Closing Bell
U.S. markets gave up most of Wednesday's gains during the final session of the month Thursday as a fresh set of steel and aluminum tariffs levied against U.S. allies weight on stocks.
The Dow Jones Industrial Average declined 1.02%, or 251 points to 24,416, while the Nasdaq fell 0.27%, or 20 points to 7,442, and the S&P 500 dropped 0.69%, or 19 points to 2,705.
Model 3 Teardown Reveals Possible $28,000 Production Cost
A German engineering firm has torn down a Tesla (TSLA) Model 3 and has estimated that the vehicle costs about $28,000 to produce.
The firm estimates that materials and logistics cost $18,000 for the vehicle it reviewed, while labor costs ran about another $10,000.
The base price for a Model 3 is about $35,000, giving Tesla a potentially lucrative profit margin for the vehicle.
A vehicle teardown from earlier this year placed the cost of producing the vehicle near $35,000. The firm estimates that a 10,000 vehicle a week build would deliver a significant headwind to the company's bottom line.
Waymo to Add 62,000 Chrysler Pacificas to Robot Fleet
Waymo, Alphabet's GOOGL self-driving vehicle arm, announced that it could add as many as 62,000 Chrysler Pacifica Hybrid (FCAU) minivans to its fleet of vehicles.
The deal could be worth about $2.5 billion for Fiat Chrysler is Waymo purchases the maximum number of vans, which have a base price of about $40,000.
"FCA is committed to bringing self-driving technology to our customers in a manner that is safe, efficient and realistic," Sergio Marchionne, Chief Executive Officer of Fiat Chrysler Automobiles, said in the statement. "Strategic partnerships, such as the one we have with Waymo, will help to drive innovative technology to the forefront."
Micron's Run Is Over, Morgan Stanley Says
Micron Technology Inc.'s (MU) valuation is untenable, according to Morgan Stanley.
Micron shares were falling 5.4% to $59.20 on Thursday after Morgan Stanley analyst Joseph Moore downgraded the stock to equal weight from overweight based on valuation. Moore reiterated his price target to $65 a share, representing 4% upside from the stock's close on Wednesday, May 31.
The firm lauded Micron's memory chip business, but the fact that the stock has jumped 40% in just three weeks has Moore spooked and said he sees "storm clouds on the horizon." Micron shares have risen 92% in just 12 months, compared to a 12% increase for the S&P 500
"After being bullish on memory for the last two years, we are moving to a neutral stance. DRAM remains strong but looks priced in as MU is very close to our PT," Joseph Moore said Thursday. "We would rather err on the side of caution in an environment where we can see storm clouds on the horizon."
Zillow Predicts Next Housing Recession Will Occur in 2020
Economists and housing experts surveyed by Zillow (Z) believe that the next housing crisis is on track to begin in the first quarter of 2020.
The quarterly survey polled more than 100 real estate experts and economists about their predictions for the housing market. Nearly half expected the next recession to begin in Q1 2020.
"As we close in on the longest economic expansion this country has ever seen, meaningfully higher interest rates should eventually slow the frenetic pace of home value appreciation that we have seen over the past few years, a welcome respite for would-be buyers," said Zillow senior economist Aaron Terrazas. "Housing affordability is a critical issue in nearly every market across the country, and while much remains unknown about the precise path of the U.S. economy in the years ahead, another housing market crisis is unlikely to be a central protagonist in the next nationwide downturn."
New Round of Tariffs Weigh on Stocks
The U.S. will place tariffs on steel and aluminum imports from Canada, Mexico and the European Union, Commerce Secretary Wilbur Ross said.
The tariffs go into effect on Friday, subjecting some of the U.S. closest allies to the same tariffs that most other countries are also subjected to.
Canada and Mexico had previously received temporary exemptions to the tariffs as the countries negotiated a new version of the North American Free Trade Agreement.
Deutsche Bank Tanks as Fed Deems U.S Business 'Troubled'
Shares of Deutsche Bank AG (DB) were down 5.4% premarket after the U.S. Federal Reserve designated the German bank's U.S. operations as being in "troubled condition."
The move from the Fed is rare for a major financial institution. The Fed made this designation a year ago, but it hasn't been made public until a Wall Street Journal report Thursday.
As a result of the rating, DB has had to run decisions about hiring and firing senior U.S. managers with Fed overseers.
UberEats Is 'Exploding.... in a Good Way'
Uber's food delivery service UberEats has a $6 billion bookings run rate and is growing over 200%, Uber CEO Dara Khosrowshahi said at Recode's Code Conference.
"Eats is an exploding business in a good way. It's now at a $6 billion bookings run rate, growing over 200 percent," Khosrowshahi said.
That run rate would make UberEats one of the largest food delivery services in the world. Comparatively, GrubHub (GRUB) , which has been around longer than UberEats, had $3.8 billion in gross food sales last year.
Premarket
U.S. futures were mixed ahead of Thursday's opening bell as markets look to build momentum off of a strong day of trading that erased the losses from Tuesday's session.
Dow futures were falling 0.06%, indicating an open 14 points lower, while S&P futures declined 0.03%, indicating an open 1 point lower, and Nasdaq futures were up 0.03%, indicating an open 2 points higher.
Asian markets had a strong session led by the Shanghai Composite which gained 1.78%, while the Hang Seng rose 1.37% and the Nikkei gained 0.83%.
In Europe, the DAX was the lone major index in the red, falling 0.45%, while the CAC 40 gained 0.14% and the FTSE 100 rose 0.31% with about four hours left in trading.
