Tesla Eyes Internal CEO Candidates If Musk Leaves Over Pay Vote

Stocks

Summary:

While Musk has been inextricably linked to Tesla for more than a decade, the prospect of his departure has come into focus ahead of the pivotal shareholder vote next week.

Tesla Inc. is prepared to name a new chief executive officer from inside the company if shareholders reject Elon Musk’s proposed $1 trillion pay package and he steps down, according to the chair of the EV maker’s board.

To ensure an “orderly transition, the most likely would be internal,” Robyn Denholm said Tuesday in an interview, without ruling out the possibility of external candidates.

While Musk has been inextricably linked to Tesla for more than a decade, the prospect of his departure has come into focus ahead of the pivotal shareholder vote next week.

The compensation agreement could give Musk a 25% stake if he significantly expands Tesla’s market value and hits growth milestones in its car, robotics and robotaxi businesses. If he doesn’t get his preferred pay package and greater voting control, he’s threatened to quit or shift his attention to xAI, SpaceX and his other business ventures.

“I’ve had the conversations with him directly,” Denholm said at Bloomberg’s office in New York. “There’s no question in my mind that if we don’t get this across, there is a high probability” he would back away from the company or become less engaged.

The comments came in a broader blitz of media interviews and investor meetings to gain support for the unprecedented pay package, which will be voted on at the company’s annual meeting on Nov. 6.

While there’s little indication that the vote will fall short, Denholm said investors often wait until the last minute and the company can’t take anything for granted. With retail shareholders making up about 30% of the investor base, the typically press-shy company felt the need to run a get-out-the-vote campaign.

She and other board members, including James Murdoch and former Chipotle CFO Jack Hartung, have also been meeting with many of Tesla’s largest institutional shareholders, which include Vanguard Group, Blackrock Inc. and State Street Corp. Many investors follow recommendations from proxy advisers like ISS and Glass Lewis, which both advised investors to vote against the package in separate reports.

“There is no guarantee,” she said. “There is a large contingent of passive investors who actually follow their guidance, so we have to counter that with them directly.”

To further drum up support, the company on Monday plopped its Optimus humanoid robot outside the Nasdaq stock exchange in New York, where it passed out company-branded gummy candies to a line of fans and curious onlookers. The machine gave an occasional wave or thumbs-up to passers-by, some of whom took videos or snapped selfies with it.

Tesla shares climbed 2.9% at 12:56 p.m. in New York. The stock rose 12% this year through Monday, trailing the 17% gain in the S&P 500 Index. The performance marked a significant turnaround from earlier in 2025, when concerns over Tesla’s aging vehicle lineup and a consumer backlash to Musk’s political activity sent the stock tumbling.

The episode underscored the importance of Musk’s active engagement with Tesla, something the new compensation package is designed to incentivize. The agreement would help ensure that development around artificial intelligence and other new products happens within the company rather than with one of his multiple other ventures.

If the effort fails, the company said it’s ready with a “Plan B.” Denholm said the company has a deep bench of executives, which include global production chief and China head Tom Zhu, among others. Zhu, for instance, has worked in multiple capacities across the company, an intentional move to develop people internally, Denholm said.

She said there is a “whole range of different alternatives out there,” including having more than one person run the company.

Another matter up for a nonbinding shareholder vote is an investment in xAI, Musk’s artificial intelligence company.

“We haven’t invested in it” because xAI is developing a completely different kind of technology than the real-world applications Tesla is building with AI, Denholm said. Still, if shareholders vote to invest in the startup, that would spur a “process” to evaluate the related-party transaction.

Source: Bloomberg

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Justin

Economic

The US is prepared to roll back some tariffs on China if Beijing cracks down on the export of chemicals that produce fentanyl, under a trade framework that President Trump and Chinese leader Xi Jinping are set to discuss Thursday, the WSJ reported citing people familiar.

According to the report, China is expected to commit to more controls on the export of precursor chemicals used to make fentanyl. In return, the U.S. could cut its 20% fentanyl-related tariff on Chinese goods by as much as 10%, the people said.

