WSJ : Elon Musk Says Tesla to Use Humanoid Robots Next Year

Elon Musk Says Tesla to Use Humanoid Robots Next Year
CEO says the electric-vehicle maker would use the robots internally first before producing them for other companies

Elon Musk said Tesla TSLA 5.15%increase; green up pointing triangle will have humanoid robots in production to be used within the company next year.

He said Monday morning that Tesla would use the robot for internal use first and then aim to produce it for other companies in 2026. Tesla, an electric-vehicle maker, has been working on the robot for several years as part of its efforts to expand into robotics and artificial intelligence.

Musk, Tesla’s billionaire chief executive, said in a post on X, formerly Twitter, that he believed the humanoid robots would be “genuinely useful.” Tesla wants the robots to help produce its cars more efficiently, complete difficult chores and reduce labor shortages.

Musk showed off a prototype version in 2022 of a humanoid robot called Optimus that took a few steps, waved to a crowd and performed basic dance moves. He said it was the first time the robot had operated without a tether. He also demonstrated a sleeker but nonfunctioning model that he said was closer to production.

The humanoid robots, an offshoot of Tesla’s driverless-car technology, has excited some investors. Musk has long wanted to frame Tesla as an AI company in part by showing off its robots and car automation.

He has a record of predicting timelines that don’t always pan out. Musk said in an earnings call in April that he thought Optimus would be able to complete factory tasks by the end of this year and go on sale by next year.

Tesla shares rose 5% on Monday. The stock has risen roughly 75% since late April, a sharp rebound after a steep decline in the beginning of the year. Overall, it is roughly unchanged so far in 2024.

He said Monday that Tesla’s humanoid robots would first be in low production, which typically means something is made in small amounts. Musk said Tesla aimed to produce the robots in larger quantities for 2026.

He has said the company wanted the robots to have a price point below $20,000. The robots are expected to have conversational capabilities and include safeguards to prevent wrongdoing.

Companies in recent years have been ramping up work on humanoid robots that can do menial human tasks. Some companies have used the robots in warehouses to speed up logistics operations.

WSJ : Schaeffler Downgrades Guidance Amid Slow Autos Sector Recovery

Schaeffler Downgrades Guidance Amid Slow Autos Sector Recovery

Schaeffler lowered profitability and cash flow guidance for the year after peer Vitesco Technologies VTSC -0.17%decrease; red down pointing triangle, which it merges with in October, warned of a slow recovery in the automotive industry.

The German auto supplier said late Monday that it now expects a margin on adjusted earnings before interest, taxes, depreciation and amortization of 5% to 8% and a free cash flow of 200 million to 300 million euros ($217.8 million-$326.7 million) for the full year.

It previously expected an adjusted Ebitda margin of between 6% to 9% and a free cash flow of EUR300 million to EUR400 million.

The downgraded profitability guidance is a consequence of Vitesco Technologies’ warning earlier on Monday, when it cited lower sales amid a slow automotive-industry recovery, Schaeffler said.

Earlier this year, the two companies agreed to merge. Schaeffler’s new guidance is for the combined group as it assumes full consolidation of Vitesco as of Oct.1.

The decision to adjust the guidance also reflects a continuing weak performance of its bearings and industrial solutions division, the Bavaria-based company said.

Schaeffler said it expects to book second-quarter revenue of EUR4.19 billion, up from EUR4.01 billion in the same quarter last year. Meanwhile, weaker-than-expected profitability of the bearings and industrial solutions division led to an EBIT margin before special effects of 4.9 % in the quarter, down from 7.1%, and below market expectations, Schaeffler said.

Final results for the second quarter are scheduled to be published on Aug. 6.

FT : UN attacks companies’ reliance on carbon credits to hit climate targets

UN attacks companies’ reliance on carbon credits to hit climate targets
Draft policy document pushes for corporate cuts in emissions rather than using multimillion-dollar carbon trading market

The UN has outlined its opposition to companies using credits to cancel out their carbon dioxide footprint, putting it on a collision course with big oil and technology groups.

A draft document seen by the Financial Times and drawn up by a task force convened by UN secretary-general António Guterres says groups should not use carbon credits to offset emissions outside of state-regulated schemes.

The UN believes companies should invest in ways to curb their own emissions rather than relying on the multimillion-dollar carbon trading market.

Big polluters such as Chevron and ExxonMobil as well as technology companies such as Microsoft and Apple have included carbon offsetting in their plans to fulfil climate promises made to investors.

