TheBRRR’s Thoughts

GM.

• Tesla, Google, and luxury conglomerate LVMH kicked off Q2 earnings season yesterday and the market is disappointed.

  • The earnings reports revealed that Tesla cleared out inventory at a discount while LVMH missed on topline sales. Both companies struggled in China with y/y revenue down by 11% and 4% in the country, respectively.
    

• Elsewhere, the Ether ETFs launched and garnered $107m in net inflows.

  • Bitcoin’s largest annual conference kicks off tomorrow in Nashville. Donald Trump, Kamala Harris and Robert F Kennedy Jr are all expected to speak.

• The S&P500 is down by 1% premarket while the Nasdaq is off by 1.5%.
  

• The Fed’s preferred inflation metric, monthly and annual Core PCE, will be updated on Friday morning and will likely cement the first (of many) interest rate cuts arriving in September.

  • There is an outside chance of a rate cut at the Fed’s July 31st meeting, but markets are pricing that with only 6.5% likelihood.

Tesla & LVMH Earnings & Reaction

Deep Dive on Tesla and LVMH Earnings and Market Reaction

Tesla (TSLA) Earnings:

• Q2 2024 Performance: Tesla reported Q2 earnings with an adjusted EPS of $0.52, missing the expected $0.62. Revenue came in at $25.5 billion, slightly above the expected $24.77 billion​ (Shacknews)​​ (Benzinga)​.

• Key Highlights:

  • Energy Storage: Tesla's energy storage deployment saw a significant increase of 158% year-over-year, reaching 9.4 gigawatt hours​.

  • Vehicle Deliveries: Tesla produced 410,831 vehicles and delivered 443,956 units in Q2, down from the same period last year​ (Teslarati)​.

  • Robotaxi Delay: The anticipated launch of Tesla's robotaxi platform was postponed, causing investor concerns about the company's future innovations and timelines​.

• Market Reaction: Tesla shares dropped 7.8% post-market due to the earnings miss and concerns over automotive gross margins and the delayed robotaxi event​.

LVMH Earnings:

• Q2 2024 Performance: LVMH reported disappointing sales figures, particularly impacted by a significant slowdown in China. This region saw a 14% decline in sales, hitting the company's overall performance hard​ (Yahoo Finance)​.

• Key Highlights:

  • Sector Impact: The luxury goods sector felt the impact, with LVMH leading the downturn and influencing peer stocks negatively.

  • Consumer Behavior: The data indicated a pullback in high-end consumer spending in key markets, primarily driven by economic uncertainties in China.

  • Fashion & Leather Goods: Although still a major revenue driver, this segment saw slower growth compared to previous quarters, heavily influenced by the reduced sales in China.

• Market Reaction: LVMH shares fell 6.5%, reaching a six-month low, as investors reacted to the weaker-than-expected earnings and the broader slowdown in luxury spending​

Analysis:

• Tesla: The market's reaction to Tesla's Q2 report reflects growing concerns over the sustainability of its growth, particularly with challenges in key markets like China and the delayed rollout of new technology. Investors are cautious about the company's ability to meet future earnings expectations without significant innovations or improvements in margins​.

• LVMH: The drop in LVMH shares underscores the sensitivity of the luxury market to regional economic shifts, especially in China. The slowdown in consumer spending in such a crucial market suggests potential long-term challenges for the luxury sector as a whole​.

Spot Ethereum ETFs: Key Insights from Day One

WHAT HAPPENED

• Launch Impact: Spot Ethereum ETFs saw net inflows of $107 million on their first trading day.

• Trading Volume: Total volume surpassed $1 billion, about 23% of what Bitcoin ETFs achieved on their debut.

• Leading Players:

  • BlackRock’s iShares Ethereum Trust (ETHA): Dominated with $266 million in inflows.

  • Bitwise Ethereum ETF (ETHW): Secured $204 million.

  • Fidelity Ethereum Fund (FETH): Attracted $71 million.

WHY IT MATTERS

• Market Sentiment: The stable Ethereum price at $3,450 indicates a cautious but optimistic investor sentiment, as they await further market developments.

• Regulatory Endorsement: SEC's approval of these ETFs underscores improved regulatory conditions and market maturity, which may pave the way for more crypto-based ETFs​ (Benzinga)​​ (SiliconANGLE)​.

• Competitive Landscape: BlackRock’s dominance reaffirms its market leadership, while Bitwise's strong showing suggests potential shifts in market dynamics​ (CoinGape)​​ (Crypto Briefing)​.

• Investor Behavior: Significant outflows from Grayscale’s ETHE ($484 million) highlight a potential shift from traditional trusts to more flexible ETFs, mirroring the post-Bitcoin ETF launch trend​ (Benzinga)​​ (Crypto Briefing)​.

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The BRRR is meant for informational purposes only. It is not investment advice. Please consult with your investment, tax, or legal advisor before making any investment decisions.ll