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Hi Benamara, here's what you need to know for November 14th in 3:14 minutes.

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⏳ Keep it brief

  • Tesla announced plans to open a new factory in Germany
  • The prices of goods and services in October rose more slowly than predicted in the UK and US

Berlin Y’all!

Berlin Y’all!

What’s Going On Here?

America’s rootin’-tootin’ electric carmaker Tesla announced plans to open a new “gigafactory” in Germany late on Tuesday – and investors said “Ja, bitte”, sending its shares up on Wednesday.

What Does This Mean?

Up to now, Tesla’s been building and shipping all its vehicles from the trendy and tech-friendly Bay Area. But it’s claimed its spot in the world’s parking lot with a new manufacturing hub in China, and has considered building plants in a few European locations too. The UK, Tesla reckoned, is too risky with Brexit waiting in the wing mirrors, but Germany’s capital city – the European tech hub that’s also the birthplace of the internal combustion engine – flipped all the right switches.

Tesla likely hopes its local presence will boost sales in the country, especially given Germany’s newly introduced electric vehicle subsidies. But there are roadblocks ahead too: Tesla’s factory, which should be purring by 2021, will put it in direct competition with homegrown giants Daimler – owner of Mercedes – and the world’s biggest car manufacturer, Volkswagen.

Why Should I Care?

The bigger picture: Can Tesla scale the wall?
While it’s fair to say Tesla is a pioneer of the electric car industry, the question remains whether it can sustainably produce better cars than its long-established rivals. They’ve been perfecting their craft for decades, and aren’t about to break down because they now have to add a battery to their vehicles. So with plenty of competition from new and existing carmakers on the road ahead, it’ll only get tougher for investors to tell which car will cross the finish line first.

For markets: Investors turn the heat off Tesla.
Tesla’s better-than-expected third-quarter profit last month might’ve helped it shed the undesirable title of this year’s most profitable “short” investment – one whose share price investors think will fall (tweet this). That title may soon be carjacked by Japanese rival Nissan, which cut its profit forecast by 70% this week.

The big reason Tesla’s fortunes may rest on China

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The big reason Tesla’s fortunes may rest on China

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Spoiled For Choice

Spoiled For Choice

What’s Going On Here?

Fresh data out on Wednesday showed that inflation – the rate at which prices of goods and services increase – rose more slowly than expected in the UK and US last month. That’s both good news and bad news for you…

What Does This Mean?

With the UK lowering its limits on electricity and gas prices, its consumers have been spending less on energy – and that’s contributed to the lowest rate of inflation in nearly three years. But core inflation – which excludes energy, fuel, alcohol, and tobacco prices – was exactly what economists had predicted for October.

Inflation in the US last month was higher than in the UK overall, but the closely watched core measure was actually lower than predicted. One reason for that could be slowing hotel price rises: recent wildfires in tourist hotspot California might’ve put visitors off, leading to a bump in promotional offers. Another might be clothes prices, which have fallen where the UK’s have risen.

Why Should I Care?

For markets: Vindication for central banks.
Slower-than-expected inflation probably vindicates the Bank of England’s decision not to cut interest rates last week, and it’ll probably encourage the Federal Reserve to hold steady when it makes its next US rates decision this month. Neither economy appears to be in dire need of the boost to inflation that lower rates would provide (by way of cheaper borrowing). That’s perhaps bad news if you were hoping to spend big this holiday season – but hey, at least rates aren’t likely to rise either.

The bigger picture: More good news than bad.
With employment and wage increases as strong as they currently are in the UK and US, consumers’ willingness to spend their hard-gotten gains is generally good for the economy. It’s good for Walmart too, but investors’ excitement for its earnings report on Thursday may be tempered by recent analysis from Bank of America: it showed consumer spending has been slowing recently.

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💬 Quote of the day

“Everything has its wonders, even darkness and silence, and I learn whatever state I am in, therein to be content.”

– Helen Keller (an American author, political activist, and lecturer)

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📚 What we're reading

  • This is the age of global protests (Project Syndicate)
  • Is no election safe from Russian interference? (IFL Science)
  • What business founders wish they’d known (Inc.)
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