Deep Dive
Shownotes Transcript
Welcome to Seeking Alpha's Wall Street Lunch, our afternoon update on today's market action, news, and analysis. Good afternoon. Today is Thursday, June 5th, and I'm your host, Kim Kahn. Our top story so far. Is Tesla losing the effect of a Trump putt?
The relationship between Elon Musk and President Donald Trump appears to have entered a new phase of pronounced tension and public disagreement. The rift centers on Trump's tax and spending legislation, dubbed the One Big Beautiful Bill, and a series of policy and personnel decisions that have appeared to have frustrated Musk,
who is very focused on the negative impact on the U.S. deficit of the bill. This week, Musk unleashed a series of sharp posts on X, calling Trump's hallmark legislation a disgusting abomination and accusing it of being filled with massive, outrageous, pork-filled spending. Musk argued that the bill would massively increase the already gigantic budget deficit and could bankrupt America due to the level of spending in comparison to tax receipts. He even urged his followers to pressure Congress to kill the bill.
House Speaker Mike Johnson plans to speak with Elon Musk on Thursday as they clash over the bill. That follows reports that Musk did not pick up a call from Johnson on Wednesday. Digging into the TIF, the bill's proposed cuts to the electric vehicle tax credit may have caught Musk by surprise, according to Wall Street analysts. The latest reports also indicate that Elon Musk has frozen Trump's last $100 million commitment to the Trump re-election campaign after the bromance hit its rough patch.
Looking ahead, the public disagreement could be resolved in a flash, or Trump could use his considerable influence to make things a little trickier for Tesla and SpaceX as they look for an easy path with government regulators. Shares of Tesla were down 6% early Thursday after shedding 3.6% on Wednesday. The stock is down 35% from its post-election high of $4.8854.
On the economic front, the U.S. trade deficit narrowed sharply in April to $61.6 billion, compared with $118.1 billion expected and $138.3 billion in March as imports plunged. Imports were $351 billion, down $68.4 billion from March. Exports were $289.4 billion, down $8.3 billion. Wells Fargo economists say the temporary first quarter splurge by businesses pulling forward demand to get ahead of tariffs has run its course.
The April data tell us that the show was over in Q1. Sentiment around imports has certainly shifted. The import components of the ISM surveys point to further weakness, as do other components from purchasing managers who feel that inventories are high, backlog is low, and new demand is drying up. This suggests depressed activity and import demand ahead.
Among active stocks, shares of MongoDB are jumping after the first quarter fiscal 2026 results beat estimates and analysts maintained their bullish views on the stock. Morgan Stanley analyst Sanjit Singh said cloud database Atlas revenue accelerating 26% year-over-year compared to 24% year-over-year in the fourth quarter paired with record customer additions proves strong execution to start the year, which contrasts with mixed investor sentiment and an undemanding valuation.
PVH is under pressure after the apparel company set its full-year profit guidance below expectations. The updated outlook reflects an estimated net negative impact related to the tariffs currently in place for goods coming into the U.S. The new outlook is for EPS to be in the range of $10.75 to $11 on an on-gap basis compared to a range of $12.40 to $12.75 previously.
And ZJK Industrial surged after the company announced that it's ramping up production to meet rising demand from NVIDIA's B40 project. NVIDIA is advancing the development of a customized AI accelerator, the B40 chip, specifically for the Chinese market.
In other news of note, bankrupt DNA testing company 23andMe Holding is set to hold a second auction to sell its assets, including customers' genetic data, after a group led by former CEO Ann Wachitzki submitted a $305 million bid, beating an initial $256 billion offer from Regeneron. Following its Chapter 11 filing in a Missouri bankruptcy court in March, 23andMe picked Regeneron as the successful bidder in the first auction held last month.
Wachitsky cited irregularities in the initial auction, arguing that it was unfairly close to favor Regeneron. But a subsequent bid from TTAM Research Institute, a California nonprofit founded by Wachitsky, has prompted the company to seek permission from U.S. bankruptcy judge Brian Walsh in St. Louis, Missouri, to seek fresh offers from potential buyers.
And in the Wall Street Research Corner, exchange-traded fund flows reflected renewed investor optimism in May. After a sluggish April, ETF inflows surged to $86 billion last month, bringing the year-to-date total to $444 billion.
This keeps the industry well positioned for another potential trillion dollar year. For May, U.S. equity ETFs attracted $25 billion in new assets, although this represented a below-average share of geographic allocations as investors increasingly turned their attention abroad. Non-U.S. equity ETFs brought in $18 billion, bolstered by $9 billion in developed markets and $4 billion into single-country funds, which was the seventh-largest monthly haul on record for that category.
Bond ETFs experienced a significant influx on the month, pulling in $37 billion, their third largest monthly total ever. Credit-focused ETFs rebounded strongly, with $12 billion in inflows, while inflation-protected securities drew $2 billion, extending their streak to five consecutive months of net gains. That's all for today's Wall Street Lunch. Look for links for stories in the show notes section. Don't forget, these episodes will be up with transcriptions at seekingalpha.com slash WSB.
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