If Trump lowers the fentanyl-tariff on Chinese goods to 10%, it would bring the average tariff on most Chinese imports, currently around 55%, to about 45%. That would put China's average tariff rate closer to those of other trading partners, potentially reducing the price competitiveness of goods manufactured outside of China. Indicatively, goods from India and Brazil face 50% tariffs, and the Trump administration has said Chinese goods transshipped through Southeast Asian nations would face 40% tariffs, much higher than the 19%-20% rate for other goods from the region.

Bringing the total tariffs on China closer to the 40% levies threatened on Southeast Asian nations would reduce the incentive for Chinese firms to transship goods through those economies to the U.S., while potentially motivating more direct trade between China and the U.S.

The administration reached two trade agreements and two frameworks with Southeast Asian nations this week that included provisions to prevent China from exporting goods through their economies at below-market prices.

The U.S. and China are also expected to reduce port fees on each other's ships, the report goes on.

Separately, China is also expected to commit to significant purchases of American soybeans, Bessent said in a CBS News interview on Sunday, potentially bringing relief to U.Sp. farmers hit hard by the loss of Chinese buyers this year.

If Beijing agrees, the framework would ease market-rattling tensions between the world's two biggest economies. Earlier this month, China tightened controls on rare earths, a sector it dominates, potentially jolting global supply chains that rely on them to manufacture everything from electric vehicles to jet fighters. In turn Trump threatened another 100% tariffs on China. Now, under the new framework, the U.S. expects China to delay the new rare-earths rules.

"I believe that they are going to delay that for a year while they re-examine it," Bessent said in an interview with ABC News on Sunday.

The expected deferral of China's latest rare-earth controls means Trump's threat to impose a 100% tariff on all Chinese goods by Nov. 1 is now "effectively off the table," Bessent told CBS News.

There's more: Chinese negotiators are also expecting the U.S. to freeze potential new policy actions deemed as harmful to China, such as controls on exports of products made with U.S. software. Bessent told CBS News on Sunday there have been no changes to U.S. export controls.

It is unclear how the framework would affect a different set of rare-earths restrictions that Beijing announced in April. The established licensing system suggests authorities could ramp up rare-earth restrictions again if the U.S. were to impose new trade policies deemed harmful to China.

Chinese Vice Commerce Minister Li Chenggang, a senior member of China's trade delegation, said the two sides have reached "preliminary consensus" on issues including export controls, reciprocal tariffs, fentanyl-related tariffs, cooperation on fentanyl, an expansion of bilateral trade and port fees. Both sides will then go through domestic approval processes, he said.

"The current turbulences and twists and turns are the ones that we do not wish to see," Li said.

Federal Bureau of Investigation Director Kash Patel is set to travel to Beijing to discuss the fentanyl issue with Chinese authorities, said people familiar with the matter.

The expected agreements are subject to change and dependent on the meeting of the two leaders. Details are expected to be hammered out in subsequent negotiations.

Source: Zero Hedge

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Adam

Stocks

The stock market rally has already defied expectations this year, shrugging off geopolitical strife, economic uncertainty and global trade tensions to reach fresh record highs. Some analysts say the rally might just be getting started.

The Dow closed above 47,000 points for the first time ever on Friday, buoyed by cooler-than-expected inflation data that supported hopes for interest rate cuts from the Federal Reserve.

The S&P 500 has rallied 36% in just over six months, boosted by strong corporate earnings and optimism about Fed rate cuts. Enthusiasm about artificial intelligence had stoked bubble concerns but also contributed to the market’s ascent.

“Absent some truly surprising and unwelcome events, the current momentum in the stock market is likely to last through the end of the year,” Emily Bowersock Hill, CEO at Bowersock Capital Partners, said in an email.

Corporate America continues to impress

Stocks are historically expensive and US-China trade tensions persist. While there’s no shortage of concerns, the outlook remains positive for stocks, analysts said.

The bottom line: Corporate profits continue to impress Wall Street, and the Fed is expected to lower interest rates, providing legs for a rally.

