# 668 - 🏆 Africa’s new gold-backed currency

Good morning. If you need any more proof that hype is high for today’s solar eclipse, check out this map of hotel bookings within the path of totality. But, much like you wouldn’t want to stare directly at the eclipse, you might want to avoid looking at how much those hotels cost. Sure, the eclipse is bound to be stunning… but is it worth dropping $949 on a room at a Super 8?

AUTOS

Pickup Sales Are In Decline, Thanks to High-Interest Rates and Lower Spending

America loves pickup trucks — even if their only cargo is family, friends, and groceries. For the 41st consecutive year, the Ford F Series was 2023’s most popular vehicle in the country, boasting 677K registrations. However, this nearly half-century love affair is suffering at the hands of the American economy.

Built tough… but is it worth the price? American truck dominance is no longer certain as demand for pickups declines. With higher interest rates and dwindling savings, fewer Americans are willing to fork out $50K-100K for a fully loaded model, especially when the average price of a new car hovers around $47K. That’s bad news for Detroit’s auto giants, which rely on full-sized pickups to drive profits.

  • Ford ($F) witnessed a 10% plunge in truck sales in the first quarter — while Stellantis ($STLA), Ram’s parent company, faced an even steeper decline of 15%.

  • Both companies held more idle inventory than their competitors, with Ram boasting more than 101 days’ worth of pickup stock.

Auto barometer

Despite their differences, truck sales are starting to look more like EV sales — which have dipped as Americans have tightened their financial belts and embraced smaller, more affordable rides. This shift has prompted many EV automakers to slash prices and offer financing on preferred terms, but consumers are increasingly turning to more practical alternatives.

  • Compact SUVs and budget-friendly sedans are gaining traction, as evidenced by robust sales growth for Toyota’s RAV4 and Honda’s CR-V in the latest quarter.

  • Hybrids are also on the rise, with Ford experiencing a 42% surge in sales of light hybrid models, offsetting the drop in truck sales.

Forward-looking: Legislative and activist calls to hike registration costs for heavy vehicles and impose aggressive emission fees could further inflate the price tag of America’s beloved F-150. However, despite these challenges, the pickup truck business may not be at the end of the road, especially if interest rates ease up.

PARTNERED WITH ENERGYX

The Next Gold Rush

Lithium is essential for batteries in electric cars, renewable energy storage, and even smartphones. That’s why demand for lithium is projected to grow 20x by 2040.

So when EnergyX revealed that their technology could extract 300% more lithium than traditional methods, investors everywhere took note—General Motors included.

GM is the lead investor in EnergyX’s $50m funding round. And you can join them.

  • That means you have the unique opportunity to get in on the ground floor of a company just as they’re set to unlock the US lithium supply.

  • 📈 EnergyX’s stock price just increased, thanks to growing demand and their first acquisition of lithium resources in Chile.

LARGECAP RECAP

💸 Zimbabwe wants to fix its hyperinflation problem with a new gold-backed currency

Since 2008, the southern African country of Zimbabwe has cycled through five different currencies — and after a years-long battle with hyperinflation and the issuance of a $10T banknote, the country is hoping a sixth currency will fix its economic woes. Today, Zimbabwe put the ZiG into circulation — a shiny new replacement, unlike anything the world has seen in two decades.

  • The ZiG, short for Zimbabwe Gold, is backed by the country’s gold reserves — making it the world’s first gold-backed currency since Switzerland abandoned the gold standard in 1999.

  • According to the government, the currency will be supported by some foreign exchange reserves and other precious metals, with an initial exchange rate set at 13.56 ZiG per US dollar.

Nobody will miss the dollar… The Zimbabwe one, at least. According to Financial Times, the Zimbabwean dollar traded at Z$36K to the US dollar, which has become the country’s preferred form of legal tender. However, the introduction of the ZiG offers hope for stability in a nation plagued by decades of fiscal mismanagement and monetary instability.

