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Elon Musk emails Tesla employees: ‘Breaking even is looking super tight’




This photo of a production version of Tesla’s Model Y was included in the company’s Q4 2019 earnings report.


Tesla CEO Elon Musk sent one of his characteristic motivational emails to all employees at his electric vehicle company on Monday around noon California time.

In the email, which was shared with CNBC, he urged workers to “go all out” with vehicle production and deliveries, and told them that “breaking even is looking super tight.”

It’s not clear whether “breaking even” was referring to the company’s profit margin, which may require it to sell a certain number of vehicles during the quarter, or another metric, like production numbers versus expectations or previous quarters’ figures.

Tesla is expected to report its second quarter vehicle production and deliveries numbers this week, before the 4th of July weekend. 

In its first quarter earnings update this year, Tesla walked back prior guidance saying that it has “capacity installed” to hit 500,000 vehicle deliveries in 2020, but remains uncertain how quickly its U.S. car plant, and suppliers, can ramp up production following Covid-19 restrictions

At that time, Tesla also said its near-term profit guidance was “on hold,” dampening hopes it may achieve its first full year of profitability.

The company is gunning for inclusion on the S&P 500, which requires a minimum of four consecutive quarters of profitability. Tesla has reported profits in its last three quarters.

Earlier this quarter, Tesla’s main manufacturing facility in Fremont, California, was shut down for more than a month as officials ordered non-essential businesses to shut down to slow the spread of Covid-19. Tesla and Musk clashed with officials over the restrictions and resumed vehicle production shifts the second week of May, days before the county would green light the company’s “site-specific plan” to allow employees back at work. 

The company is producing its latest Model Y crossover SUVs in a massive tent, where it previously made a portion of its Model 3 electric sedans. In the tent, known as GA4 (or General Assembly 4) workers make cars with more manual processes, rather than the sophisticated robotics and extensive automation they use in an indoor part of the plant. 

In the first quarter of the year, Tesla said it delivered around 88,400 vehicles including combined deliveries of 76,200 Model 3 sedans and Model Y crossover SUVs, and combined deliveries of 12,200 of the older and more expensive Model S and X vehicles. It produced about 14,000 more cars than it delivered in the first quarter — making a total of 102,672 vehicles.

Here’s the email in its entirety, transcribed by CNBC.

Subject: Down to the last few days

To: Everybody

From: Elon Musk

Date: June 29, 2020

Breaking even is looking super tight. Really makes a difference for every car you build and deliver. Please go all out to ensure victory!





Why coronavirus contact-tracing apps aren’t yet the ‘game changer’ authorities hoped they’d be




Germany’s coronavirus contact-tracing app, Corona-Warn, is displayed on an iPhone in Berlin on Tuesday, June 16, 2020.

Krisztian Bocsi | Bloomberg via Getty Images

Coronavirus contact-tracing apps were meant to play a significant role in how some countries dealt with the spread of the disease. But so far, they’ve had a limited impact.

The apps alert people who come into close proximity with someone who has tested positive for Covid-19, the idea being that the “contacts” of that sufferer would then get tested and self-isolate.

They were once heralded as a crucial part of some countries’ plans to lift their lockdown restrictions. In the U.K., for instance, this type of app was regularly referred to in the daily coronavirus briefings, however now the government is playing down its significance and has had to completely revamp it.

Many of these apps rely on Bluetooth technology to send out notifications when two smartphone owners approach each other. Some of them even track location data through GPS. But early in the development of such platforms, campaigners flagged major concerns over how they would approach privacy.

Enter Apple and Google. In April, the companies set out to introduce a “decentralized” framework for contact-tracing apps that would aim to both protect user data and ensure they still work once people start traveling abroad. While Apple is often praised for taking user privacy seriously, Google has been a particular target for criticism over tech platforms’ shortcomings on data protection. All of a sudden, it was winning plaudits for an apparent commitment to ensuring privacy by design.

“They certainly created a system which can be used for proximity tracing without risking trust from centralization of personal data,” Michael Veale, a lecturer in digital rights and regulation at University College London, told CNBC.

Veale is part of a team of researchers who came up with a system known as DP-3T, or Decentralized Privacy-Preserving Proximity Tracing. It’s the protocol on which Apple and Google based their own contact-tracing model.

“Whether any of these apps are useful to fight the virus on the ground is yet to be seen,” said Veale, though he added it was “too early” to rule them out.

Not a ‘game changer’

In May, a report said Iceland had achieved the largest penetration of any virus-tracking app, with 38% of its 364,000 inhabitants installing it. But the Iceland app, which collected people’s GPS data, “wasn’t a game changer,” according to Gestur Pálmason, the deputy chief inspector of Iceland’s Covid-19 tracing team. Oxford University researchers have said 60% of a country’s population would have to download a tracing app in order for it to be effective.

“There isn’t a single country in the world to date that would be able to point to an app and say: ‘That was a game changer,'” Stephanie Hare, an independent technology researcher, told CNBC.

