Market Overview - The U.S. stock market finished higher on Thursday, with the Dow Jones Industrial Average up nearly 0.2% to 46,519.72, the S&P 500 adding 0.06% to 6,715.35, and the Nasdaq climbing about 0.4% to 22,844.05 [1] Company Highlights - **SoundHound AI Inc. (NASDAQ:SOUN)**: Shares surged by 10.46%, closing at $17.84, with an intraday high of $18.39 and a low of $16.45. The 52-week range is $24.98 to $4.56. The company gained recognition as a leader in IDC MarketScape's assessment of conversational AI platforms, attracting renewed investor interest due to strong revenue momentum [2][1]. - **IonQ Inc. (NYSE:IONQ)**: Stock rose by 10.32%, closing at $69.60, reaching an intraday peak of $69.60 and a low of $64.41. The 52-week high is $76.13 and the low is $8.79. Investors are monitoring IonQ as it pulls back from recent highs, potentially entering a favorable buying zone [3][1]. - **Occidental Petroleum Corp. (NYSE:OXY)**: Stock fell by 7.31%, closing at $44.23, with an intraday high of $47.92 and a low of $43.84. The 52-week range is $56.49 to $34.78. The company is reportedly considering selling its OxyChem division to Berkshire Hathaway in a deal valued at approximately $10 billion, which could streamline operations [4][1]. - **Ondas Holdings Inc. (NASDAQ:ONDS)**: Saw a significant rise of 25.99%, closing at $9.21, with an intraday high of $9.34 and a low of $7.66. The 52-week high is $9.34 and the low is $0.57. The surge followed the announcement of a major purchase order for Wåsp drones, marking its entry into the U.S. defense market [5][1]. - **Tesla Inc. (NASDAQ:TSLA)**: Stock declined by 5.11%, closing at $436, with an intraday high of $470.75 and a low of $435.57. The 52-week high is $488.54 and the low is $212.11. The decline is attributed to a significant drop in car sales in Italy, which fell by over 25.6% in September, and concerns over expiring Federal EV credits [6][1].

Core Viewpoint - U.S. franchise auto dealerships are showing resilience in fundamentals despite potential macroeconomic headwinds, with demand performing better than expected in the near term [1][2]. Demand and Affordability - Retail new-vehicle sales are experiencing mid- to high-single-digit growth in Q3, driven by stable consumer spending and limited price increases from OEMs despite tariffs [4]. - The expiration of certain EV incentives has accelerated demand, increasing the battery-electric vehicle mix to approximately 10% in the current quarter, up from about 7% in the previous quarter [4]. Inventory and Profitability - Inventory levels and days' supply are stable, contributing to a gradual normalization in gross profit per unit (GPU) rather than a sudden reset [5]. - Used vehicle volumes remain strong, and service lanes are experiencing healthy traffic and pricing, indicating robust higher-margin fixed operations [5]. Market Outlook - JPMorgan has raised its Q3 estimates, projecting them to be about 2% above previous estimates and roughly 7% above consensus [6]. - The bank's top picks in the sector are Lithia & Driveway and AutoNation, although a recent cyber incident may impact certain U.K.-exposed operators [6]. Used Vehicle Market - Industry checks indicate mid- to high-single-digit year-over-year gains in used retail sales through July and August, with tight late-model supply expected to ease in the coming quarters [7]. - Wholesale prices have cooled after an initial spike due to tariffs, and retail/wholesale spreads suggest a favorable GPU environment, although sourcing remains competitive [7]. Future Risks - Beyond Q3, there are increasing risks to demand and GPUs as EV credits expire and tariffs are fully reflected in vehicle prices amid a softening labor market [8]. - JPMorgan projects a U.S. SAAR of approximately 15.5 million in 2026, slightly down from 16.0 million in 2025, with potential upside if trade outcomes with Canada and Mexico improve [8].

President Trump is expected to sign a resolution this morning blocking California's plan to phase out gas-powered cars by 2035. This comes as GM is investing$4 billion dollars in US production in response to tariffs on imported vehicles and auto parts. John McNeel joins us now to discuss all of it.He's the CEO of DVX Ventures, former Tesla president and current General Motors board member. It's good to have you, John. The the the order on California, we knew this was coming.How big of a deal is it for the a ...