Entrepreneur Elon Musk said he believes the Las Vegas tunneling system his Boring Company is creating under the city’s convention center could be done by next year, possibly months ahead of schedule.
Musk, the founder of Tesla and SpaceX, made the prediction on Twitter. The $48.7 million project will transport visitors to and from the massive Las Vegas Convention Center along three spots to the Las Vegas Strip, turning a 15-minute walk into a one-minute trip.
“Boring Co is completing its first commercial tunnel in Vegas, going from Convention Center to Strip, then will work on other projects,” Musk said on Twitter. When asked when it would be completed, he tweeted, “Hopefully fully operational in 2020.”
An earlier announcement had the convention center tunnel being completed by January 2021.
Steve Hill, president of the chief executive of the Las Vegas Convention and Visitors Authority, said this weekend that The Boring Company’s two-mile tunnel under the convention center is scratching the surface of a possible tunnel system that could span the entire Las Vegas Strip from Fremont Street to McCarren International Airport.
“We do think that over time, this just doesn’t have to be just a convention center or just a [Las Vegas[ Strip type of transportation system,” Hill said. “This can be a system that everybody in the valley can take advantage of.”
A map on The Boring Company’s websites shows a future tunnel system that would have stops at virtually every major Las Vegas casino and hotel on the Las Vegas Strip, taking visitors from the airport through the city.
“We also see it as a real opportunity to solve some of the congestion problems in Las Vegas going forward,” Hill said. “So it is helpful to start at the convention center, make sure that it works, work the kinks out and then look at the opportunity of moving into the city.”
Musk said his tunnel projects won’t replace other forms of transportation.
“These would be road tunnels for zero emissions vehicles only – no toxic fumes is the key,” Musk tweeted. Really, just an underground road, but limited to EVs (from all auto companies). This is not in place of other solutions, eg light rail, but supplemental to them.
Last December, Musk unveiled an “entirely new system of transport” with a demonstration of a 1.14-mile test tunnel intended to ease Los Angeles traffic.
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Biden Plan Could Mean 60% Tax Rates, But Here’s Who Will Get Stuck With Higher Taxes
New York and California may start losing high-income residents by the droves next year if Democratic nominee Joe Biden wins the election in a few weeks.
That’s because the two left-leaning states would have a combined federal and state rate over 60% under Biden tax plan.
Even New York resident and rapper 50 Cent tweeted earlier this week that despite his apparent dislike for President Trump, he said “Vote Trump” and “62% are you out of ya (expletive) mind,” when he learned about Biden’s tax plan.
According to calculations from Jared Walczak of the Tax Foundation, California residents earning more than $400,000 per year could face a combined tax rate as high as 62.6% under the Biden plan. New Jersey residents could see taxes reach 58.2% and New York would top out at just over 62%.
But somehow, it could get even worse.
Tax Rates Can Still Go Higher Under Biden
Walczak points out that if you include the contributions to the tax hikes by employers, which are often passed along to employees, the combined rates would jump to over 65% in California, 62.9% in New Jersey and 64.7% in New York City. They could still go even higher if California and New York raise taxes on high earners. This is something some legislators have proposed to try and close multibillion-dollar budget gaps.
“These rates would be the highest in about three and a half decades,” said Walzcak, “and imposed on a broader tax base than was in place previously.”
The Middle Class Will Suffer?
But Home Depot co-founder Ken Langone believes the wealthy won’t pay higher taxes at all – the middle class will.
“The middle class will not be exempt. Tragically, it will punish them. It isn’t going to punish us,” said Langone.
Appearing on Fox Business yesterday, Langone said due to Biden’s tax hikes, “the middle class will be in peril.”
He said that despite Biden saying the wealthy should pay more in taxes, the middle class will feel the effects of Biden’s tax plan. Langone said he is in favor of a tax code that is more progressive and equitable. This includes eliminating loopholes that favor the rich and large corporations.
“I don’t know if there’s any of us that have done well that will have a problem with paying more taxes, but it’s a ruse to think that hitting us and us alone is going to get the job done,” Langone said, adding ““It won’t and the middle class will be in peril and when you take money out of the hands of the middle class, you do a dramatic impact negatively on the economy.”
He said that increasing taxes on the middle class will lead to a recession.
“The problem is, when you go after the middle class, you begin to attack the backbone of the economy and we will have a bad recession. We will have a very bad recession,” Langone said.
“These are very precarious times and not the time to be screwing around,” he added.
Market Volatility Rises As Election Polls Show Tightening Race
The relatively calm markets earlier this month are giving way to more volatility as we approach the election. This is according to a team of strategists at JPMorgan.
“While it is perhaps true that during the first two weeks of October risk markets were supported by a widening of US presidential odds, which by itself implied a lower probability of a close or contested US election result, over the past week or so these odds have started narrowing again,” said a team of strategists at JPMorgan Chase, led by Nikolaos Panigirtzoglou.
According to recent polls by RealClearPolitics, in key battleground states, Democratic nominee Joe Biden leads President Trump by 3.9 percentage points, 49.1 vs. 45.2. That lead has shrunk from a 5 percentage point advantage for Biden about a week ago.
A general election nationwide poll by RCP shows a wider 8.6 percentage-point lead for Biden. However, there are many who feel those polls are not correcting for sampling bias.
MarketWatch recently interviewed Phil Orlando, the chief equities strategist at Federated Hermes. There, he said he doesn’t believe the polls accurately reflect how close the race is. In relation to this, he pointed to the surprise win by Trump against Democrat Hillary Clinton in 2016.
“Our base case is that the polls are wrong, there’s an oversampling biased error that a lot of polls aren’t correcting for,” Orlando said.