Singapore, which was seen as a pioneer in the development of tracing technology, has seen about 2.1 million downloads of its app. This translates to about 37% of the country’s population — still well below the recommended 60% threshold. And although digital tracking measures seem to have helped in countries like China and South Korea, critics say that these technologies came at the expense of privacy.

In Norway, health authorities were forced to pull their contact-tracing app after a warning from the data protection regulators. The Scandinavian country’s app was ranked alongside Bahrain’s and Kuwait’s on Amnesty International’s list of the “most alarming mass surveillance tools” used to track the virus. It used location data as well as Bluetooth, and processed proximity data centrally rather than on individual smartphones.

“It’s very much being pitched as: you either care about human life or you care about privacy,” Raha Rasha Abdul Rahim, deputy director of Amnesty International’s technology division, told CNBC. “You can absolutely still have a useful contact tracing app that does give respect to people’s human rights and privacy.”

France launched a tracing app that used Bluetooth to find the contacts of coronavirus patients. But like Norway, the app didn’t adopt Apple and Google’s model. That may have been to the detriment of its success, as just 14 people of the 1.9 million who downloaded the app received notifications to say that they’d been exposed to someone who was coronavirus-positive. Like the U.K., France had also touted the app as a key part of the country’s strategy to slow the spread of the virus.

Apple and Google set the standards

The U.K. has now backpedalled and said it will apply Apple and Google’s technology to its app. The government wanted to push ahead with a centralized model that stored data on a central database, but discovered the app was far less effective on iPhones than Android devices due to privacy measures imposed by Apple’s operating system. The only alternative was to succumb to the tech giants’ approach.

“You have a strange situation where they’re dictating the kind of privacy measures that need to be in place for contact tracing,” Amnesty’s Abdul Rahim said of Apple and Google. “It’s an interesting dynamic because it shows you the power of the tech giants, that ultimately we’re having to rely on their good will to put in place security-protecting measures.”

However, Apple and Google’s model is still struggling to catch on in many countries. In the United States, just three states have openly said they will use the tech firms’ software to develop their tracing apps. And there has so far been no indication of an effort to introduce the technology at a federal level.

And even the Apple-Google model has its limitations. For example, there are fears that a reliance on Bluetooth rather than location tracking could lead to a flood of false positives due to the range of detection. Still, privacy advocates maintain it’s the best option available right now. And though the rollout of apps worldwide has been shaky so far, researchers think they’re still worth pursuing as a supplement to manual contact tracing.

For them to work, experts say they need to be part of a wider health strategy that encompasses mass testing and strict physical distancing measures. Germany’s app — which adopts the Apple-Google approach — has shown signs of promise, with 14 million people having downloaded it since its launch last month. 

“Contact-tracing apps need to be part of a much broader health care response,” said Abdul Rahim. “That includes widespread testing and access to adequate healthcare.”


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Surrounded by trees and with 1,200 solar panels, this Norwegian building could change how we think about factories




From cars to tables and computers to radios, factories manufacture a host of products integral to modern life. In many cases these facilities can be energy intensive and, if we’re being honest, not very pleasing to look at.  

As concerns about sustainability and the environment mount, however, a number of firms are attempting to reduce the impact of their operations with factories and offices using clever design, interesting materials and renewable sources of energy.

Earlier this week, designs for a new furniture factory in Norway were released, with the firms involved in its development hoping it will be sustainable, aesthetically pleasing and technologically advanced.

Known as The Plus, the 6,500-meter-squared building will be located in Magnor, Norway and surrounded by trees, with the site also functioning as a 300-acre park.

The architecture practice involved with the project’s design is the Bjarke Ingels Group (BIG) and their client is Vestre, a Norwegian furniture manufacturer established in 1947.

Construction work is due to start in August and when finished, the facility will be home to a range of sustainable features. According to BIG — which has offices in Copenhagen, New York, Barcelona and London — the building’s façade will be formed of local timber, recycled reinforcement steel and low-carbon concrete, while 1,200 solar panels will be installed on its roof. Overall, it’s hoped that greenhouse gas emissions from The Plus will be 50% less compared to a conventional factory.

A dedicated website outlining the plans for the building states that more than 90% of water used in production will be recycled. It adds that the factory will use “self-learning industrial robots” and driverless electric trucks. The robots will, according to the site, be able to apply color coatings to products using artificial intelligence and “object recognition” technology.

The Plus is one of many sustainability-focused buildings currently in development. Drinks giant Diageo recently announced plans for a carbon-neutral whiskey distillery in Kentucky.

In a statement issued Monday, Diageo, which produces drinks including Johnnie Walker, Smirnoff and Guinness, listed a number of features that it hopes will boost the sustainability of the distillery and its operations.

These include: the facility running on 100% renewable electricity; the use of LED bulbs indoors to boost energy efficiency; and all vehicles operated there being electric.

Meanwhile, last week, Australian tech firm Atlassian unveiled plans to construct what it described as “the world’s tallest hybrid timber building.”

The design will incorporate timber and a façade of glass and steel that will also use solar panels and have “self-shade capabilities.” Plans are also in place for a staggered outdoor garden to be integrated into the structure.


