What Investors Make of Elon Musk’s Outspokenness
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Kamala Harris puts the spotlight on her running mate as she kicks off a battleground state blitz. With Tim Walls by my side and with all of you at our side.

Let us fight for the promise of our future. Plus, the Bank of Japan walks back talk of interest rate hikes after a volatile few days in markets. And with Elon Musk wading into social and political debates, we'll look at how that's going down with investors. It's Wednesday, August 7th. I'm Luke Vargas for The Wall Street Journal, and here is the AM edition of What's News, the top headlines and business stories moving your world today.

Last night, Vice President Kamala Harris introduced Minnesota Governor Tim Walz as her running mate at a raucous rally in Philadelphia.

Journal-White House reporter Tarini Party was there. One of the standout moments came even before Harris and Walz took the stage. It was from Pennsylvania Governor Josh Shapiro, who had been on the shortlist for the vice presidential pick. He gave a fiery speech and stressed that even though he didn't get the job, that he was still going to be campaigning hard for the Democratic ticket. This was important for the Democrats to show that they're united after this nomination process.

Harris praised Walls, a former high school teacher and football coach, as a homespun leader and highlighted his efforts as governor to pursue gun control and defend abortion rights, the latter of which he cast as a matter of personal freedom. In Minnesota, we respect our neighbors and their personal choices that they make. Even if we wouldn't make the same choice for ourselves, there's a golden rule. Mind your own damn business. Yeah!

After last night's rally, Harris and Walz are set to continue a five-day tour of seven battleground states ahead of the Democratic convention in Chicago later this month.

Meanwhile, Missouri Democratic Representative Cori Bush has become the second member of the left-leaning House group known as the Squad to lose a Democratic primary this summer. Bush was defeated by prosecuting attorney Wesley Bell, a well-funded challenger backed by the American-Israel Public Affairs Committee, or AIPAC, which has targeted members of Congress who've criticized Israel and its handling of the Gaza War on the national stage.

And in Michigan, Representative Alyssa Slotkin has won the Democratic primary in a race for a Senate seat that could decide control of the chamber in November. Slotkin will square off with former Republican Representative Mike Rogers, who bested a crowded field with the help of an endorsement by former President Trump. A week after Japan's top central banker shook global markets with his comments about interest rate hikes, one of his deputies is walking things back.

Japanese stocks jumped today after the Bank of Japan's deputy governor promised not to raise rates when markets are unstable. That moved markets closer to where they were before the July 31st news conference by the bank's governor, who had suggested he wanted to keep raising rates despite lackluster consumer spending.

And in other news that could move markets today, Japanese tech investor SoftBank is planning a nearly $3.5 billion share buyback in another encouraging sign for the country's stock market. That comes despite SoftBank reporting a surprise first quarter loss after two consecutive quarters of profits.

And shares of Novo Nordisk are down in Copenhagen after the company slightly lowered its profit guidance. The Wagovi maker did lift its sales guidance, however, as weight loss drug demand continues to surge, with it forecasting a 22 to 28 percent rise in group sales this year.

American workers should brace for smaller pay raises. According to employer advisory firm WTW, nearly half of 1,900 companies polled say they have lowered pay rises this year, with the median raise dipping from 4.5 percent in 2023 to 4.1 percent this year. And that's expected to drop below 4 percent next year.

And if that forecast comes to fruition, where will it leave you? Especially as prices for everything from healthcare to housing and utilities remain elevated, despite economic data showing that inflation is coming down. What's your view? Which of your costs are still going up? Which aren't? And how confident are you that your overall situation is going to get better?

To weigh in, send a voice memo to WNPOD at WSJ.com or leave a voicemail with your name and location at 212-416-4328. And we just might use it on the show. Coming up, Hamas appoints a new political leader. And we'll look at the effect that Elon Musk's outspokenness is having on his businesses. Those stories and more after the break. This message comes from Wall Street Journal sponsor C3.ai.

C3 Generative AI enables rapid access to secure, traceable, hallucination-free insights from enterprise systems, all while using any LLM, helping enterprises turn the invisible into the obvious. Learn more at c3.ai. This is Enterprise AI.

Hamas has tapped Yahya Sinwar as its next political leader after the killing of Ismail Haniyeh in Iran last week. Hamas's choice of Sinwar, the architect of the October 7th attacks against Israel and a U.S.-designated terrorist, is seen as cementing the group's role as an armed resistance movement instead of as a political entity with aims to govern.

Sinwar's ascension could also complicate ceasefire negotiations, with Arab mediators saying his whereabouts are unknown to many and that he goes days without communicating with Hamas political officials. Israeli officials have said they believe Sinwar is in a tunnel in Gaza and have vowed to hunt him down.

