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This ETF provider launches a new way to play Tesla

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The $18B single-stock ETF explosion

An exchange-traded fund provider is helping investors make more bets on Wall Street’s most profitable momentum trades.

GraniteShares, which debuted its first installment of single-stock ETFs in 2022, now manages 20 of them. It includes the GraniteShares YieldBoost TSLA ETF (TSYY), which launched last month. The fund gives investors exposure to Tesla.

“This is about more and more people taking charge of their own finances,” GraniteShares CEO William Rhind told CNBC’s “ETF Edge” this week. “They want to be able to actively manage that and maybe try and outperform… That’s where we see things like leverage, single stocks really playing.”

He calls demand “a worldwide phenomenon” because it’s not just an opportunity for U.S. investors.

“We have investors all around the world that are looking to the U.S. ETF market first because that’s the biggest source of liquidity,” added Rhind. “They’re looking to the names that they know and love – the Teslas of the world [and] the Nvidias of the world. They’re only available here in the U.S., and that’s why people come here to trade them.”

But the firm acknowledges the strategy isn’t suited for everyone.

GraniteShares includes a disclosure in bold on its website: “An investment in these ETFs involve significant risks.”

As of Friday’s close, Tesla stock is nearly $100, or about 19%, off its all-time high – hit on Dec. 18.

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European businesses have never been this gloomy about China

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A L ‘Oreal store near the Nanjing Road Pedestrian Street in Shanghai, China on April 1, 2025.

Cfoto | Future Publishing | Getty Images

BEIJING — European business optimism about China has hit its lowest on record – worse than during the pandemic — due to slower growth and geopolitical worries.

A record 73% of respondents in the EU Chamber of Commerce in China’s annual survey said doing business in the Asian country has become more difficult in the past year, marking a new high for a fourth-straight year.

That’s just one of the several record lows in sentiment found in the annual survey, which has been published since 2004. The latest study released Wednesday, covered 503 respondents in January and February.

“Companies are really feeling the squeeze, being pessimistic, but again finding very compelling supply chains in China that necessitate a continued presence [in] the Chinese market,” Jens Eskelund, president of the chamber, told reporters this week.

Still, that doesn’t mean business confidence is close to returning.

“We haven’t seen an inflection point yet,” Eskelund said. “A lot of it boils down to uncertainty.”

The survey reflected how challenges for foreign businesses in China have largely increased since the pandemic lockdown in 2022 disrupted supply chains. While local brands have become more competitive, overall consumer demand has remained lackluster amid the real estate slump and uncertainty in the job market.

China's under-consumption a structural issue, but spending potential of the youth is very positive

Cosmetics companies were particularly hit. The industry blamed a drop in local demand and reported a 45% drop in revenue in 2024 from a year before — only the second decline in the past decade, according to the chamber’s report.

On the other hand, aviation and aerospace were the rare industries saying that doing business in China became easier.

Slower growth is diminishing China’s attractiveness relative to other markets.

A record low of only 12% of respondents were optimistic about profitability in China in the coming two years, while the fewest on record ranked the country as a top destination for future investments. Another record low of 38% of respondents said they planned to expand in China over the coming year.

And while Beijing has announced efforts to improve conditions for foreign investment, many challenges remain.

A record 63% of respondents said they missed business opportunities in China last year due to market access restrictions and regulatory barriers. Medical device businesses who responded said European companies experienced discrimination due to public procurement practices favoring domestic players.

The scale of pessimism echoed an annual survey of U.S. companies in China released in late January that showed a record share of American businesses were accelerating plans to relocate manufacturing or sourcing.

Meanwhile, 53% of respondents said they would increase their investments in China if more action was taken to improve local market access.

Supply chain competition

China remains dominant in the global supply chain for its ability to offer quality parts at the lowest price — the only way that businesses are able to stay competitive, Eskelund said, citing conversations over the last three weeks with hundreds of companies across the chamber’s six chapters in China.

When asked about supply chain diversification, more than a quarter of respondents said they were increasing onshoring to China as a way to meet localization requirements and better reach the domestic market.

A far smaller share at 10% of respondents said they were establishing overseas alternative supply chains while keeping their existing network in China. The survey also found that nearly half of respondents said their Chinese suppliers were also moving operations to other markets.

Chinese and EU leaders are set to hold a summit in Beijing in July as both try to strengthen bilateral ties amid higher U.S. tariffs. The EU is China’s second-largest trading partner on a regional basis.

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The West is recycling rare earths to escape China’s grip — but it’s not enough

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Annealed neodymium iron boron magnets sit in a barrel prior to being crushed into powder at Neo Material Technologies Inc.’s Magnequench Tianjin Co. factory in Tianjin, China.

Bloomberg | Bloomberg | Getty Images

BEIJING — As China tightens its grip on the global supply of key minerals, the West is working to reduce its dependence on Chinese rare earth.

This includes finding alternative sources of rare earth minerals, developing technologies to reduce reliance, and recovering existing stockpiles through recycling products that are reaching the end of their shelf life.

“You cannot build a modern car without rare earths,” said consulting firm AlixPartners, noting how Chinese companies have come to dominate the supply chain for the minerals.

In September 2024, the U.S. Department of Defense invested $4.2 million in Rare Earth Salts, a startup that aims to extract the oxides from domestic recycled products such as fluorescent light bulbs. Japan’s Toyota has also been investing in technologies to reduce the use of rare earth elements.