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Handicapping the market from here — what history tells us about the odds the comeback continues




A view of the New York Stock Exchange (NYSE) is seen at Wall Street on June 29, 2020 in New York City.

Angela Weiss | AFP | Getty Images

Can history help handicap where markets head from here after the extraordinary path stocks have taken so far this year?

 The violence and velocity of the crash-and-surge moves in the major indexes has placed this market in rare company, with relatively few precedents to mine for hints of what has tended to come next.

Yet, predictably, the probabilities don’t line up in a single direction. So an investor trying to decipher the lessons of the past has to play a game of Always, Usually, Seldom and Never, classifying the evidence accordingly. 


The S&P 500 rebounded by nearly 20% in the second quarter, only the tenth calendar quarter since World War II when it gained more than 15%. Following the prior nine quarters, the index was always up the following three months, for an average of 9%, with the smallest advance an impressive 4%, according to Bespoke Investment Group.

In the ferocious bounce and follow-through rally off the climactic market low in late March, a series of rare “breadth thrust” readings were registered, measuring intense momentum and voracious demand for virtually every stock following the comprehensive liquidation through March.

One of these readings, tracked for years by Ned Davis Research, comes when at least 90% of all S&P 500 stocks surpass their 50-day moving average. This threshold was reached May 26. In the prior 19 times this has occurred since 1967, the S&P was always up over the following year, by an average of 17%.

Unanimity is rare when it comes to historical patterns, so these so-far foolproof setups have won plenty of attention and lend some weight to the “don’t fight the tape” bullish case.

Still, these analyses cover very narrowly defined conditions, and neither ten nor 19 instances from the past remotely approaches a statistically robust sample.


Then there’s the fact that they don’t quite fit with some circumstances that usually occur in situations like the one this market is in.

Let’s not forget that the power and persistence of the recent rally has come in part as a not-quite-equal reversal of similarly rare downside momentum and oversold conditions of the preceding collapse.

This whipsaw, on a net basis, left the S&P 500 down by about 4% year to date through six months. The index has been negative at the halfway mark 35% of all years since 1928. Over the second half of those years, the index usually delivers subpar returns. On average, according to Cornerstone Macro technical strategist Carter Worth, the second half of these years produced a 0.7% gain. Of the past six times the S&P was underwater at June 30 (2000, 2001, 2002, 2005, 2008 and 2010), it fell further four times, though the last instance in 2010 the S&P ran higher by 22% in the second half to salvage the year for the bulls.

Speaking of usually, July is usually a good month for stocks, the best of the summer months, showing a gain three-quarters of the time the past 20 years.

Then again, while stocks usually do fairly well in election years, they usually do quite poorly leading up to an election in years when the incumbent party loses the White House, as this chart from LPL Financial shows. Of course, no one knows how the election will break, even as President Trump trails in the polls, but the market usually seems to foretell the result. Or maybe it’s all just coincidence.


Then again, even if the political setup is a challenge, this might be an offsetting comfort to bulls: The market has seldom regained more than three-quarters of a bear-market-sized decline – as the S&P 500 has now after a 35% crash – and failed to continue rising back to and above the old peak. In other words, such a sizable bounce has rarely ended up as a doomed bear-market rally. An exception was the initial rebound from the 1929 crash.

The market has likewise seldom followed one quarter’s 19%-plus drop with a 19%-plus rally, as it has the past two quarters. And, once again, the only other such occurrences were during the Great Depression: once in 1932 and once in 1938.

Stocks also have seldom got into serious difficulty soon after retail investor survey performed by AAII has shown more than half its respondents bearish on the equity outlook, as has repeatedly been the case during this three-month recovery.


Historical analogies such as all of the above always reliably draw the response from some people that history is now irrelevant because today’s situation is “unprecedented,” whether due to Federal Reserve activism or the vagaries of a pandemic or whatever other reason.

In general, these objections miss the point that the specific circumstances are always different, but the markets tend to metabolize information in familiar ways based on crowd psychology and the feedback loops inherent in capitalism.

Yet perhaps it makes sense at least to nod in the direction of current conditions that do seem a bit exceptional.

The S&P 500 has never been as concentrated in technology  – broadly defined – as it is today. The S&P tech sector plus FANG – Facebook, Amazon, Netflix and Google parent Alphabet – now account for more than 40% of the index. Spin this as a positive (higher valuations justified due to superior growth and profitability) or negative (extreme concentration risk in similar digital business models) as you like.

There is also a distinct rhythm to markets that, perhaps, makes it a bit more prone to producing extreme momentum readings of the sort that the bullish outlooks above are based on.

Frank Cappelleri of Instinet tracks the NYSE TICK index, a gauge of how many stocks were up or down on their last tick – a proxy for all-or-nothing order flow. Eight of the 12 lowest TICK readings in history have come this year.

And 10 of the 19 breadth-thrust readings since 1967, described above that showed a 100% one-year win rate for stocks thereafter, have occurred in the past ten years.

Does any of this matter in handicapping the market? Perhaps best to take it all as useful context, rather than prophesy — recognizing that the weight of the evidence seems to favor further upside in coming months but offers no guarantees.


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