With a tightening race for the White House, volatility has returned to the market. It will also likely increase in the final two weeks leading up to the election.
A report put out yesterday by SentimenTrader showed that the CBOE Volatility Index or VIX, jumped to levels last seen during the Great Financial Crisis, and tends to rise as stocks fall as it is typically used as a hedge against market downturns.
Market analysts use the ratio to measure how speculative traders are getting. A rise in the put/call ratio means that investors are expecting plenty of volatility between now and November 3.
The VIX, which measures investor bullish or bearishness on the S&P 500 for the next 30 days, is currently near 29, well above its historical average between 19 and 20. This week alone the VIX jumped 6.3%.
Source of Volatility
Jeffrey Mills, the chief investment officer at Bryn Mawr Trust, said some of the volatility likely comes from investors trying to position their portfolios based on who they perceive will win the election. “There could be some front-loaded selling but I do feel like that’s a near-term phenomenon,” he said. But he says no matter who wins, there’s really only one place to invest, and that’s the stock market.
“There is going to be this continued pull toward equity markets — where else are you going to go when you need to earn a certain percentage to fund retirement, fund education?”
If investors are moving money today based on who they think will win the election, Daniel Clifton, head of policy research at Strategas Securities said each candidate will likely benefit different sectors.
A Biden victory will be good for stocks in the infrastructure, renewable energy and technology sectors, said Clifton.
If President Donald Trump is reelected, Clifton said there’s “huge upside” in some sectors. These include defense, financials and even the for-profits like prisons, education and student loan lenders.
Tesla Keeps Streak Intact, Posts Profitable 3rd Quarter
The winning streak continues Tesla posts a profitable 3rd quarter, it’s fifth consecutive. The EV company posted a net profit of $331 million for the three-month period ended Sept. 30. Tesla also confirmed its goal of delivering 500,000 vehicles within the year. CEO Elon Musk calls the latest quarter as Tesla’s “best quarter in history.” The company posted a record of $8.77 billion in revenue against estimates of $8.28 billion. This is an increase of 39% from a year ago. Analysts surveyed by FactSet expected sales of $8.28 billion. Shares went up over 3% at about $438 in after-hours trading. Since January, Tesla shares have grown 500%.
500,000 Deliveries on Target
Despite the pandemic, the company will proceed with its original goal of 500,000 cars in 2020. In a statement, Tesla affirmed its goal. “While achieving this goal has become more difficult, delivering half a million vehicles in 2020 remains our target,” it said. This entails building more cars at its Shanghai factory, and improvements in logistics and delivery.
Earlier in October, Tesla reported 139,593 vehicle deliveries in the quarter. This places the 500,000 targets is within reach. Model 3 and Model Y took up the bulk of deliveries and growth during the period. The more expensive Models S and X dropped by 12% compared to 2019. As such, Tesla started slashing prices for its higher-end models to increase demand. The Model S reduced its prices twice to $69,420.
China Remains the Crucial Market
China remains the key market for Tesla’s profitable 3rd quarter. Tesla’s auto sales in China climbed nearly 13% in September, their sixth straight monthly gain. The company’s Shanghai Gigafactory raised production due to demand. Demand for the Model 3, especially in China, led to a retooling. From 150,000 units per year, it now handles 250,000.
China’s “Golden September, Silver October” is the country’s high point in car purchases. Sales reached 2.57 million vehicles last month. The China Association of Automobile Manufacturers (CAAM) said that sales were still down. For 2020, 17.12 million vehicles got sold, which is 6.9% below last year.
Electric vehicles enjoyed brisk sales during the period. Sales increased by 67.7% to 138,000, which is the third straight month of gain. Tesla reduced its Model 3 prices by 8%, down to 249,900 yuan ($36,805).
Based on September sales, the momentum looks to carry over to October. Haitong International analyst Shi Ji expects even better numbers this month. He said: “Based on our dealer channel checks, the growth in momentum extended into the October Golden Week, as retail sales exceeded dealers’ expectations”
A Decrease in Credit Sales
While revenue rose, regulatory credits fell down from $428 million to $397 million. Ben Kallo of RW Baird observed that “Regulatory credits are a big part of the EPS beat. But that’s part of the game: Tesla’s competitors are paying them, and Tesla is reinvesting that into their factories in Berlin and Texas.”
Tesla generates extra income by selling credits. Manufacturers buy these credits to comply with carbon-emissions standards. They come from all over California, Europe, and other areas. Investors prefer seeing profits from the core business of selling cars. A Bloomberg analyst thinks that the S&P snub might be due to credit sales. Analyst Michael Dean noted “question marks about the sustainability of regulatory emission-credit sales, which are currently underpinning earnings.”
For 2021, Tesla aimed for even more increases in production. This includes its all-electric semitrailer truck and its pickup truck. The company hopes to get more cars out of its China factory. It also expects its newest plants in Berlin and Texas to start churning cars. Musk estimates the 2021 production could reach 840,000 to 1 million vehicles.
The company also laid out plans during its recent “Battery Day” event. Musk announced that the company will start making its own “tabless” batteries. These batteries improve the cars’ range and power. The improvements will help bring down the cost to produce a car. Soon, Tesla hopes to launch a vehicle priced under $25,000.
Watch this as Yahoo! Finance reports on Tesla earnings: Tesla posts a profitable 3rd quarter, it’s fifth consecutive and EPS estimates:
Are you thinking of buying an electric vehicle? If so, will you get a Tesla? Or do you see yourself holding out for more choices in the near future? Let us know what you think about EVs, and if you’re planning on getting one soon? Drop a line on the comments section below.
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