Companies are expected to deliver strong results this quarter, driven by “above trend growth” from AI companies, AI-related investments and a resilient consumer, analysts at JPMorgan Chase said in an October 21 note.

About 86% of companies in the S&P 500 that have already reported third-quarter earnings have posted results that beat expectations, according to FactSet.

The S&P 500 posted a historically strong September and is on track to notch its sixth month of gains in a row. But even that extraordinary growth doesn’t rule out further gains, investors said.

A fear of missing out on the rally, or FOMO, is also keeping stocks float, according to Sam Stovall, chief investment strategist at CFRA Research.

“With the Fed likely to cut rates two more times this year, and with AI collaborations continuing, I think right now, we are trading on FOMO fumes,” Stovall said.

“We’re running on adrenaline,” he said. “Valuations are still stretched, but at least in the near term, things are still looking good.”

Concerns

Of course, it’s not all upside.

It’s a “high risk bull market,” according to Bob Doll, CEO at Crossmark Global Investments.

The labor market has shown signs of weakening in recent months. While consumer spending has held up so far, Doll said he is still concerned about a slowdown in spending — and a knock to corporate profits — if softness in the job market continues.

Wall Street will also be fixated on whether big tech companies can continue to impress with earnings. The Magnificent Seven group of tech stocks have accounted for roughly 41% of the S&P 500’s gains this year, according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.

Meta (META), Microsoft (MSFT) and Alphabet (GOOG) are expected to report earnings after the closing bell on Wednesday. Apple (AAPL) and Amazon (AMZN) are expected to report earnings on Thursday. Nvidia (NVDA), the star of the AI show, reports earnings on November 19.

Tesla (TSLA) reported earnings on October 22, and its profits missed analysts’ estimates. Tesla shares are down about 1% since it reported earnings.

“While the bull case is potentially potent, we are not convinced that the rising tide will sufficiently lift all boats in terms of upside profit surprise,” Lisa Shalett, CIO at Morgan Stanley Wealth Management, said in a note.

Relentless resilience

The stock market has proved more resilient this year than many on Wall Street thought.

President Donald Trump’s tariff campaign has raised concerns about a slowdown in economic growth and resurgent inflation, but investors have tried to look past concerns and focus on corporate earnings.

Meanwhile, inflation data so far has been milder than expected. While the economy is showing signs of strain, like borrowers falling behind on car payments, the stock market has pushed higher.

“Next year will bring new challenges, but we wouldn’t advise getting in the way of the upward trend between now and year-end,” Chris Zaccarelli, CIO at Northlight Asset Management, said in an email.

Just this month, the Dow dropped 900 points on October 10 after President Donald Trump threatened new tariffs on China before recouping those losses and closing at a record high two weeks later.

Trump and Chinese leader Xi Jinping are expected to meet this week at the Asia-Pacific Economic Cooperation summit in South Korea. Tensions have flared since Beijing on October 9 announced new export controls on rare earths and Trump the next day threatened new 100% tariffs, set to take effect November 1.

If there were to be a further escalation in US-China trade tensions, it could be another opportunity to buy the dip, according to Keith Lerner, chief market strategist at Truist.

“If something actually all of a sudden becomes more tense, and both sides dig in, and that’s kind of a short-term risk,” Lerner said, “We would be leaning into that risk if it were to happen.”

Source: cnn

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Adam

Forex

The US dollar is a little weaker across the board in quiet trading conditions. The Japanese yen is outperforming on some very mild verbal intervention from Japanese authorities - but hardly enough to drive a sustainable trend. In a market deprived of US data by the government shutdown, there may be more focus than usual on reports that Amazon (NASDAQ:AMZN) plans to cut 30,000 jobs

USD: Focus on Layoffs and Consumer Confidence

The dollar is a little weaker across the board at the start of the week. We mentioned yesterday how the low fixings in USD/CNY were a positive for EM currencies and a mild dollar negative, and once again, USD/CNY has been fixed lower in Asia last night. Optimism remains intact that Presidents Trump and Xi can agree on a meaningful trade truce this Thursday, where we remain very much focused on what happens to China’s threats of stringent controls on rare earth exports.

