Europe Has Few Good Options to Replace Musk's Starlink
Welcome to Tech In Depth, our revamped daily newsletter with reporting and analysis about the business of tech from Bloomberg's journalists around the world. Today, Jillian Deutsch reports on the dilemma facing Europe over concerns that Elon Musk might pull back on the Starlink satellite communications service.
Slow Siri: Apple formally acknowledged that it has delayed its promised AI boost to Siri, the iPhone maker's digital assistant. The features were expected in May, but the postponement pushes Apple even further behind rivals in the race to offer AI tools.
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Miami Herald
an hour ago
- Miami Herald
Stocks sputter after surprising inflation, China trade news
The stock market needs a new catalyst. Until now, the S&P 500's rally since early April was built on the potential for sellers to be caught off guard by surprising trade deals. Since the benchmark index has rallied 21% after Trump paused reciprocal tariffs on April 9, fewer investors will likely be surprised by developments, and many may be disappointed with outcomes. The possibility that tariff deals may be baked into stock prices appeared when a softer-than-expected May inflation report, alongside what should've been positive China trade news, fell flat. The S&P 500 posted early gains on the news, but reversed to close lower by the end of trading. Related: CPI inflation report resets interest rate cut bets The culprit? While CPI showed inflation was relatively tame last month, most still believe tariffs will cause inflation to reassert itself later this year. Advancing China and the U.S. negotiations are encouraging, but President Trump's comments regarding China tariffs are disheartening. The "meh" reaction to the inflation and China trade news caught the attention of veteran hedge fund manager Doug Kass. Kass has been tracking the markets professionally since the 1970s, and he's the former research director for Leon Cooperman's Omega Advisors, one of the most famous hedge funds in history. After witnessing today's reaction to the news, Kass offered up a frank opinion that may frustrate some investors. Image source: Goodney/Bloomberg via Getty Images The Federal Reserve's mission is to balance inflation and unemployment. It does this by adjusting the Fed Funds Rate. When it increases rates, economic activity slows, crimping inflation but increasing unemployment. When it lowers rates, GDP expands, lowering unemployment but increasing inflation. The dual mandate means that the Fed is in a pickle this year. After the most hawkish monetary policy since the 1980s caused inflation to drop below 3% from over 8% in 2022, the Fed switched gears, cutting rates in September, November, and December to lower unemployment, which has risen to 4.2% from 3.4% in 2023. Related: Billionaire fund manager sends strong message on Fed Chair Powell's future Hopes were for more cuts in 2025, but Fed Chair Powell was forced to pause additional reductions amid sticky inflation and the threat of tariffs driving prices higher. As a result, many Wall Street economists have gone from expecting many cuts this year to none. The CPI report showed that inflation in May only inched up 0.1% month over month, less than the 0.2% predicted. However, headline CPI showed inflation of 2.4% year over year last month, up from 2.3% in April. Meanwhile, core CPI, excluding volatile energy and food prices, was up 2.8% in May, matching April. That's undoubtedly not barn-burning progress. Nevertheless, some latched onto the lower-than-expected increase as evidence that the tariff impact on inflation is overblown, helping stocks in early action. Also contributing to optimism was news out of London that a meeting between Chinese and U.S. officials, including Treasury Secretary Scott Bessent, had led to progress in uncorking supplies of rare earth minerals necessary for EVs and other next-gen technology. President Trump heralded the deal, saying, "OUR DEAL WITH CHINA IS DONE, SUBJECT TO FINAL APPROVAL WITH PRESIDENT XI AND ME. FULL MAGNETS, AND ANY NECESSARY RARE EARTHS, WILL BE SUPPLIED, UP FRONT, BY CHINA. LIKEWISE, WE WILL PROVIDE TO CHINA WHAT WAS AGREED TO, INCLUDING CHINESE STUDENTS USING OUR COLLEGES AND UNIVERSITIES." More Economic Analysis: Hedge-fund manager sees U.S. becoming GreeceA critical industry is slamming the economyReports may show whether the economy is toughing out the tariffs However, details were scant, and Trump threw some cold water onto hopes that a trade deal would ease tariffs on Chinese goods, which already currently stand near 55% all-in. "WE ARE GETTING