In Bangladesh, Nobel Peace Prize winner Muhammad Yunus, an economist and microfinance pioneer, has been chosen to lead a caretaker government following the abrupt resignation of its prime minister this week, capping weeks of violent protests. Yunus will take over a country regarded as an economic success story, thanks partly to its global apparel exports, but which is struggling with a dearth of jobs for young people, as well as inflation and diminishing foreign reserves.

Over the last month, Elon Musk has injected himself into a lot of headlines, endorsing Donald Trump in the immediate aftermath of the assassination attempt against him, accepting a challenge to fight the president of Venezuela, wading into debates over transgender health care, and ruffling feathers in Britain this week by saying high levels of immigration meant that a civil war there was inevitable, just to name a few.

But how are Musk's public pronouncements going over among investors in his businesses, especially as Tesla contends with slowing growth and as he rapidly scales up a new project to take on open AI and other artificial intelligence leaders? Columnist Tim Higgins is our resident Elon Musk expert here at the Journal.

Tim, are Musk's extracurriculars actually occupying more of his time now or are we just paying more attention to them? Well, it's a little bit of both, perhaps. We are noticing it more because he's become more engaged with social endeavors and really engaging in politics in a way that we hadn't seen several years ago when he would talk about how he didn't really see himself as being political.

Has Musk given an explanation for why he's become more outspoken? Yeah, Elon talks about the woke mind virus. His shorthand for what he kind of describes as progressive liberal ideas that are taking root, that he wants to combat. He feels like perhaps society isn't allowing different points of view. That's why he says he's bought the X platform, which was known as Twitter. He talks about how the world has changed around him and he doesn't really like it.

And how is all of this going over among investors, especially Tesla? Some investors are very concerned. Tesla is dealing with a very rocky automotive market. It has an old product lineup for the most part. It has Chinese rivals who have really figured out how to make more affordable electric cars. And it has issues in the global economy to deal with.

And meanwhile, Elon is talking about an AI future for the company. It has some investors rattled, wondering if maybe he could be spending more time at Tesla and not be engaging on X with all of these contentious issues that they worry are turning off some buyers.

Tim, where Musk's outspokenness seems to be feeding perhaps more directly into the success of one of his businesses is at X with, at least based on your reporting, Musk creating all of these news moments seemingly driving attention and focus to the platform. It is moments of potential that we see.

We have seen, according to third-party data, spikes in people downloading the app during some big moments in the last month or so. But we haven't yet seen a huge surge or return of those daily active users that make up the platform over the years. The third-party data is still seeing declines from when Elon took over. Really, the challenge here is convincing people that this is a place that they should make a daily habit.

It's still a little too early to say if that's actually happening, but that's the potential of this crazy election season that is so high profile. - Given all of this, it sounds like it might be a bit tricky to say whether Musk's social politics, his outspokenness,

on balance are hurting him more than they're helping him in a business sense. Is that right? Well, it's an interesting part of the Elon Musk empire is that they're all distinct businesses. So it's sometimes hard to do the final math of how it's affecting them all. Elon has argued that X in some ways is more than just a business to him. It's about defending free speech and being a platform for

ideas. And in that case, he has been successful that his ideas are getting out there. It's a powerful tool for him. Is it helping his other companies? There are some investors who would clearly argue that it is not helping. And really, the final proof in the pudding will be in the months and years ahead after the election. You know, what kind of hangover we see here.

There's that, and then there's what decisions he takes around XAI as well, his artificial intelligence startup, which has raised billions of dollars this year, we should note. Does he take it public or maybe keep it private? Yeah, it's hard to imagine he'd want to take it public anytime soon. After his experience with Tesla, he seems to be shy at the idea of taking companies public. He has to give up too much control. It gets too much scrutiny. But XAI is an interesting example of how, even though Elon Musk has become a

more controversial to some. He still has a lot of sway and a lot of holding with the investor class. There are still people with lots of money who want to bet on him because of what he has accomplished. And even if he is distracted by in some people's calculations with what's going on on X, he still has a lot of brainpower to change the world and they want to be part of that change.

I've been speaking to Wall Street Journal columnist Tim Higgins. Tim, thank you so much. Thank you. And that's it for What's News for Wednesday morning. Today's show was produced by Daniel Bach with supervising producer Christina Rocca. And I'm Luke Vargas for The Wall Street Journal. We will be back tonight with a new show. Until then, thanks for listening. This message comes from Wall Street Journal sponsor C3.ai.

C3 Generative AI enables rapid access to secure, traceable, hallucination-free insights from enterprise systems, all while using any LLM, helping enterprises turn the invisible into the obvious. Learn more at c3.ai. This is Enterprise AI.