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Good morning.

Just what the robot ordered.

In a small study recently published in JAMA Journal, researchers found that ChatGPT proved surprisingly effective in correctly diagnosing illnesses and ailments. In fact, ChatGPT-4 correctly diagnosed patients 90% of the time, besting the 74% accuracy rate of doctors operating without the chatbot, and even beating the 76% accuracy rate of doctors who were assisted by ChatGPT. The obvious lesson here? Choose your human doctors well, at least so long as they are still around.

Autos

Tesla Rides Higher on Self-Driving Regulation Report

Photo of a Tesla car driving
Photo by Moritz Kindler via Unsplash

The Trump trade might have settled down at the end of last week, but Tesla keeps on truckin’.

Tesla’s stock popped almost 6% on Monday following a Bloomberg report that Donald Trump’s transition team is planning to make an overhaul of self-driving automobile regulation a top priority once he re-enters the White House. Specifically and unsurprisingly, that means a big loosening of the rules around cars that can operate without human drivers.

Cruise Control 

Although Trump himself has reportedly expressed a certain unease about self-driving cars in the past, this wouldn’t be the first time he’s paved the way for more autonomous driving tech. In 2017, the first Trump administration dropped Obama-era rules policing the technology, and on his way out the door in 2021, the administration exempted self-driving cars from a handful of crash standards.

Now, sources told Bloomberg, the incoming Trump administration is hunting for people to quickly assemble a new regulatory framework. The news sent Tesla’s stock up, thanks to Trump’s ongoing alliance with CEO Elon Musk, who has linked the company’s future to its ability to bring a robotaxi service to market:

  • Tesla’s stock has continued to rise even as the broader Trump Trade has gently deflated. By Friday, US markets had slumped to pre-election levels. The downturn was partly due to Trump’s nomination of noted vaccine skeptic Robert F Kennedy Jr. as health secretary, which hit Big Pharma stocks with a bear-dumping, whale-decapitating force.
  • Other companies with big investments in the future of self-driving cars didn’t fare as well as Tesla on Monday. Uber and Lyft shares both dropped around 5%. Google parent Alphabet’s stock did tick up, but only 1.7% despite its well-established robotaxi wing Waymo. It seems for the moment, the markets value Musk’s bromance with Trump above all else.

Trust Issues: A major obstacle for getting self-driving tech on the road is building public trust, which will happen only when autonomous cars stop hitting actual obstacles on the roadways. Submitting a false report about a crash won’t help anybody’s cause, but that’s exactly what General Motors admitted to doing last week. The company conceded that it failed to disclose key details about a 2023 crash in San Francisco where a self-driving car from GM’s automated driving unit Cruise struck a pedestrian and dragged her 20 feet down the road, the US Department of Justice said. GM will pay a $500,000 criminal fine as a result, plus it’ll have to open its doors to investigations and submit yearly reports to the US Attorney’s Office.

Written by Isobel Asher Hamilton
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Markets

BlackRock Strikes Deal With Banks to Provide Closely Held Bond Price Data

Corporations have issued enough investment grade US bonds this year to break four monthly issuance records. But, if you wanted real-time prices for one of these coveted assets, you might still have to get a financial advisor to call up a broker-dealer bank as if it were 1984.

On Monday, a handful of banks reportedly took a step to bring the closely guarded pricing data into the 21st century, inking a deal to make it available through BlackRock’s investment software Aladdin. Like it’s 2024.

You Can Quote Me On That

Corporate bonds, issued by companies to raise capital, have higher yields than government bonds, making them an attractive investment (caveat emptor: with those higher yields comes higher risk). But, while a few are traded on exchanges or digital platforms, most are still handled over-the-counter (OTC) between large broker-dealers.

This has proved a disincentive to modernize or open up to digital, real-time data transparency — banks and dealers consider pricing data a competitive advantage, so they shield it. Regulators have called for more openness and Blackrock’s deal will mark a shift in that direction. More than three dozen dealers will offer licensed, attributed quotes for investment-grade and high-yield US bonds through BondCliQ, a corporate bond quote system. Among them, Bloomberg News reported, are Bank of America, Morgan Stanley, and JPMorgan Chase. It comes as corporate bonds are having a burner year:

  • Corporations issued more than $1.4 trillion in investment-grade US bonds as of September 28, which is on track for the second-busiest year ever, according to Goldman Sachs.
  • One key driver has been mergers and acquisitions: Goldman noted US investment-grade bond sales tied to corporate M&A are on pace to be the highest since 2019. “We feel that a resurgence in M&A activity is integral to the issuance of more corporate bonds supporting M&A deals,” wrote Breckinridge Capital Advisors, noting a 25% year-over-year increase in M&A during the third quarter.

It’s Grow Time: More interest rate cuts and US economic growth would help the trend, said Goldman’s Investment Grade Syndicate head John Sales: “You’re seeing growth in the economy. You’re seeing growth in corporate America. You’re seeing growth of the balance sheet. And as companies grow, they issue debt to finance that growth.”

Written by Sean Craig
Industries

Spirit Airlines Finally Files for Chapter 11 Bankruptcy

Spirit Airlines, as Norman Greenbaum sang in his 1969 classic, may soon be “goin’ up to the spirit in the sky.”

On Monday, the budget airline and sworn enemy of widely accepted standards or necessary legroom filed for Chapter 11 bankruptcy. 

Clipped Wings

For decades, Spirit Airlines filled a necessary niche in the airline market, offering budget-conscious consumers a cost-friendly option. In other words, it won the race to the bottom in creature comforts. But both budget rivals and big airlines have recently narrowed the price gap (without sacrificing what remains of airplane amenities, like, say, a cup of water).

The company hasn’t reported an annual profit since 2019, and has lost some $2.2 billion since 2020. In recent years, antitrust regulators have dashed merger dreams with both Frontier Airlines and JetBlue over fears of decreased competition in the budget-airline space — all as Spirit warned that it would sooner or later fail on its own. On Monday:

  • Spirit said in a statement that it has reached a restructuring agreement supported by a supermajority of its bondholders, who have provided commitments for a $350 million equity investment, a $300 million loan to finance bankruptcy proceedings, and will swap some $800 million of their holdings into equity in a reorganized Spirit.
  • The company had been operating with a debt load of around $3.6 billion. With the proposed bankruptcy plan, it says that would reduce by around $795 million, according to court papers. Its stock has been delisted from the New York Stock Exchange.

Join the Club: Airline bankruptcies used to be slightly more common. In the 1990s and early 2000s, PanAm, Continental, United, and others declared bankruptcy — a death knell for some, a new beginning for others. In 2013, American Airlines emerged from bankruptcy while merging with US Airways. What’s next for Spirit is unclear as the antitrust environment begins to shift, but in a letter to passengers Monday — 10 days ahead of Thanksgiving — the company promised to continue operations. Just don’t forget to pack your own water.

Written by Brian Boyle

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