A TOTAL OF 55% TARIFFS, CHINA IS GETTING 10%," he said on Truth Social. Doug Kass has seen more than his share of good and bad tapes. He's survived the 1970s inflation, 1980s skyrocketing interest rates, the S&L crisis, Internet boom and bust, the Great Recession, Covid, and 2022's bear market. Related: Fed official revamps interest-rate cut forecast for rest of this year His experience led to him correctly predicting this year's steep sell-off and his accurate bet that stocks would bounce in early April after the drop. He isn't convinced that the latest inflation progress is bullish for the S&P 500. "The market has likely already discounted a better than expected Core CPI," wrote Kass on TheStreet Pro. "Market participants may interpret this number as being less exciting for equities because companies/manufacturers are likely eating the higher costs/tariffs, leading to concerns about lower margins and profits over the balance of the year." Kass says that "swings in the trade balance" show importers stockpiled inventory ahead of Trump's April 2 "Liberation Day" tariff announcements. As a result, May data still reflects inventory brought in before tariffs hit. "When that inventory runs out, they will likely have to put through price hikes and inflation will heat up," said Kass. Kass is similarly unimpressed by the outcome of the China meeting. "The China/U.S. tariff meeting ended up being a complete non-event (with no evidence of lowering tariffs)," wrote Kass. Absent tariff relief, companies absorbing at least some additional costs will see earnings come under pressure. And since earnings growth is a cornerstone of stock prices and tariffs don't seem destined to retreat further anytime soon, there may be little impetus to support a rip-roaring rally. Related: Veteran fund manager revamps stock market forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Miami Herald
an hour ago
- Miami Herald
First look: Tesla's biggest bet in years makes street debut
It has been a long time coming, but the moment is finally here. Tesla (TSLA) has officially rolled out its robotaxi program in Austin, Texas, after years of promises and missed deadlines. Tesla has teased its robotaxi program since CEO Elon Musk first mentioned it in 2016, but its development has moved at a snail's pace. Related: Tesla takes drastic measures to keep robotaxi plans secret Apple co-founder Steve Wozniak was a self-described early believer in Tesla, but in recent years, he has made it his mission to warn the world about its Full Self-Driving technology. "Boy, if you want to study AI gone wrong, and making a lot of claims, and trying to kill you every chance it can, get a Tesla," Wozniak told CNN in a 2023 interview. Wozniak was a former Tesla booster, dating back to 2016, when he said he had spent a lot of money upgrading his vehicle. The upgrade included a camera and radar in the vehicle, and Musk promised that the car would be able to drive itself across the country by the end of 2016. Musk then said, according to Woz, that a new vehicle upgrade with eight cameras and even more sensors would allow the car to drive itself cross-country by the end of 2017. Eight years later, Tesla still can't drive itself cross-country, but the company is showcasing its progress on the streets of Austin. Self-driving Teslas with no one in the driver's seat were spotted in Austin this week. The video circulating online does, however, seem to show a human inside. The car in the video, with the word "Robotaxi" written on the door, successfully yields to pedestrians legally crossing in the crosswalk. According to Musk, Tesla plans to test only about 10 vehicles during this initial pilot run. Still, the ultimate plan is to have every Tesla on the road capable of serving as a robotaxi. Related: Tesla faces new challenge as leader announces exit Earlier this year, Tesla said its FSD system has driven a cumulative total of 3.6 billion miles, nearly triple the 1.3 billion cumulative miles it reported a year ago. The company has fought to keep its robotaxi plans in Austin top secret. News organizations have requested Freedom of Information Act access to communications from the last two years between the company and city officials in February, after Musk announced in January that robotaxis were coming to Austin. The city's public information officer told the news agency that "third parties" asked the city to withhold those records to protect their "privacy or property interests." While Tesla recently killed its Cybercab concept, at least for now, the company plans to test Model Ys already on the road as part of its robotaxi program. "It's prudent for us to start