More Market Predictions, Tesla Kills Their Model X & S Vehicles & Amazon's AI-Induced Layoffs

0:00Robert Croak:Public.com presents the Rich Habits Radar, a new Friday episode of the Rich Habits Podcast, where every Friday morning we're coming at you with the biggest headlines impacting you and your money. My name is Austin Hankwitz. I'm joined by my co-host Robert Croak in the three things sitting at the top of our Rich Habits Radar this week include meta entering into a$6 billion deal with Corning for some fiber optic cables, Amazon and Dow Chemical to lay off tens of thousands of employees because of AI and Tesla discontinuing their Model S and X vehicles. We also have an awesome interview with Katie Stockton, a regular on CNBC.

0:40Robert Croak:She's gracing us with her presence for this episode. So be sure to stick around for that as well as to the end where we talk a little bit more about how Southwest plans to quadruple their profits in 2026. Spoiler alert, it's because you're now paying to pick your seat when you fly Southwest. Robert, let's dig into our first story.

0:59Austin Hankwitz:That's right. The big headline this week, and I've been talking about it because it's from a Toledo company, Meta's$6 billion deal with Corning. Earlier this week, Meta struck a multi-billion dollar deal to buy fiber optic cables from Corning. This was, of course, done in efforts to build and scale Meta's data center network for their AI. Corning will supply Meta with their newest generation of optical fiber cable and connectivity hardware, specifically from U.S.-based companies.

1:29Robert Croak:Yeah, to meet this demand, Corning is planning to expand their manufacturing capacity in North Carolina, including a scale-up at their facility in Hickory. The partnership will boost their employment in the state by 20%, adding more than 5 ,000 new skilled workers to the mix.

1:46Austin Hankwitz:And according to the Corning earnings call that took place this week, the company is working on similar long-term agreements with other major customers. They're essentially taking the same approach they did with Apple for their iPhones and Apple Watch, the glass screens in Kentucky, and implementing it with their fiber optic for data centers, which is a very smart move. So, Austin, what does this mean for you and your money?

2:09Robert Croak:Yeah, so for everyone listening right now, this is a great example of picks in shovels as it relates to the rise of the data center. There's a lot of components that go into data centers and cornings fiber optic cables make up a large chunk of that share. As more and more data centers get built, more fiber optic will be needed. However, we all know the real bottleneck for these data centers aren't fiber optic or copper cables or anything like that. It's the energy powering these data centers, which is why we've seen bloom energy stock just skyrocket lately. And that trend will likely continue up and to the right for years to come.

2:45Austin Hankwitz:Yeah, 100 percent. We've been talking about energy for a while now and the importance of it as we continue to grow this data center sector. So I think that's a great call out on Bloom.

2:55Robert Croak:So let's jump to our second point today, which is Amazon and Dow Chemical laying off 20 ,000 employees because of artificial intelligence. Amazon said earlier this week they're cutting 16 ,000 corporate white collar jobs on top of the 14 ,000 jobs they cut back in October. For those of you trying to do the math, that's 30 ,000 jobs gone in the matter of three or four months here because of AI. Amazon CEO Andy Jassy shared in a company memo back in 2024, I believe, and the quote is, Generative AI is a once-in-a-lifetime technological change that is already altering how Amazon deals with consumers and other businesses and how it conducts its own operations.

3:42Robert Croak:I think that's a lot of corporate speak for y 'all getting laid off. AI is taking your job.

3:47Austin Hankwitz:Yeah, Austin, not just Amazon, but Dow Chemical as well. They announced they're cutting 4 ,500 employees as part of this cost-saving program that will lean in on artificial intelligence to increase productivity and bolster shareholder returns.

4:03Robert Croak:Yeah, I saw that Dow said they're embarking on a program called Transform to Outperform, which would deploy AI and automation to reduce expenses and catalyze growth and productivity to the tune of$2 billion of adjusted EBITDA every single year. So, Robert, what does this mean for you and your money?

4:21Austin Hankwitz:It means that as these major corporations become more and more efficient with AI, we expect to see more layoffs in the near future. And if you haven't already started training in AI and learned those specific skill sets, you need to get after it. Tactically speaking, these companies will become more profitable because of these efficiencies. So don't take a blind eye to their stocks as well. Even though you might be a little, you know, mad because they're doing these layoffs, it doesn't mean the stocks might not be a great thing to look at. And if your children, your nieces or nephews or anyone you care about is entering college right now and not sure where to study or what to do, physical labor jobs like nursing, electricians, plumbers, engineers are what they should focus on.

5:05Austin Hankwitz:Because we want to make sure by the time those 18-year-olds are 28 and blooming in their careers, they don't have one of these AIs taking their jobs because a vast majority of white-collar jobs will disappear in the next 5 to 10 years.

5:19Robert Croak:So, Robert, this brings us to our last story, which I think is the most interesting one, which is Tesla discontinuing their Model S and X vehicles. During the company's earnings call earlier this week, Elon Musk announced Tesla will no longer manufacture Model S or Model X vehicles, but instead use that factory space in California to begin manufacturing their Optimus robots. Elon's quote is this. It's time to basically bring the Model S and X programs to an end with an honorable discharge. We expect to wind down S and X production next quarter and convert that into an Optimus factory with the long-term goal of having 1 million units a year of Optimus robots in the current S and X space in Fremont, California.