Industries that are carbon intensive in production, such as steel and cement, also rely on carbon credits in the private markets to offset their greenhouse gas emissions to meet net zero targets.

In theory, the proceeds of each credit funds a project that makes a cut or saving of CO₂ from the atmosphere, which could mean protecting an area of rainforest from deforestation or capturing and storing CO₂ underground. However, many schemes have been criticised because the amount of carbon removed or avoided is unverifiable or not permanent.

“I would hope and I would expect that serious organisations that are committed to protecting ecosystems . . . don’t shut down an avenue for channelling that carbon finance,” said Jeff Swartz, vice-president at BP’s trading and shipping arm, which buys and sells carbon credits.

Swartz, also a board member at industry body the Integrity Council for the Voluntary Carbon Market, said many of these ecosystems could be “at risk today of failing if they don’t get the sufficient level of climate finance”.

Industry figures expect the carbon credit market to grow. Boston Consulting Group in partnership with Shell last year published an estimate that carbon trading could rise to between $10bn and $40bn a year by the end of the decade.

However, the value of used carbon credits fell last year to $900mn from $1.4bn in 2022, according to data provider AlliedOffsets.

Guterres made his opposition to the reliance on carbon credits clear in a speech last year when he said business, investors, cities and regions should focus on cutting their own emissions and on “avoiding dubious offsets or carbon credits”.

The UN draft document said: “Carbon credits used cannot be counted as their [polluters’] own emission reductions” when purchased in voluntary markets outside of government-regulated schemes in which companies can trade permits giving them the right to pollute.

The document was prepared by the UN task force on global carbon markets, a group convened by the UN secretary-general’s climate action team.

The task force had input from leading UN agencies including the UN Framework Convention on Climate Change, which oversees the co-ordination of global efforts on climate issues, including at COP, the annual international climate gathering, where the development of carbon markets is a focus of attention. This year’s COP29 host country, oil and gas-producing Azerbaijan, has made the topic one of its priorities.

The UN declined to comment.

FT : Paris’s independent tailors discover a rich seam

Paris’s independent tailors discover a rich seam
Family ateliers are broadening their appeal to younger clients with more affordable services, such as made-to-measure

When it comes to bespoke menswear, one might think of London’s Savile Row or European countries such as Italy. But not Paris, where tailoring houses are scattered across the city, rather than in one district, and are found mainly through word-of-mouth. It is curious that there isn’t much of a bespoke tradition in the French capital, as men customarily wear suits to the office.

A turbulent macro environment has caused several bespoke tailors to leave the city. Last year, Kenjiro Suzuki left for Japan, while Emanuel Vischer closed his Paris outlet and reopened in Basel, Switzerland. Kees van Beers never recovered from the slowdown caused by Covid and shut his tailoring studio. Others have been absorbed by bigger companies: LVMH-owned Berluti bought French menswear label Arnys in 2012, and also picked up tailors Aïdée and Florian Sirven when their business went under a few years ago.

But for a handful of survivors, mostly small and independent, business has been good as customers globally resume travel and younger consumers take greater interest in tailoring, particularly where made-to-measure — a more affordable alternative to bespoke — is offered. Unlike bespoke services, where a new pattern is drawn up for each client, made-to-measure offerings are ready-made patterns that are adjusted based on a customer’s measurements.

Camps de Luca is a third-generation family business, founded in 1969, which makes suiting and other specialist formalwear. Communications director Clara de Luca, the granddaughter of co-founder Mario de Luca, credits Covid with bringing in a new batch of younger clients willing to pay the €8,000 price tag of its suits. “We had worries when we reopened but men’s attitudes had completely evolved,” she says.

Growing up, de Luca and her two brothers spent every Wednesday afternoon in the atelier, but there were no expectations for them to go into the family business. Instead, they were encouraged to explore other interests. So, in her twenties, de Luca worked in fashion marketing and later ran a restaurant in Cambodia, while her two brothers, Charles and Julien, got jobs in Parisian fine dining and London finance, respectively.

De Luca returned to the business in her thirties, and the brothers in their late twenties, because “we didn’t want it to be snuffed out”. She says the business was slowing down and their parents were uncertain about its future. It required her brothers, who today work as tailors in the company, to learn the basics of using a needle and thread before graduating to pattern-cutting, fittings and customer service.

