Hey Influence Traders,
It continues to be a roller coaster week for the Biden Administration.
The Occupational Safety and Health Administration (OSHA) suspended enforcement of its COVID-19 vaccine mandate today, citing ongoing litigation that saw a federal appeals court uphold a stay on the requirement.
While the enforcement suspension is likely temporary, it’s still a smackdown for the Biden administration.
That black eye offset the win on the infrastructure bill and saw Biden’s poll numbers slip further.
The biggest issue for the administration is that they are being viewed as out of touch with mainstream America.
While inflation continues its upward climb, Biden and team are sticking to the narrative that injecting more money into the system will somehow not inflate the problem.
Liberal economic scion Larry Summers took the administration to task this past weekend and yesterday morning Obama economic advisor Steven Rattner penned a scathing NY Times editorial.
Being out of touch also leads to finger pointing … which no one likes.
For example, as fuel prices continue to soar, President Biden on Wednesday asked the Federal Trade Commission to look into potential “illegal conduct” by oil and gas companies in the market as the cause of soaring prices.
FTC chair Lina Khan will jump all over that opportunity.
She’s been waiting to sink her teeth into some big, bad corp actors.
Of course, the shutting down of domestic supply earlier this year could not be the culprit.
Andrew and I went deep on the impact of recent happenings in DC and told you about some trades to “Capitolize” on events.
I thought you might like some additional background info since we were short on time.
Debt Ceiling Default
December 15th is the deadline for lawmakers to lift the debt ceiling or risk a U.S. government default.
That news from Janet Yellen sent yields on bills maturing in late December higher.
The deadline is tied to obligations created by the infrastructure bill.
If the boondoggle human infrastructure bill passes, the timeline could accelerate.
While Mitch McConnel is staying mum as to his intentions to negotiate over the bill, some unnamed Dem sources believe that he will cave.
The acting head of the Office of Comptroller of Currency, Michael Hsiu, sent crypto spinning with comparison to financial instruments like credit default swaps that led to the 2008 crisis.
He views crypto as “synthetic banks” and that the regulatory landscape needs to be “leveled up,” which is code for more regs and taxes.
Pfizer (Ticker: PFE) continues to get boosts from the government.
The White House announced plans to spend billions expanding Covid vaccine manufacturing in the U.S. and boosting supplies in the developing world.
The administration also announced that it would pay $5 billion to immediately buy 10mm doses of PFE’s new antiviral pill (a full regimen requires 30 pills over five days).
PFE (and Moderna) make $1000 per second in vaccine revenue.
We discussed some old players and some new entrants in the EV game, but the fundamentals don’t match up and FOMO forces are at play.
The U.S. infrastructure package has $7.5B dedicated to accelerating the use of electric vehicles, as well as potential EV tax credits on the way in the upcoming Build Back Better bill.
Tesla (Ticker: TSLA) continues to lead the EV horse race.
New entrant Rivian Automotive (Ticker: RIVN), which exploded out of the IPO gates late last week, now has a market capitalization higher than Volkswagen (Ticker: VWAGY), which is the second-largest automaker in the world by volume.
To put that feat in perspective, VW manufactured 9.3M vehicles last year compared to the 150 electric trucks produced by Rivian.
Equally new entrant Lucid Motors (Ticker: LCID) has seen its market value close in on GM (Ticker: GM) and top Ford (Ticker: F) this week, even though it delivered zero vehicles last quarter and lost more than $500M.
Lucid went public via a SPAC merger in July and was its lead product declared car of the year by Motor Trend magazine (TSLA won in 2012 for the Model S).
Lucis has a hefty price tag, so we will see if that offsets the record setting range of 520 miles/charge.
Clearly, investors have an appetite for EV makers and are searching for the next TSLA.
Rounding out the new entrants is Sono Group (Ticker: SEV), which started trading this week.
SEV is a German solar-powered car startup.
Despite being pre-revenue, it saw its share price jump 3x on its first trading day.
New entrants are fun and sexy, but Andrew and I like F because of the F-150 Lightning and the fact that they are ahead in the manufacturing race.
Unlike many of their peers they can actually deliver EV cars.
And unlike TSLA, F is a union shop, which puts them in the good graces of the administration.
DC is creating ripples in the market.
Cutting Through the Noise for You.