with a small number, confirm that things are going well, and then scale it up," Musk told CNBC's David Faber. Once it proves its concept in Austin, Tesla plans to expand the robotaxi program to Los Angeles and San Francisco soon after. California was Tesla's old stomping grounds before Musk moved the company's HQ to Austin in 2021 due to what he said were arduous regulatory practices, which may have been related to the company's operation during the Covid pandemic. With Tesla's plan to expand in the state, Musk will be heading back into that regulatory environment, except now the rules governing autonomous driving are much stricter. In April, the California Department of Motor Vehicles announced that it is seeking public comment on proposed regulations for self-driving vehicles. Related: Tesla's robotaxi rollout is alarming the public, new report shows The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Miami Herald
an hour ago
- Miami Herald
Google delivers a harsh message to loyal employees
When it comes to the jobs everyone wants in the tech field, Google (GOOGL) ranks high on most people's wish lists. When it was first founded in 1998 by Larry Page and Sergey Brin, Google was one of several search engines on the market, alongside Yahoo, Netscape, AltaVista, and many more. Don't miss the move: Subscribe to TheStreet's free daily newsletter But with time, Google pulled ahead of the pack, and by the time it bought YouTube in 1996, it was well on its way to becoming the tech behemoth it is today. While it seems like a solid bet to work for such a wildly successful company, in the last few years, working for Google has been anything but. Related: Google resolves major privacy issue In 2023, Google revealed plans to lay off 12,000 employees in a massive cut, one that CEO Sundar Pichai called "a difficult decision to set us up for the future." "Over the past two years we've seen periods of dramatic growth. To match and fuel that growth, we hired for a different economic reality than the one we face today," Pichai explained in the letter that accompanied the layoff. Two more rounds came in 2024, and now, Google has announced it's time for another. Image source: Crabb/Digital First Media/East Bay Times via Getty Images On June 10, Google offered buyout deals to employees across many of its teams, including Communications, Marketing, Research, Core, and Knowledge & Information. The latter works on Search, Business Insider reported. More Tech Stocks: Palantir gets great news from the PentagonAnalyst has blunt words on Trump's iPhone tariff plansOpenAI teams up with legendary Apple exec Senior Vice President of Core Systems Jen Fitzpatrick sent an internal memo on the deals, saying, "We're offering a Voluntary Exit Program (VEP) for Core Googlers in the U.S. (in my reporting org)." "We've seen positive feedback across the company in other orgs who have offered similar programs, and I wanted to extend the same option to eligible Core Googlers in the U.S. who would like to leave the company voluntarily with severance." Related: Google sends a harsh message to employees after layoffs The memo goes on to say that the exit program may be a fit for Core Googlers "who aren't feeling excited about and aligned with Core's mission and goals, or those who are having difficulty meeting the demands of their role." The memo also addressed the company's remote work policy, saying all Core Googlers in the U.S. within 50 miles of an office must return to a 3/2 hybrid schedule. When it comes to Google's true reasons for this round of voluntary layoffs, it may have something to do with the fact that internet searchers are flocking en masse to ChatGPT to answer their questions instead of using Google Search. ChatGPT has 400 million active users as of May, with OpenAI Sam Altman sharing via X last month that "ChatGPT daily active users have increased >4x over the last year." Per a recent Vox Media survey, 61% of Gen Z and 53% of Millennials opt to use AI tools to answer questions, rather than employing Google or other search engines. There's more than just AI to blame. People have been having a harder time as of late finding what they want in Google when they do use it. According to a survey of 1,000 people done by digital marketing firm Scorpion, 54% said they look through more search results than they did five years ago. Take that frustration, and hand those same people an easy-to-read AI summary, and it's easy to see why people would opt for that over combing through search results that don't deliver what they want. Related: Google quietly launches genius new app The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