Based on Rue des Pyramides in Paris’s 1st arrondissement, the Camps de Luca store boasts a bespoke room that allows clients to be fitted privately as well as more affordable options via a new made-to-measure line, Ateliers de Luca, which is half the price of its bespoke offering.

Similarly to de Luca, Lorenzo Cifonelli was discouraged from going into his family’s tailoring business, Cifonelli, which was founded in 1880 in Rome by his great-grandfather before its operations moved to Paris in 1926. His father had told him that tailoring was a tough business, and Cifonelli had his own doubts that bespoke menswear services could survive.

To make its offering more accessible, Cifonelli has expanded into made-to-measure, which are available in its newly opened stores on Rue François 1er in Paris and Clifford Street in London. Although Cifonelli says the bespoke business is still growing strong, thanks to surprising interest from regions such as Argentina, Brazil, Costa Rica and Mexico, and not just the US, France, Austria and Switzerland, where Cifonelli typically saw the most business.

Cifonelli’s suits are made in their own ateliers in Paris. On the same floor as the receiving rooms, 40 petites mains sit at tables sewing away in a warren. Some of them wear ties and bespoke trousers. Many are noticeably young, making Cifonelli an anomaly among tailoring houses in Paris, which, according to French tailor Julien Scavini, do not typically employ young people due to their lack of technical knowledge, usually accumulated by years of experience.

The high cost of French labour has led some bespoke tailors to source their labour overseas. Mario Alessandro Costa, who has run the tailoring shop Howard’s Mesure since 1995, has a family-owned atelier between Rome and Naples that manufactures all suit components, and contracts out to larger brands, such as Canali, too. It allows Costa to charge half that of his competition — a bespoke suit costs €4,500 — which is attractive to clients, he says. Still, made-to-measure accounts for a majority of the business, at 90 per cent.

Scavini still sees value in bespoke and occasionally makes a few special suits when asked. Since he has been in business, from 2011, he has made about 40 suits, contracting the production to a local 83-year-old tailor (another reason why he is reticent about making bespoke a core part of his business: “I’m scared that one day he’ll die suddenly and leave behind an unfinished suit,” Scavini says).

Cifonelli has made a point of hiring and training a younger workforce, “because people will retire”, he says, “so I have to think of the future”. Finding skilled petites mains is a challenge, he admits, particularly when it comes to bespoke, where the construction of a garment is typically divided among a team, each of whom specialises in specific components, such as attaching sleeves or hand-sewing buttonholes.

For made-to-measure outfits, companies often work with factories in eastern Europe on the full fabrication. “You don’t need savoir-faire for made-to-measure,” Scavini says. “It’s just business.”

>>> US After Hours Summary: CCK +5.9%, SAP +4.9% among big winners following ear

After Hours Summary: CCK +5.9%, SAP +4.9% among big winners following earnings; MEDP -13.8%, NXPI -7.4% retreating on quarterly numbers

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: CCK +5.9%, SAP +4.9%, RLI +4.8%, ZION +4.6%, WRB +4.2%, BOKF +3.9%, NBTB +3%, IPAR +2.3% (guidance), BRO +2%, NTB +1.9%, HSTM +1.4%, CLF +1.3%, CADE +0.6%, KREF +0.4%

Companies trading higher in after hours in reaction to news: TUSK +27.7% (reaches settlement agreement), TERN +4.2% (Citadel Advisors discloses 5.1% stake), NBTB +3% (increases dividend), AIOT +2% (delaying 10-KT filing), AZTA +0.4% (selected by FinnGen for health study), DOV +0.2% (acquires Marshall Excelsior Company for $395 mln), EQC +0.1% (Indaba Capital urges the company to cease exploration of transformative acquisitions), GPRK +0.1% (announces Q2 operational update), FBP +0.1% (new repurchase program)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: MEDP -13.8%, NXPI -7.4%, SSD -6%, AGYS -3.4%, CALX -3.2%, CATY -2.8%, CDNS -2%, AGNC -1.7%, ARE -1.4%, NUE -0.9%

Companies trading lower in after hours in reaction to news: BWAY -0.5% (files $100 mln mixed shelf), UPS -0.4% (to acquire Estafeta), BRBS -0.4% (files stock offering)

FT : Woodside aims to build ‘dream team’ for its global LNG ambitions

Woodside aims to build ‘dream team’ for its global LNG ambitions
Australian developer bullish on demand despite cost blowout at its main Scarborough project

Woodside Energy, the Australian company looking to transform itself into a global liquefied natural gas powerhouse, aims to build a “dream team” of investors to back its US expansion as it bets that demand for the fuel will continue to grow rapidly over the next decade.