Leading the dollar lower overnight has been USD/JPY. Being blamed for the move are various comments from Japanese Finance Ministry officials that they are watching the yen closely - interpreted as some kind of low-level verbal intervention. But we have been here many times before, and such comments look unlikely to deliver a lasting reversal in USD/JPY. More interest will be had in Thursday’s Bank of Japan meeting, where no change is expected, but the market still attaches a 38% probability to a 25bp hike in December. Words to the effect that the BoJ still stands to normalise policy could prove a mild yen positive on Thursday.

But for the dollar itself, we’ve been bereft of data and are having to rely on anecdote. Today, the financial press is reporting that Amazon may be set to announce 30,000 job cuts. We haven’t had official job data for a while now, but surveys have suggested that consumers are increasingly worried about their job prospects. And later today, we’ll get the October release of the Conference Board’s Consumer Confidence survey. A weak number here could weigh on the dollar. Today also sees the release of the S&P Case-Shiller house price index for August, where house prices have fallen five months in a row. This will have relevance for both consumption and inflation, where lower imputed rents should provide more comfort to the Fed on inflation.

We’re not looking for big swings in the dollar, but a softish set of US data today could mean that DXY makes a run at 98.00 later in the day.

EUR: Will French Corporate Tax Hiked Be Welcomed?

EUR/USD has nudged through resistance at 1.1650 in quiet markets. The softer dollar has been the driver, although we wonder whether some compromise on the French budget is helping too. Here the National Assembly yesterday adopted an amendment which could see an extra EUR2bn raised from corporate taxes next year. That seems a drop in the ocean for the French budget - and not particularly positive for French growth - but investors may be more interested in compromise and a path toward a 2026 budget. The link between this and a milder, stronger EUR/USD is probably tenuous at best.

For the eurozone today, we have some releases from the ECB. Three-year consumer inflation expectations are expected to remain at 2.5% YoY. And we’ll also see the latest ECB bank lending survey. With long-dated EUR swap rates having risen 30-40bps this year - plus ongoing uncertainty - lending looks unlikely to surprise on the upside.

As above, let’s see if the second/third-tier US data proves a market mover today. If so, EUR/USD could edge up towards 1.1700.

GBP: Food Price Inflation Softens

During a quiet period for UK data, focus today could fall on a report from the British Retail Consortium that food inflation has fallen to 3.7% year-on-year in October from 4.2%. Sticky food inflation had been one of the factors preoccupying the Bank of England and delaying rate cuts. The news might increase interest in positioning for a BoE rate cut at the December meeting. A 25bp cut is currently priced with a 35% probability. The meeting follows the budget in late November, also seen as a sterling negative.

Expect the news to keep EUR/GBP bid and not far from important resistance at 0.8750/60. And given that sterling is quite an expensive sell with one-week rates above 4.00%, interest may emerge to explore the downside in GBP/NOK and GBP/AUD, because of both the high yields available in Norway and Australia and the supportive environment for commodity prices.

Source: investing

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Devin

Economic

U.S. President Donald Trump reignited his feud with Federal Reserve Chair Jerome Powell, calling him "incompetent" and hinting that Powell's tenure could end "in a few months" following a dinner with business leaders in Japan on Oct. 28, 2025.

Trump Takes Aim at Powell — Again

Speaking to reporters aboard Air Force One after the dinner, Trump accused Powell of being "bad" for the economy and "acting too late" on interest rate adjustments, several media reports noted, including the Washington Times.

The president's remarks mark yet another jab at the central bank chief he appointed in 2018 — a relationship that's been frosty ever since Trump's first term. Powell, whose current term as Fed chair ends in May 2026, was renominated by President Biden in 2022 and could technically remain on the Fed's Board of Governors until 2028.

That said, Trump's "few months" remark suggests he intends to move faster, with sources close to the administration hinting he could announce a replacement by the end of 2025. Fed Chair contenders include former Fed Governor Kevin Warsh, ex-White House economist Kevin Hassett, supply-sider Arthur Laffer, and Judy Shelton, a gold-standard advocate whose past nomination stalled in the Senate.

