, is greed leaning. But until we get to the point where we’re at extreme greed for weeks, potentially even months on end, we’re nowhere near the top for this market. The other one, I mentioned this on my Tuesday podcast as well, that I was looking for this week was the AAIII Investors sentiment survey, which did fall in a big way this week. Bulls hitting their lowest level in over a month. Bears hitting their highest level in over a month. Bulls falling by nearly 8% here and 12% from just two weeks ago.

So, yes, we might have more bulls than bears, but these are the kinds of shakeouts that we like to see here. And until we start getting to the point of know, 50, 60 plus percent bulls on the AII again for weeks or for months on end, we’re just nowhere near the top for this market. Bull markets don’t die in a whimper they die with a bang when everyone and their mother is long stocks, and no one thinks that stocks can go down. And we are so, so far from that environment here, especially with the election coming up. We are hearing it time and time again from members, from listeners on the podcast. You know, how can you be this bullish going into this election? And we get it. What are they going to do, right? Are they going to rig it? Or communists, once they get a hold of power, very rarely give that power up without violence. Everything that the left accuses Trump of, it’s all projection.

[00:12:27]:
We know that, right? The whole January 6, you know, fake insurrection, right? This narrative they’ve been running with for years now. It’ll be interesting to see what they do. But because people are so worried about it, you know, when, when everyone is all worked up, we’re big contrarians here, right? So when everyone is worked up about something like this, we often see that those things don’t tend to come to pass. Not always, right? I’m not saying that’s not a prediction here. Let me clarify. But because so many people are so worried about it, that makes us want to be even more bullish on this market here, right? Although we wouldn’t be sad if the number of bulls in these surveys continue to decrease, we would continue to use any pullbacks as buying opportunities. From the October 13 lows of 2022, we have been aggressively long this market, saying that the only smart money move is to buy the dip. That has been proven to be correct over the last two years.

Now, again, this bull market is only now entering into his third year. Bull markets, on average, last five to six years. So we’re nowhere near the end of this run. Our most recent bull market before this lasted ten years. We think that’s another kind of environment that we’re in right now that will last through 2030. In our view, taking the Dow Jones over 100,000, taking the Nasdaq over 40,000 as well, that remains our call. And by the dip, remains the smart money move here as we see it. That said, let’s take a look at our market action today.

[00:14:12]:
As I’ve said, tech led the way today. Exactly what you want to see. The Nasdaq up three quarters of 1% at 18,415. Now, the semis couldn’t quite lead today, still managed to finish up over four tenths of 1%. Next up here, small caps up 0.23% to 20. 218. Next up, the S and P 500 up a similar just over two tenths of 1% to 5809 and the Dow Jones was our laggard on the day today. I was just looking at this.

It was a few, a few big names in there that got hit hard today that really drove this. IBM got hit hard after, I’m mistaken here, but it was IBM followed by Honeywell. Both of those down five and 6%. On the day to day, the Dow Jones is just 30 holdings, you know, again, not a huge deal with tech leading the way. That’s exactly what we want to see. Next up, taking a look at our internals on the day to day. Good readings here, especially what we see from what we’ve seen over the last few sessions. Just about positive across the board.

[00:15:29]:
We had more than, more advancing stocks than declining stocks on both the NYSE and the Nasdaq. Not big beats here, but hey, we’ll take it. 52 week highs, the lows coming in nearly right at three to one positive on the NYSE, but did come in negative on the Nasdaq here. You know, the Nasdaq is also filled with some not quite prime time players, so not a huge shock here. I would be more shocked if it was some of these big companies that we have been expecting to do well, hitting 52 week lows, and that’s just not what we’re seeing here. Lastly here, volume coming in positive for both the NYSE and the Nasdaq. Much better on the Nasdaq than the NYSE, but again, both still positive. No two to one beats or anything, but solid numbers on the day to day.

Next up here, looking at our sectors on the day, we finished with five out of our eleven s and P 500 sectors higher on the day. We were led by consumer discretionary, which Tesla does make up a big part of there. So explain some of the big move higher up over three and a quarter percent on the day to day for consumer discretionary, followed there by communication services, real estate and tech. Our laggards on the day to day were some of the defensive names. So no big concerns. We had materials lower, industrials and utilities, which has been an interesting one lately. Utilities have seemed to be up on days when yields are higher, which is strange considering that utilities are the biggest borrowers in the nation. So they are very susceptible to moves and yields.

[00:17:10]:
But we’ve got utilities nearing right at an all time high here with yields on the rise right still, the ten year today was down 1% at a 4.2%. But when utilities are hitting near all time highs and just in the last couple of weeks have hit all time highs in the stock market, as we know, is a forward looking mechanism that tells us that the market is anticipating lower yields in the future. That remains our call, as you’ve heard us here talk ad nauseam. Yields in the 4% range, they could be higher than this and they would not concern us. It wouldn’t be enough to derail this market in our view. All right, finally here for today, our VRA commodity watch. Let me get a quick refresh of my screens here. Gold now up seven tenths of 1% at 2748.

So not far from its all time high here. GDX, the gold miner ETF did get hit today, but we’ve been pointing out to our members that we had hit extreme overbought readings here for the gold miners. That is typically where you get a pause, a shakeout, right? So that doesn’t surprise us here. But a key point that I’ll make is that this is not a sell signal for this group. We’ll wait for the pullback from these extreme overbought readings before we resume our purchases here in our monthly dollar cost averaging programs. But we look at this as a buying opportunity from the group, a group that we remaindezhe extremely bullish on here over the long term. Next up, silver now essentially flat on the day, up slightly .08% to $33.86 an ounce. Copper up nearly seven tenths of 1% to $4.36 a pound.

[00:19:03]:
Oil trying to hang on here to $70 a barrel now down six cents of one percent at seventy dollars. Thirty three cents a barrel. And finally here for today, bitcoin. Let’s see here, hanging out near its highs of the day. Good to see bitcoin back above 68,000 at 68,231. There’s a lot of hesitancy in this group right now once we get past the election. You know, we’ve definitely got a more pro bitcoin president in Trump. But no matter who wins this election, we’ve seen both the market heading higher and crypto heading higher as well.

Folks, that is all that we have time for here today. Please be sure to subscribe to receive our VRA podcasts every day at the market close. You can sign up@vraletter.com click the podcast link at the top and check out our 14 day free trial while you’re there, if you’re not already a VRA member. Thanks again for tuning in. Until next time, we’ll see you back here tomorrow for the close.