According to the U.S. Geological Survey, China controlled 69% of rare earth mine production in 2024, and nearly half of the world’s reserves.

Analysts from AlixPartners estimate that a typical single-motor battery electric vehicle includes around 550 grams (1.21 pounds) of components containing rare earths, unlike gasoline-powered cars, which only use 140 grams of rare earths, or about 5 ounces.

Pretty soon, the first generation of EVs will be up for recycling themselves, creating a pool of ex-China material that will be under the control of the West.

Christopher Ecclestone

Principal and mining strategist at Hallgarten & Company

More than half of the new passenger cars sold in China are battery-only and hybrid-powered cars, unlike the U.S., where they are still mostly gasoline-powered.

“With slowing EV uptake (in the U.S.) and mandates to convert from ICE to EV formats receding into the future, the imperative for replacing Chinese-sourced materials in EVs is declining,” said Christopher Ecclestone, principal and mining strategist at Hallgarten & Company.

“Pretty soon, the first generation of EVs will be up for recycling themselves, creating a pool of ex-China material that will be under the control of the West,” he said.

Only 7.5% of new U.S. vehicle sales in the first quarter were electric, a modest increase from a year ago, according to Cox Automotive. It pointed out that around two-thirds of EVs sold in the U.S. last year were assembled locally, but manufacturers still rely on imports for the parts.

“The current, full-blown trade war with China, the world’s leading supplier of EV battery materials, will distort the market even more.”

Rare torque

Of the 1.7 kilograms (3.74 pounds) of components containing rare earths found in a typical single-motor battery electric car, 550 grams (1.2 pounds) are rare earths. About the same amount, 510 grams, is used in hybrid-powered vehicles using lithium-ion batteries.

In early April, China announced export controls on seven rare earths. Those restrictions included terbium, 9 grams of which is typically used in a single-motor EV, AlixPartners data showed.

None of the six other targeted rare earths are significantly used in cars, according to the data. But April’s list is not the only one. A separate Chinese list of metal controls that took effect in December restricts exports of cerium, 50 grams of which AlixPartners said is used on average in a single-motor EV.

The controls mean that Chinese companies handling the minerals must get government approval to sell them overseas. Caixin, a Chinese business news outlet, reported on May 15, just days after a U.S.-China trade truce, that three leading Chinese rare earth magnet companies have received export licenses from the commerce ministry to ship to North America and Europe.

What’s concerning for international business is that there are barely any alternatives to China for obtaining the rare earths. Mines can take years to get operating approval, while processing plants also take time and expertise to establish.

“Today, China controls over 90% of the global refined supply for the four magnet rare earth elements (Nd, Pr, Dy, Tb), which are used to make permanent magnets for EV motors,” the International Energy Agency said in a statement. That refers to neodymium, praseodymium, dysprosium and terbium.

Bernstein's Beveridge calls CATL "the TSMC of lithium-ion batteries"

For the less commonly used nickel metal hydride batteries in hybrid cars, the amount of rare earths goes up to 4.45 kilograms, or nearly 10 pounds, according to AlixPartners. That’s largely because that kind of battery uses 3.5 kilograms of lanthanum.

“I estimate that around 70% of the over 200 kilograms of minerals in an EV goes through China, but it varies by vehicle and manufacturer. It’s hard to put a definitive figure on it,” said Henry Sanderson, associate fellow at The Royal United Services Institute for Defence and Security.

Power projection

Large rocks containing chromite, is crushed into smaller bitesize chunks, before to goes through a process to refine and extract the ore that yields chromium, a vital component of stainless steel, at the Mughulkhil mine in Logar Province, Afghanistan.

Marcus Yam | Los Angeles Times | Getty Images

In the last two years, China has increased its control over a broader category of metals known as critical minerals. In the summer of 2023, China said it would restrict exports of gallium and germanium, both used in chipmaking. About a year later, it announced restrictions on antimony, used to strengthen other metals and a significant component in bullets, nuclear weapons production and lead-acid batteries.

The State Council, the country’s top executive body, in October released an entire policy for strengthening controls of exports, including minerals, that might have dual-use properties, or be used for military and civilian purposes.

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One restriction that caught many in the industry by surprise was on tungsten, a U.S.-designated critical mineral but not a rare earth. The extremely hard metal is used in weapons, cutting tools, semiconductors and car batteries.

China produced about 80% of the global tungsten supply in 2024, and the U.S. imports 27% of tungsten from China, data from the U.S. Geological Survey showed.

About 2 kilograms of tungsten is typically used in each electric car battery, said Michael Dornhofer, founder of metals consulting firm Independent Supply Business Partner. He pointed out that this tungsten is not able to return to the recycling chain for at least seven years, and its low levels of use might not even make it reusable.

“50% of the world’s tungsten is consumed by China, so they have business as usual,” Lewis Black, CEO of tungsten mining company Almonty, said in an interview last month. “It’s the other 40% that’s produced (in China) that comes into the West that doesn’t exist.”

He said when the company’s forthcoming tungsten mine in South Korea reopens this year, it would mean there would be enough non-China supply of the metal to satisfy U.S., Europe and South Korean needs for defense.

But for autos, medical and aerospace, “we just don’t have enough.”

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Stocks making the biggest moves midday: DJT, CRM, TSLA, AMC

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