Musk's photo finish

MARKETS

• U.S. markets: Well, the first half of the year for the markets is over. And? The S&P finished up 1.7%, the Dow dropped 1.8%, the Nasdaq jumped 8.8%, and the Russell 2000 increased 7.1%. With the tax cuts, things could've been better, but with the trade war...things definitely could've been worse.
• Inflation: The core inflation rate finally hit a bullseye for the Fed: 2%—the first time in six years.

INTERNATIONAL

Meet Mexico’s New President

Let's take a trip south of the border, shall we? After all, we hear there might be a big celebration in Mexico—for the first time since 2000, a left-wing candidate from a non-traditional party won the country's presidential election.

His name? Andres Manuel Lopez Obrador. Or as he's better known, AMLO.

AMLO's not your average Mexican politician. He rose to popularity through his nationalist agenda, inflammatory rhetoric, and less-than-friendly approach to trade and foreign investment.

And while those might not seem like popular positions...

That type of populist mentality is what most Mexicans feel the country needs right now.

• 44% of Mexico's population live below the poverty line.
• Corruption and greed have become all-too-common among elected officials.
• While the focus has been on free trade and investment, crime has skyrocketed: 1) Crime is at a 20-year high and 2) 120 local politicians have been killed since elections started in September. Don't mess with the cartel...

So basically, a little more attention on the people could go a long way. And that's exactly what AMLO has in mind.

But not everyone's saying, "Te amo AMLO."

Particularly, U.S. businesses. With an AMLO victory, he'll take a seat at the table in the NAFTA renegotiations. And if you thought President Trump takes a hard-nosed stance in trade negotiations, here's how one analyst described AMLO:

• His strategy "will be to try to use NAFTA as a way to gain credibility with his base by ‘not letting the gringos get the best of us.'"

And for businesses, stalemates lead to uncertainty over manufacturing, hiring, prices, demand, you name it.

Then again, we might be jumping to conclusions. One of President Trump's priorities in NAFTA is to raise wages for Mexican manufacturers. That way, the U.S. doesn't always need to outsource production.

That's a win for AMLO, who promised higher wages throughout the campaign. We'll have to wait and see how it all plays out.

AUTO

Honk if You’re Worried About Auto Tariffs

After President Trump floated the idea of slapping tariffs on car imports, a few automakers took the policy for a test drive. And let's just say, they weren't impressed by its performance.

On Friday, GM said that auto tariffs would lead to "a smaller GM" in the U.S.

• How's that? Well, GM uses foreign auto parts to build cars here in the U.S.
• The flow chart: Higher import costs from tariffs → higher sale prices → lower demand for GM vehicles → lower employment needs → "smaller GM."

The administration wasn't moved by the sob story. Trade advisor Peter Navarro called GM's statement "smoke and mirrors" (aka misleading the public by exaggerating the impact of the tariffs).

Still, GM isn't alone in sounding the alarm. Toyota said tariffs would raise the cost of building a Camry by $1,800, and BMW also warned it might reduce U.S. investment under the proposed policy.

AUTO

Three Cheers for Tesla After It Hits Major Milestone

Nothing quite like a photo finish. Just ask Tesla, which finally hit its 5,000-car weekly production target just a few hours after its June 30 deadline. And if you haven't been keeping track, that's big...no, huge news.

First and foremost, it was enough to send a thunderous cheer through Tesla's Fremont factory (followed by an enormous sigh of relief). And second, it marks a milestone Musk has been promising since the day he first said the words "Model 3."

But is it enough to keep investors happy?

One Barclays analyst says not quite: These "burst builds"—periods of high intensity production—are unsustainable in the long-run (at least right now).

• Not to mention, Tesla still has a cash problem. To creditors, it's the friend who keeps saying, "Yea, yea, I'll get you back. This is the last time I borrow."

Bottom line: The Model 3, Tesla's first mass-market car, is the company's roadmap to success. But up until now, it's hit far too many speed bumps.

TRAVEL

July 4th Travel: By the Numbers

Traveling this week for the holiday? Way to be original. According to AAA, a record 46.9 million people will be hauling 50 miles or more—up more than 5% since last year.

More numbers you need to know:

$171: The average cost of a round-trip flight (along the top 40 domestic routes). If that sounds cheap...it is. It's the lowest July 4th-week airfare in five years.

2x: If you plan on hitting the road in D.C., NYC, or Los Angeles Tuesday afternoon, expect your travel time to at least double.

11%: The increase in mid-tier hotel prices from last year.

362,000: The number of stranded motorists AAA expects to help. Issues include dead batteries, flat tires, and lockouts.

#1: The top domestic destination? Orlando, FL. And the top spot goes to Rome for international travel.

CALENDAR

The Holiday Week Ahead

Should be a fun one.

Monday (July 2): The first legal pot store in Massachusetts could be granted a license; Today is known as the most bullish trading day of the year

Tuesday (July 3): NYSE closes early for the holiday

Wednesday (July 4): U.S. Independence Day

Thursday (July 5): Anyone got Advil?

Friday (July 6): U.S. and Chinese tariffs go into effect; June jobs numbers

WHAT ELSE IS BREWING

• The LA Lakers signed LeBron James to a 4-year, $153 million deal.
• Canada officially put tariffs on $12.6 billion worth of American goods.
• The White House tried to clear up some confusion over the weekend, saying the Saudi king promised to increase oil output only if needed (President Trump tweeted that an agreement to boost output had been reached).
• Novartis is spinning off its Alcon eye care business, which could be worth as much as $23 billion.
• Nike surged on better-than-expected earnings on Friday. After three down quarters, it returned to sales growth in North America.
• E-scooter startup Spin is raising $125 million through a unique security token offering (STO).

BREAKROOM

APPS WE'RE DOWNLOADING
Splitwise—Going on an expensive Euro trip with friends? Determining monthly rent/utilities? Splitwise can help you split your expenses by keeping track of payments between friends.

Bottom line: Ditch the anxiety around "I got you next time" and simplify your future IOUs.

TRAVEL TIP
If you're worried about getting stuck in July 4th traffic...Google's got a solution. Using historical Google Maps data, it created a web portal to give you insight into when the best/worst times to travel are this Independence Day. Google really thinks of everything.

TRIVIA
Which country's No. 1 export is soybeans?

U.S.—Brazil—Mexico—China—Russia

(Answer at bottom of newsletter)

Breakroom Answers