🤠 Save a horse, ride a robotaxi

What’s going on here?

Tesla launched its robotaxi service in Austin, Texas on Sunday – and investors walloped the firm’s stock price up by a yeehaw-inducing 8% on Monday.

What does this mean?

The robotoaxi rollout is invite-only for now, and it’s been extended to a select few investors, Tesla super-fans, and social media influencers. Makes sense: riding in a driverless car is certainly TikTok-worthy, and Elon Musk does have his own platform. In fact, Tesla’s head honcho took to X to share the news, including the $4.20 flat fee that testers will pay per trip. Now, the rides may be driverless, but they’re not quite humanless yet: Tesla’s robotaxis come with a safety monitor in the passenger’s seat. That’s in contrast to Musk’s original claim that the rollout would have “no one in the car” – and to competitor Waymo’s offering of fully empty vehicles. The Google-owned company launched its service back in 2018, and currently operates over 250,000 rides per week.

Why should I care?

The bigger picture: Lights, camera… nope, that’s it.

It’s not just Tesla and Waymo in the autonomous race: Amazon’s Zoox is planning to launch its own driverless rides later this year. But there’s a big difference between Zoox and Waymo’s tech and Tesla’s. See, the duo employs a combination of cameras, radars, and a distance-determining method called lidar, while Tesla uses… just cameras. That’ll make the firm’s systems less expensive, but it’s a riskier bet – and one that comes with greater scrutiny from US regulators.

For markets: This is just the start.

Robotaxis are about more than ride-hailing innovation: they could fundamentally change how we drive (or don’t). That’s why the market is so jazzed about steps in that direction – even if they’re much smaller and slower than originally promised. See, profit margins on regular EVs have been shrinking as competition has heated up, so a driverless upgrade could be the next big thing for carmakers. And if it is, that’d seriously reshape the economics of transport, car ownership, and even insurance.

What’s going on here?

US home sales unexpectedly inched higher in May – a positive shimmer in the country’s otherwise dim housing market.

What does this mean?

Economists were expecting a 1.3% drop, which makes the 0.8% uptick look almost radiant. But it was the smallest May increase since 2009 – and compared to the same time last year, home sales fell by 0.7%. Mortgage rates and house prices are both high right now: a killer combination for putting off would-be buyers and turning the housing market’s peak season into a slog. In fact, the median home price was at its highest-ever for the month of May, hitting $422,800. And if you compare to the start of the pandemic five years ago, prices are up 51%. So you can see why folk aren’t exactly rushing into property purchases right now.

Why should I care?

For markets: A small step in the right direction.

The uptick in sales is a welcome sign for lenders and mortgage brokers, who make their money from people buying homes and taking out loans to do so. But there’s a long way to go yet. See, inventory has been rising, with house listings up 20% on last year. That, combined with sluggish sales, means that the housing market will probably need lower interest rates or cheaper prices before things really start to light up again.

The bigger picture: The price isn’t right.

A household earning $100,000 can now afford just 37% of available homes, down from 65% in 2018. That’s choking demand, which (beyond just affecting house prices) has ripple effects on industries tied to real estate, like construction and home goods. Plus, how folk are feeling about property is a good indicator of consumer confidence overall – and low confidence isn’t a great thing for the economy.