Trump has signaled that the next chair must align with his pro-growth, low-rate agenda. Markets reacted swiftly to Trump's latest salvo. Bond yields slipped a hair, while rate-sensitive sectors such as tech and real estate saw modest upticks. Traders bet a Trump-friendly Fed could accelerate rate cuts — a move some investors believe is giga bullish for risk assets across U.S. stocks and crypto.

Critics warn that a politically driven Fed could compromise monetary independence, prioritizing short-term economic gains over inflation control. Although academic studies suggest there has never been any so-called independence. Supporters, however, argue that a shake-up is overdue and would better sync monetary and fiscal policy to fuel growth.

The ongoing spat comes amid a predicted Fed rate-cutting cycle, with Powell recently signaling the end of quantitative tightening. Trump's comments, though typical of his unfiltered style, have once again left global markets watching for his next move — and Powell's possible final act.

FAQ

What did President Trump say about Jerome Powell?Trump said Powell would be out of his role "in a few months," calling him "incompetent" and "bad" for the economy. It's not Trump's first time making such comments.
When does Powell's current term end?Powell's term as Fed chair runs through May 2026, though he could stay on the Board of Governors until 2028.
Who could replace Powell at the Federal Reserve?Reported contenders include Treasury Secretary Scott Bessent, Kevin Warsh, Kevin Hassett, Arthur Laffer, and Judy Shelton.
How did markets react to Trump's comments?Bond yields dipped and tech and real estate stocks rose modestly, as investors priced in the possibility of faster rate cuts.

Source: CoinGecko

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Adam

Economic

After riding a wave of market gains for most of the first two years of Argentine President Javier Milei's government, investors expect him to turn his party's redrawing of the electoral map into sweeping labor and tax reforms that could unlock billions of dollars in foreign investment.

The decisive midterm victory for Milei's party on Sunday has raised the prospect of structural change on a scale Argentina has not seen in decades. After acknowledging the need to build bridges within the legislature, Milei said in his victory speech that the newly elected group of legislators would be "the most reformist Congress in Argentine history."

The combination of Milei's strengthened mandate and explicit U.S. support - to the tune of up to $40 billion - will lure investors to consider longer-term exposure to Argentine assets despite the country's track record of policy whiplash, analysts said.

"The momentum is 100% with him, and he is in a stronger position than he's ever been to push reforms in Congress," said Gustavo Medeiros, head of research at Ashmore Group.

"The big problem is, every two years you have this gun on your head that people are worried about - the major change in the political dynamics (and) a major change in economic policies," Medeiros said. Milei's decisive victory - if followed by an aggressive push to complete the economic overhaul he has started - could permanently break the cycle, he said.

For years, foreign direct investment in Argentina has been held back by an unpredictable policy landscape and quick boom-and-bust cycles, usually linked to elections or the agricultural commodities cycle.

But the midterm win has given Milei's government the kind of political leverage Argentina has rarely seen, with investors not asking whether reforms will happen, but how far and how fast they will go.

A simpler tax system, more flexible labor laws and lower pension costs could lower longstanding barriers to Argentina's competitiveness. For companies weighing capital commitments in mining, energy or technology, the ability to plan years ahead would mark a decisive break from the past.

Recently, artificial intelligence company OpenAI vowed an investment of up to $25 billion for a data center project and Chevron Corp (CVX.N) recommitted to its investment in the Vaca Muerta shale formation. The U.S. International Development Finance Corporation said last week it was discussing with the government strategic investment across a range of industries, including critical minerals and infrastructure.

"Mining projects for copper and lithium and rare earths, those take a decade to come to fruition," said Graham Stock, senior sovereign strategist at RBC Global Asset Management in an interview. "You need more than a two-year horizon to make that commitment. And now there's a reasonable chance that we have that."

Shamaila Khan, head of fixed income for emerging markets and Asia Pacific at UBS, also said Argentina could emerge as more of a "destination for long-term investments" if Milei can build the needed legislative coalitions to pass reforms.