🛍️ Once-thriving direct-to-consumer brands face a market reckoning

As interest rates soar and companies prioritize profitability, many once-popular direct-to-consumer (D2C) brands are feeling the squeeze. These companies, which flourished during the days of low interest rates, are now facing the music — with their stocks declining up to 75% from their peaks.

  • Formerly high-flying growth stocks like SmileDirectClub have gone bankrupt, while others such as Blue Apron and Casper have been acquired and taken private at reduced valuations.

  • Even well-known brands like Warby Parker ($WRBY) lost $63M last year — though they insist they’re on the path to profitability.

Adapt or die: Brands with strong name recognition and appealing products could make it — they just have to get creative. Many are exploring hybrid strategies where they sell online and in stores. Some are also looking internationally. However, despite efforts to diversify, losses continue to mount for brands like Allbirds ($BIRD), suggesting that the road to recovery may be lengthy for these firms.

JOE’S MARKET PULSE

Markets & Economy

The US economy added 303K jobs in March: Unemployment dropped to 3.8% as the labor market beat expectations once again. Wage growth, an important metric for inflation, grew 4.1% YoY, the smallest annual increase since June 2021. [Read]

Ripple ($XRP) launching stablecoin: Despite struggles with enterprise clients and a $2B SEC fine, the company plans to launch a US dollar-pegged stablecoin later this year. [Read]

ADHD drug fill rates are falling: Even as demand grows for the likes of Adderall and Vyvanse, fill rates have fallen 10% in the past two years — which could have an economic impact as workers who rely on the drugs can struggle with productivity. [Read]

Business & Wealth

Tesla ($TSLA) reportedly abandons plans for low-cost EV: Creating affordable EVs was Musk’s original “master plan” during the early days of Tesla, but Reuters says he’s canceling the effort as Chinese automakers flood the market with cheap EVs (something he refutes). [Read]

Disney+ to curb password-sharing: Such a crackdown led to a jump in signups and revenue for Netflix ($NFLX), so now other streamers are taking their turn — and in Disney’s ($DIS) case, will hopefully help them reverse streaming losses. [Read]

Could Alphabet ($GOOG) buy HubSpot ($HUBS)? Big Tech has hesitated to make megadeals amid increased regulatory scrutiny from the Biden WH — but that hasn’t stopped Google’s parent company from mulling a purchase of the $35B marketing software firm in what could be its biggest deal yet. [Read]

PARTNERED WITH NEOS FUNDS

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  • As of 3/31/24 – their annualized distribution yields were 11.96% and 14.25%, respectively.

Learn more about SPYI and QQQI to see how you can pursue tax efficient monthly income within your portfolio.

CHART

DIGIT OF THE DAY

ChatGPT Is Rapidly Growing Into a Household and Corporate Staple With 23% of Americans Using It

Could ChatGPT outshine Google ($GOOG)? Nvidia’s ($NVDA) share price says yes, but what does the data indicate? It’s slowly getting there. According to Pew Research, ChatGPT usage among Americans rose to 23% in February, up from 18% last July. The younger demographic leads the charge, with usage spiking to 43% among those aged 18-29. Additionally, in the corporate realm, OpenAI is witnessing a rapid uptick in adoption among businesses embracing AI.

  • In a Bloomberg interview, OpenAI’s COO Brad Lightcap said enterprise users jumped from 150K in January to 600K today, adding that 2024 will “be the year of adoption for AI.”

  • Lightcap also said, “The supply chain will need to adapt to what we think is going to be this highly inflected and nearly exponential demand in the next 10 years.”

Good times for AI engineers: As sales soar, expenses follow suit. OpenAI is in talks with publishers to access content for training its AI and integrate it directly into ChatGPT. The fight to secure talent is also heating up, with AI researchers departing Big Tech firms to launch their own AI startups, prompting a talent war among industry giants and pushing the median compensation for AI engineers to $400K.

EXTRA JOE

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