adam jonas, morgan stanley. >> what's great, listening to adam. i think he provides rationality with the big picture thought. with i is clearly what's out there. the must have element for the stock for investors. the real question is, is this a must have? do one of the big tech guys have to answer this company? i actually think the big three are in position. they see transportation as a service, as a business, they have an entitlement and a right to and a business they're going to be n. i'd be very surprised if actually tesla does this alone. on a valuation. the stock is strechld. i get the big picture. i'm not a buyer. >> i think if you own it, maybe the best thing is to do nothing at all. i think the thing to remember is stock at once a year is 30% peak to trough decline is an opportunity to get you in. i can't help you on tesla right there. intel will close the deal. let's go from ev to av, autonomous vehicles. that's probably a decent play if you look out a few years buying a company that has a half a billion from sales. they make the sensors

let's bring in adam jonas from morgan stanley and paul editor of the revs institute. i'll start with you. becky made the comment that was ironic that ford had the best sales growth given that the ceo was fired two weeks ago, but is the industry still not learning the lessons of some of the worst apparel retailers. even into what appears to be a slowing market, let's keep pumping out the inventory. we have too many cars in the lots and no pricing power. >> well, i think ford's inventory numbers were actually down in the month of may. which would be a very healthy sign and of course one reason for investor cheer. but, i think you have to say honestly by any historical measure car sales are pretty darn good right now. the economy is in good shape. we've had seven-straight years since the gm bankruptcy of rising car sales. last year was an all-time record. this is a cyclical business. some cooling off was inevitable. guess what, it's happening. that's what was supposed to happen basically. >> well, you know, listen, the average age of a used car on the road is still 10 or

adam jonas is the head of the global auto research at morgan stanley and joins us live. adam, always great to speak with you. >> thanks for having us. >> part of this sb you're expecting a rerating because of the exit of european operations. but you also make it seem like this, perhaps, could be a precursor to the exit of other businesses or other operations what are you thinking of, specifically >> we think that some of the optionalty, the importance of general motors, and perhaps its peers into the auto 2.0 or the future of transportation might be undervalued the race to autonomous driving, melissa, is a race for miles, quantity of miles, and quality of miles. and let's say tesla does about 5 million miles per day. uber does about 100 million miles per day. general motors' cars, collectively, 2.5 billion miles per day. so the challenge for the management team and the opportunity is how do they harvest those miles, process them, and create a market place through which they can monetize. they may not be the best ones to monetize, they're not going to do paid search and ad

there was an interesting note this morning from morgan stanley analyst adam jonas. car-rental business model is not sustainable and may require substantial restructuring and investment in technology. in rentals, he is not terribly positive. you have to look at what has happened this year, not pretty. we have a chart of these various stocks. the s&p 500 is an white. you had the us of the auto retail index, which is down nearly 20%, even given today's bounce. hertz is in yellow and avis budget and purple. all of them have underperformed at the broader market this year. yes, up today but not recouping those losses. scarlet: u.s. president donald trump is set to welcome india posey prime minister narendra modi to the white house and about half an hour. mumbaid this report from on what to expect from this meeting. meets with modi president trump in washington later today, an opportunity to create a good rapport and set the tone for their future relationship. this will be about rapport, about chemistry, romance, if you will, and some of that was already evident on twitter

adam jonas had a note out on ford according to phil lebeau. outlook may be need to be reset by 50% lower. not at all unprecedented to reassess the strategic priorities. >> holy kou. you know, a lot of people are upset that mark field got fire. one of the most important cost saving initiatives was nixed by the president. but wow that would be unbelievable. these auto companies it is peaking around the world. although i have to tell you some of the germany automakers are doing quite well. >> yeah. volkswagen is going to nut a lot of -- is going to put in a lot of charging stations. >> we didn't talk about that. >> a lot of them in europe. >> they have to put it -- 70 billion euros to recapitalize that. >> that's right. >> that's seen as a positive in -- >> that's a fantastic move by them. very well run. the international markets are far more excited than our markets in terms of what i see. >> stats out today on euro's gdp per head has outpaced the u.s. for years. what happened to the talk about the sclerotic socialist europe? >> spain has nice g

. >> joining us to talk about it, adam jonas, the analyst behind that research. ctors that you cite in this. give us a quick rundown of what those are. >> well, you know, we're not uncommon being cautious on used car values, but that is probably at the core of the thesis. there are many reasons to be ca cautious on auto credit. the thing i think differentiates our work, folks, is what i would use or refer to the osborne effect. osborne computer company in the early 1980s, they had a great 30-pound portable computer. they really hyped up their next-generation computer. they were a little bit late on it, so everybody stopped buying the current computer and they ran out of money. what we're talking about here is technological obsolescence of the $2 trillion used car park. i'd remind you nine out of ten new car purchases involve a trade-in. so the auto companies are really promising, hey -- and they're differing in the next few years dramatic improvements of safety and electrification. why am i, as a consumer, going to drop $40,000 today? why don't i just wait? that c

meeting moments away, we will bring you more must haves on the break and morgan stanley analyst adam jonas winner? it's not tesla. plus, safety trades are surging as bonds and golds continue to drive t. strategist says fear not, stocks are still a buy. we'll tell him what has him so

. >> adam jonas with a note on tesla.t their price target at 305, but bring up the bear case about 50 bucks >> interesting piece what they're saying they said something that the bears never ever want to hear which is that if this model 3 sells really well, their profitability could be -- when you hear the word profitability associated with tesla, listen, it will be sunny out and hot, but it will snow. >> his point though largely is that this is no longer a stock that's keyed off of what happens to the model 3. >> no. >> or semi-truck it's more about shared mobility and whether or not they can leverage data and everything else. >> yeah, it's about technology look, the bulls have tried to bake it into the technology store. you don't need the traditional price to earnings ratio. it's ridiculous that it's bigger than ford. i think that you can't get in the way of it. you can't short it it's a little -- you know what it's like i want to bring this up to really bother people it's a little bitcoin. >> which cracks 3 k today. >>