THE PESO QUESTION

One of the biggest risk factors hanging over Argentine financial markets remains the currency, which many economists view as overvalued. With the backdrop of a $20 billion U.S. swap line and years-long similar support from China, the currency has nonetheless remained under pressure.

An initial post-election rally strengthened the interbank exchange past 14% to 1,300 per dollar, but it ended the Monday session at 1,430, 4% stronger on the day, after having closed last week at 1,491.5.

Many investors see room for a more flexible exchange rate, or even for the current band to stay in place supported by fresh inflows. Others would prefer a weaker currency, especially to support exporters.

"The key risk is that the Milei administration sticks to the current exchange rate regime," said emerging markets economist Kimberley Sperrfechter at Capital Economics in a note. "That would leave the peso severely misaligned, lead to a further deterioration in the current account position and complicate the central bank’s efforts to accumulate FX reserves."

Gross FX reserves stand around $40 billion while net reserves, accounting for certain foreign currency liabilities, are in the red.

Milei's victory, while impressive, won't be a gamechanger unless he can generate the kind of lasting stability needed to allow for Argentina's vast resources - agricultural, energy and mineral - to entice a constant flow of foreign investment, analysts said.

"Argentina has massive potential, but to attract foreign direct investment, the type of investment that's making decisions on a very long-term horizon, that level of confidence can only be built with time," said Gorky Urquieta, senior portfolio manager and global co-head of emerging markets debt at Neuberger Berman in an email to Reuters.

"It's a very optimistic starting point, but there’s still a lot of ground to cover."

Source: reuters

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Adam

Economic

The top 10 stocks in the S&P 500, led by the AI giants, have surged back to dot-com era levels of dominance, according to new data from Lori Calvasina, head of US equity strategy research at RBC.

Her chart shows the group’s equal-weighted performance versus the rest of the S&P is approaching the highs of the early 2000s — a reminder of just how dependent this rally remains on a handful of names.

It’s the superpower of the Magnificent Seven. It’s also the market’s Achilles' heel.

Big Tech has become the market’s superpower — and its Achilles' heel_1

Calvasina points out that while 83% of S&P companies are beating on earnings so far this quarter, the pace of upward revisions is slipping, even among the megacaps that carried 2025’s rally.

“It will be difficult to replicate the same kind of surge in earnings optimism that helped power markets higher,” she wrote, warning that further deterioration could be “a contributing factor to a garden-variety pullback.”

It’s a warning Wall Street watchers have hinted at before. The market’s leadership has grown so top-heavy that even a stumble from one or two names could threaten the rally’s balance — a small crack in the armor that risks exposing the weakness beneath.

That vulnerability comes into sharper focus this week as the first members of the Magnificent Seven cohort prepare to report.

Hyperscalers and tech juggernauts, including Microsoft (MSFT), Alphabet (GOOG, GOOGL), Meta (META), Amazon (AMZN), and Apple (AAPL), will take the stage.

It’s a lineup that will test whether Big Tech’s fundamentals can keep pace with the hype amid renewed talk of an AI bubble.

Some strategists say it’s not that simple.

Citi strategist Drew Pettit doesn’t see an outright bubble, at least for now. In a recent note, he wrote that AI valuations “do not look like a bubble yet,” though he warned that pockets of excess are emerging in certain corners of the market. A theme we've been talking about in this newsletter lately.

Pettit told his clients that the best approach now is to stay invested but to diversify across the AI value chain and look for growth at a justifiable valuation. It’s a subtle acknowledgment that while Big Tech’s fundamentals remain strong, leadership has grown narrow and the rally’s footing is starting to look uneven.

Professional money is already adjusting. An analysis from Reuters found big investors rotating within the AI trade, recycling profits from Nvidia and Microsoft into next-in-line plays like robotics, software, and Asian tech.

Reuters described it as a trade “spooked by AI exuberance yet wary of betting against it.”

And that’s exactly the tension: Big Tech remains the market’s center of gravity, its greatest strength and its most fragile point.

As earnings season hits full stride, the same giants that built this rally could determine whether it holds or whether the market’s Achilles' heel finally gives way.