Australia’s largest oil and gas developer announced a surprise $1.2bn takeover of struggling US LNG developer Tellurian this week, strengthening its foothold in a consolidating American energy market. 

Woodside chief executive Meg O’Neill said on Tuesday she hoped to close the deal quickly, allowing the Australian company to seek outside investors for Tellurian’s development of a Louisiana export terminal. 

As the Perth-based company released a second-quarter update, she told the Financial Times that recent stake sales in its large Scarborough project off the coast of Western Australia had set a precedent for its ability to bring in partners for Tellurian’s $25bn Driftwood project.

“We’ll be able to put together a dream team of partners,” she said. Japanese customers JERA and LNG Japan have acquired stakes in Scarborough, while Global Infrastructure Partners has also invested in the offshore project. 

Woodside has targeted US LNG deals since its 2022 merger with BHP’s oil and gas arm, according to O’Neill. She added that the Tellurian takeover provided an opportunity for the Australian company to “control our destiny” rather than buying a minority stake in existing projects.

James Byrne, an analyst with Citi, said in a note that Woodside may face an “uphill battle” on the deal’s merits, as the price of LNG contracts has been deflating. “If this persists over the timeframe to complete the Tellurian acquisition then it may be harder to sell down from 100 per cent working interest, leaving Woodside with more equity than they might like,” he said.

O’Neill said that Woodside remains “extremely bullish” on LNG with 50 per cent growth in demand forecast over the next decade, despite the push by some countries, including Australia, to reduce fossil fuel use and development. O’Neill said she expected “tremendous demand” to continue in Asia and Europe. 

However, development has become more expensive. Woodside said on Tuesday that the cost of developing Scarborough, which is two-thirds complete and due to deliver its first gas in 2026, has risen 4 per cent to $12.5bn because of design modifications needed.

O’Neill said that inflation had played a part in the cost increase but she was confident the project would be delivered at the new budget, despite some analysts predicting that the final cost could rise again. “We would not expect any further cost pressures,” she said.

Woodside shares dipped almost 3 per cent after its second-quarter update. 

O’Neill also said that the Tellurian acquisition would not alter its dividend policy, despite the increased capital expenditure of developing the US project. 

>>> US Close Dow +0.32% S&P +1.08% Nasdaq +1.58% Russell +1.66%

The stock market exhibited rebound action today after last week's declines. Mega cap stocks and semiconductor shares led the upside action after underperforming last week, but many stocks came along for the rally. The S&P 500 settled 1.1% higher and the Invesco S&P 500 Equal Weight ETF (RSP) settled 0.8% higher.

NVIDIA (NVDA 123.54, +5.61, +4.7%), Meta Platforms (META 487.40, +10.61, +2.2%), and Microsoft (MSFT 442.94, +5.83, +1.3%) were among the influential winners today on some buy-the-dip interest. With today's action, NVDA shares are flat so far in July, META shares are down 3.3% in July, and MSFT is 0.9% lower in July.

Many other stocks also logged gains, leaving nine of the 11 S&P 500 sectors higher. The information technology (+2.0%) and communication services (+1.2%) sectors led the pack thanks to the aforementioned names. The industrial (+1.1%) and real estate (+1.0%) sectors also jumped at least 1.0%.

Meanwhile, the energy sector logged the biggest decline amid falling oil prices ($78.43/bbl, -0.26, -0.3%).

Market participants are also digesting news that President Biden exited the 2024 presidential race and endorsed Kamala Harris for the candidacy. The news garnered muted responses in the equity and bond markets. The 10-yr note yield settled two basis points higher at 4.26% and the 2-yr note yield settled one basis point higher at 4.52%.

There was no US economic data of note today.

Looking ahead, Tuesday's economic data is limited to the June Existing Home Sales report at 10:00 ET. General Motors (GM), UPS (UPS), Albertsons (ACI), Lockheed Martin (LMT), Coca-Cola (KO), Philip Morris International (PM), and others report earnings ahead of Tuesday's open.

Nasdaq Composite:+20.0% YTD
S&P 500: +16.7% YTD
S&P Midcap 400: +9.7% YTD
Russell 2000: +9.6% YTD
Dow Jones Industrial Average: +7.2% YTD