U.S. and Ukraine Strike Mineral Agreement: Economic Lifeline or Strategic Gamble?
5mins read: U.S. Secures Key Stake in Ukraine’s Mineral Wealth Amid Ongoing War Efforts
Hey Small Biters,
U.S. and Ukraine Strike Mineral Agreement: Economic Lifeline or Strategic Gamble?
Framework Agreement Established: The deal outlines joint ownership of a fund, with 50% of future proceeds from Ukraine's state-owned mineral resources allocated to the U.S. This partnership aims to develop Ukraine's vast deposits of rare earth elements and other valuable minerals.
Revised Terms Favor Ukraine: Initially, the U.S. demanded $500 billion in profits as compensation for wartime aid. However, this stipulation was removed, resulting in more favorable terms for Ukraine. The agreement now focuses on equitable revenue sharing and mutual investment.
Exclusion of Security Guarantees: Notably, the agreement does not include explicit security assurances for Ukraine against Russian aggression. While economic collaboration is emphasized, discussions regarding security are expected to occur separately during high-level meetings between Presidents Zelensky and Trump.
Pending Legislative Approval: The Ukrainian Parliament must ratify the agreement before it becomes effective. This legislative process will determine the final implementation and operationalization of the deal.
Strategic Implications: This partnership aims to secure continued U.S. military support for Ukraine while providing the U.S. with access to essential minerals critical for various industries, potentially strengthening bilateral ties and economic cooperation.
Tesla's Valuation Dips Below $1 Trillion Amid Political Controversies
Sharp Decline in European Sales: In January, Tesla experienced a 45% drop in vehicle sales across Europe compared to the same month the previous year, selling only 9,945 units. This decline reduced Tesla's European market share from 1.8% to 1%.
Stock Value Impact: The substantial decrease in sales led to a 9% drop in Tesla's share price, closing at $302.80. This decline erased $93 billion from Tesla's valuation, bringing it below the $1 trillion threshold.
Influence of CEO's Political Activities: Analysts attribute the downturn partly to CEO Elon Musk's political involvement, including his support for President Donald Trump and endorsements of far-right European political figures. These actions have reportedly alienated Tesla's traditionally progressive customer base, leading to protests and decreased sales.
Increased Competition from Chinese Manufacturers: During the same period, Chinese automaker SAIC Motor saw a 37% increase in European sales, selling nearly 17,000 vehicles and capturing a 2.3% market share. Additionally, BYD, another Chinese manufacturer, outsold Tesla in the UK for the first time, indicating growing competition in the electric vehicle market.
Broader Market Trends: Despite Tesla's decline, overall battery electric vehicle sales in Europe rose by 34% in January, accounting for 15% of the automotive market. This suggests that while the EV market is expanding, Tesla's position within it is weakening due to various internal and external factors.
US Stocks
Tech rout continues, sending US stocks lower
The S&P 500 fell 0.5%, the Nasdaq 100 gave back 1.2%, and the Russell 2000 dipped 0.4% on Tuesday.
With today’s retreat, the Magnificent 7 closed 10% below their December all-time high. TeslaTSLA $306.11 (-8.48%) was a major drag on the cohort’s performance after data showed a big slump in sales across Europe. NvidiaNVDA $128.50 (-2.82%) also continued to slump with earnings due after the close on Wednesday, the exact opposite of what was happening to the stock ahead of the release of its previous report.
Home DepotHD $394.98 (2.83%) gained after finally returning to same-stores sales growth in the fourth quarter.
Despite reporting better-than-expected earnings and an outlook to match, Hims & HersHIMS $39.16 (-22.39%) tanked as traders continue to wrestle with what the end of the semaglutide shortage means for its weight-loss drug business.
PayPalPYPL $74.32 (-1.58%)’s plan to turn Venmo into a $2 billion revenue driver was no panacea for the stock. Record earnings didn’t help Riot PlatformsRIOT $9.45 (-6.81%), which was dragged down by a fall in the price of bitcoin.
What Else Are We Biting
Trump floats $5 million ‘gold card’ as a route to U.S. citizenship.
House Republicans pass budget resolution and the cut to Medicaid.
DOGE has an official ‘acting’ administrator, and it’s not Elon Musk.
Biting Fact Of The Day
As of the end of 2024, there were 1,807 cinema locations with IMAX systems around the world.
The deal outlines joint ownership of a fund, with 50% of future proceeds from Ukraine's state-owned mineral resources allocated to the U.S. This partnership aims to develop Ukraine's vast deposits of rare earth elements and other valuable minerals.