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Good morning readers. Stocks have decided to chill a little after starting off the year hot. Markets took a tumble yesterday as investors fretted over potential delays in interest rate cuts by the Federal Reserve. The Dow Jones dived 395 points, while the S&P 500 and Nasdaq played their own version of limbo, ending the day down. With the market catching its breath after sprinting through the first quarter, Fed Chair Jerome Powell's reassurance that rate cuts won't be rushed acted as a dose of reality. Meanwhile, health insurers felt the sting of Medicare adjustments, and Tesla's sales dip hinted at electric competition sparking investor concern.

On another note, Pulse of Progress will be taking a break for a little while and enjoying some R&R. This will be our last edition for the week. We’ll be back in your inbox April 15th.

Let’s jump into today’s storylines.

In today’s digest:

• GE is breaking up into three different businesses

• Headline Hustle: Apple tells Jon Stewart not to interview FTC Chair Lina Khan, Costco will start offering Ozempic prescriptions to its members, New York Times will now offer their articles via narrations

• Tesla has a shaky Q1

• Pulse Points: What’s Trending

BUSINESS

Once known as the ‘everything company,’ GE is finally splitting up

Imagine if the Swiss Army Knife decided it was time to separate the corkscrew from the blade. That’s kind of what happened with GE, a conglomerate that once lit up your life (quite literally) and now is lighting up the news with its latest split.

From everything to not-so-everything anymore

GE is waving goodbye to its days as a one-stop-shop for your electrical, financial, and even household needs. Founded by Thomas Edison in 1892, this industrial behemoth was sculpted into a titan by Jack Welch. Yet, the 21st century hasn’t been kind to GE. Bloated by bad deals and staggering under a mountain of debt, the company found itself doing the corporate equivalent of juggling with too many balls in the air.

But instead of untangling its financial knots, GE went on a spending spree, buying back shares and throwing dividends around like confetti. Spoiler alert: It didn’t help. By 2018, the company was handed its walking papers from the Dow Jones Industrial Average, a club it had been part of since the early days of the Model T Ford.

Enter Larry Culp, the CEO with a plan. Since taking the helm in 2018, Culp’s been like a man on a mission, offloading everything from GE’s stake in NBC to its legendary light bulb business. The goal? Slash debt and streamline the giant.

• The climax of this corporate saga came with the announcement of GE’s breakup into three entities: GE Healthcare, GE Aerospace, and GE Vernova.

• Since then, GE’s stock has seen a revival, nearly doubling in 2023, and continuing its ascent in 2024.

Big picture: As GE Aerospace takes off with Culp in the cockpit, speculation swirls about his future. Could he be the next captain for Boeing? While he plays coy, one thing’s for sure: GE’s story of reinvention is far from over. In shedding its conglomerate skin, it may just have found a blueprint for modern corporate survival.

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IN THE KNOW

Headline Hustle

🎙️ Apple tells Jon Stewart not to interview FTC Chair Lina Khan on his podcast. Comedian Jon Stewart revealed that Apple discouraged him from interviewing FTC Chair Lina Khan on his podcast while hosting "The Problem With Jon Stewart" on Apple TV+. During an episode of "The Daily Show," Stewart disclosed Apple's request, questioning why the company might be hesitant to engage in certain conversations publicly. Khan suggested it reflects the risks of concentrating power in a few corporations. Stewart's revelation follows the DOJ's antitrust lawsuit against Apple. Apple has not responded to requests for comment.

💉 Costco will start offering Ozempic prescriptions to its members. Costco is expanding its healthcare offerings to US members, now providing access to GLP-1 weight loss prescriptions, like Ozempic, through its partnership with Sesame. Initially offering online health checkups, the collaboration evolved in response to customer inquiries about weight loss support. The new three-month program includes a video consultation, prescription if appropriate, and ongoing guidance. While medication costs are separate, Sesame's service aims to address an unmet need, targeting a broad demographic affected by obesity.

📰 The New York Times will offer the majority of its articles to users as narrations via an automated voice. The New York Times aims to offer most of its articles as narrations through automated voice technology, positioning itself as a leading audio news provider. With over 2,300 audio recordings published in 2023 and 1 million podcast downloads, including the popular "The Daily," the move underscores the company's push into audio journalism. Initially available to 10% of users, the narrations will eventually extend to all articles and app users, providing a personalized experience.

AUTO

Tesla’s quarterly deliveries hit a speed bump

Tesla, the darling of the electric vehicle (EV) world, has hit a bit of a snag. For the first time since 2020, Elon Musk’s brainchild reported a year-over-year dip in quarterly deliveries, sending Wall Street into a bit of a tizzy.

Missing the mark

In the first quarter of 2024, Tesla handed over the keys to 386,810 vehicles worldwide, marking an 8.5% drop from the previous year. This hiccup meant Tesla’s performance was at its lowest since the latter part of 2022. Despite reclaiming its crown as the world’s top electric-vehicle seller from China’s BYD, the news was a wake-up call, not just for Tesla but for the EV market at large. It seems the electric dream is encountering a bit of traffic, with consumer enthusiasm not quite matching the speed of automakers' ambitions.

Tesla's recent delivery figures sent its shares down around 5%, contributing to a 33% tumble in its stock price this year. This puts Tesla just ahead of health insurer Humana in the race nobody wants to win – the S&P 500’s biggest losers.

The shortfall has sparked debates about consumer demand and Tesla's growth trajectory for the year.

• Production setbacks, including a shutdown at its German plant and a dramatic pause in the U.S. due to an arson attack, certainly didn’t help.

• Nor did a decrease in Model 3 production as Tesla rolled out a refreshed version of the car.

But it’s not all bad for the EV company. Tesla’s production numbers, although down from last year, still showed resilience. And let's not forget, amidst these challenges, Tesla is navigating a changing landscape with increased competition, especially from Chinese automakers like BYD, which is hot on its heels with more affordable EV options.

Looking ahead…Tesla’s strategy seems to pivot towards boosting its software game, particularly with its "Full Self-Driving Capability" package. With a free trial to sweeten the deal, Tesla is banking on software revenues to keep its financial engines (er, batteries) revving.

SNIPPETS

Pulse Points

• WeWork plans to exit Chapter 11 bankruptcy in the U.S. and Canada by May 31, having secured over $8 billion in rent reductions from landlords.

• Two hundred musicians have urged tech companies and developers through an open letter to avoid diminishing human creativity with AI music generation tools.

• A major earthquake hit Taiwan early Wednesday, causing building collapses in the south and generating a tsunami that affected southern Japanese islands.

• Donald Trump's media company is suing its co-founders for failing to launch the company and attempting to block a deal, seeking to prevent them from owning shares or appointing board members.

• Amazon will discontinue its "Just Walk Out" cashierless technology in U.S. Amazon Fresh grocery stores, which allowed automatic charging of shoppers.

• Taylor Swift has been added to Forbes’ annual billionaire list.

• House Republicans, led by a GOP leadership member, are proposing a bill to rename Washington Dulles International Airport in D.C. after former President Trump.

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