Laser Equipment Supplier Beams Ahead 80%

Good Afternoon! 

Hey, everyone. It's Adam from Elite Trade Club. 

Here’s what moved the market today.

Markets 📈

Most indexes inched forward today, with the Dow Jones setting another all-time high. The Russell 2K didn’t fare as well, dropping one-third of a point instead.

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Market-Moving News 📈

Southwest Airlines Charts New Course Amid Profit Push and Leadership Pressure

Southwest Airlines is preparing to make significant changes to boost profits amid pressure from activist investor Elliott Investment Management, which has been pushing for leadership changes. Over the summer, Southwest announced updates to its longstanding business model to increase revenue. These include switching from open seating to assigned seating, offering more spacious seats at higher fares, and adding red-eye flights to its schedule.

The airline has also begun listing flights on platforms like Google Flights and Kayak while revamping its advertising to appeal to younger travelers. However, according to COO Andrew Watterson, these efforts alone are not enough, and more changes to the airline's network are on the horizon.

While no station closures or furloughs are planned, Southwest may reduce its presence in certain cities, allowing staff to transfer to other locations. The focus is on cutting costs and optimizing routes for profitability. Other airlines, such as JetBlue, have taken similar steps by trimming routes to maximize revenue.

Southwest is expected to provide further details about its upcoming initiatives during an investor day at its Dallas headquarters later this week. Leadership changes are also anticipated, with executive chairman Gary Kelly set to step down after next year’s shareholder meeting.

Toyota Faces Legal Heat Over Forklift Emissions Scandal

Toyota is being sued in a proposed U.S. class action for allegedly cheating on emissions tests in nine of its forklift truck engines. The lawsuit, filed by forklift buyers in San Francisco federal court, accuses Toyota and its affiliate, Toyota Industries, of manipulating software and substituting engines to achieve better results during emissions tests than what the forklifts could perform in real-world conditions. This manipulation was uncovered during an internal Toyota probe earlier this year.

Toyota halted some forklift sales in Japan in March 2023 after acknowledging emissions issues. However, the plaintiffs claim Toyota’s misconduct was first triggered by an inquiry from the U.S. Environmental Protection Agency, although regulators have not taken formal action.

The lawsuit was brought by three companies: a South San Francisco landscaping supplier, a New York-based nursery, and a New Jersey food distributor. They claim they would not have purchased Toyota's forklifts if they had been aware that the vehicles failed to meet emissions standards and performed below expectations. The lawsuit seeks both compensatory and punitive damages, including full refunds.

Toyota’s internal investigation revealed a "contractor’s mentality" within its engine division, leading to a lax approach toward emissions compliance. Both Toyota and the plaintiffs’ lawyers have yet to issue additional comments.

New U.S. Rules Target Chinese Auto Tech in National Security Push

The Biden administration has introduced new regulations aimed at blocking the sale or import of vehicle software from nations deemed a threat, particularly targeting China. This move is intended to safeguard national security by preventing potential risks posed by Chinese-made hardware and software. These risks include the possibility of remote sabotage, surveillance, or data collection through components like Bluetooth, Wi-Fi, and onboard computers.

The proposed rules, developed following a Commerce Department investigation, would force U.S. automakers and suppliers to eliminate Chinese-made software and hardware from vehicles. The new regulations focus on connected systems that link vehicles to external networks, ensuring that sensitive data and infrastructure are protected.

These restrictions are the latest in a series of escalating trade measures targeting Chinese-made vehicles and parts. Earlier this month, new tariffs were imposed on electric vehicles, batteries, and other key components. With China emerging as the world’s top auto exporter, producing affordable electric vehicles at scale, U.S. officials are concerned about the impact on domestic manufacturers.

The software ban is expected to take effect for the 2027 model year, while hardware restrictions would apply starting in 2030. This proposal mirrors other measures already in place, such as those tied to federal EV tax credits, which restrict the use of Chinese-made battery components.

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We already know Trump has vowed to "drill, baby, drill," which would be beneficial for domestic oil companies. Cryptocurrencies could also do well, especially with Trump's pro-crypto running mate, Senator J.D. Vance. Plus, Trump is also bullish on cryptocurrencies, referring to himself as pro-crypto.

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Laser Photonics [LASE] $18.80 (+80.60%)

Laser Photonics made headway after releasing a letter to shareholders covering strategies for future growth.

Biohaven Ltd [BHVN] $45.94 (+13.74%)

Biohaven shared positive results in a topline study today for its treatment of spinocerebellar ataxia.

AeroVironment Inc [AVAV] $204.50 (+11.90%)

AeroVironment stock is up thanks to the removal of a stop order related to a U.S. government contact.

Trump Media & Technology Group [DJTWW] $7.10 (-17.15%)

Trump Media slides further into the hole as investors remain uncertain about the former President’s plans for his shares.

MINISO Group Holding [MNSO] $13.72 (-16.65%)

MINISO stock fell after revealing plans to acquire stake in Yonghui Superstores, a large Chinese retailer.

Innovative Eyewear [LUCY] $9.05 (-16.13%)

Innovative Eyewear announced it would exercise warrants for $2.6 million in gross proceeds.

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That's it for today! Please, write us back, and let us know what you think of the Closing Bell Roundup. We're always eager to hear feedback!

Thanks for reading. I'll see you at the next open! 

Best Regards,
— Adam G.
Elite Trade Club

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