6:06Robert Croak:This came after the company's EV sales fell by 16 % year over year, selling only 1.7 million vehicles during the last quarter of 2025.

6:15Austin Hankwitz:Interestingly enough, subscriptions of the company's full self-driving software increased by 38 % to 1.1 million people. This says a lot about where the company is focusing, as Musk stated that the company still plans to start the production of CyberCab, a fully autonomous two-seater with no steering wheel and no pedals. And there's already about 500 of them operating in the streets of Austin, Texas, as we speak. So, Austin, this is some crazy news. We've been talking about autonomous robots and humanoid robots and all of this for quite some time. What does this mean for you and your money?

6:51Robert Croak:I think this is a genius move by Elon because on one side, you can sell a electric vehicle for a flat fee with mid-teen margins attached to it. And you take that money one time, right? Whereas with a humanoid robot or something of that likes with Optimus, you see similar margins, call it mid-teens, maybe 20%, 30 % depending on demand. But you're able to charge an annual recurring fee to operate it. So at scale, talking about the million robots per year that are out and about now, this could be the tune of tens of billions of dollars more per year to Tesla's bottom line if they were able to successfully pull this off.

7:31Austin Hankwitz:So my takeaway is this. We remain bullish on Tesla long term because Elon's idea of one million Optimus units a year is very hard. But if someone is going to achieve that goal, we think the guy that builds rockets is the most likely candidate to pull it off. So we'll see where the numbers fall in the future. But we still remain bullish on Tesla.

7:53Robert Croak:As you guys might tell, I've got a different camera going on right now, maybe a little different microphone as well. I lost power and I keep losing power. Winter storm here in Nashville is kicking my butt. So we're going to actually just skip over a little bit of the ETF Central call out. Of course, go check out ETF Central, but we won't be able to share our screens and do the cool images and stuff and all the things we talk about on a weekly basis. But ETFcentral.com is an incredible place to go check out if you want to learn more about ETFs in general, themes, sectors, flows, shows performance everything as it relates to etfs go check out etfcentral.com major shout out to etfcentral and the new york stock exchange for powering and sponsoring the show 100 we love etf

8:36Austin Hankwitz:central and you really should go to the website poke around learn more they have a lot of cool things going on there and we appreciate them being a longtime sponsor of the show so let's get into

8:47Robert Croak:it as we alluded to earlier in this episode we are joined by katie stockton katie stockton is the founder and managing partner of Fairlead Strategies, an independent research firm and registered investment advisor. Fairlead specializes in technical analysis and disciplined rules-based investment strategies, including the Fairlead Tactical Sector ETF, T-A-C-K, which applies sector rotation and asset allocation techniques to help investors navigate evolving market conditions. And that is exactly what we are experiencing today in 2026. So Katie, welcome to the Rich Habits Radar. Thank you, Austin.

9:26It's good to be back with you guys.

9:28Robert Croak:We are super, super grateful. I think it's funny I showed you that I was going to, was it Fort Lauderdale? And I landed in the airport and on CNBC, right then and there at the airport was Katie Stockton doing her thing. And I had to take a photo and put it on X and all that stuff. You're all over the place, Katie. So we're grateful to have you here on the show. And I appreciate that. So we just shared our 2026 market predictions episode, like maybe three or four weeks ago now. And as part of that episode, we were talking about how we're going to see a little bit of sector rotation into small cap stocks, right?

10:02Robert Croak:Earnings, we're seeing some quasi quantitative easing. We're seeing the Fed cut interest rates, like an easing cycle there, right? So we thought that small caps would benefit in 2026, specifically the Russell 2000. So what is your take on that Russell 2000 prediction we shared? Well, I think it was very prussian. You guys presented it a few weeks ago, you said. So kudos to that very good call that you had. I mean, we've seen that really manifest itself in the market year to date in 2026. It's become very obvious now to everyone that there is a very significant rotation that's been underway. It became somewhat evident in Q4 when we saw the loss of relative strength behind large cap technology.

10:45When that happens, it occurs to the benefit of just about everything else because tech obviously has the biggest footprint in the S &P 500. When it underperforms, you start to see other sectors have their opportunity to outperform and also other segments of the markets like small cap. So we really saw that from the Russell 2000 index. And in December, it broke out from what we call a long-term cup and handle formation. And we have a chart to show it. It looks essentially like a big rounded basing phase followed by a shallow version of the same and then a breakout, in this case, to new all-time highs above what was a pretty significant resistance level.

11:27That breakout is something that serves as kind of a technical action item. When you see resistance removed from a chart that's a bullish development, typically, it doesn't mean you always see immediate upside. But when you do, it's an even stronger breakout. And that's, of course, what we've seen from the Russell 2000. So I would concur that there has been meaningful rotation and that it is something maybe not as explosively as in January, but beyond, you know, this month that we could see as more of a theme for 2026.

11:58Robert Croak:Yeah, and I think, too, what's really important people understand when it comes to some of the small cap stuff we're talking about, despite some crazy small cap performance with specific names, right? When I say small cap, I think like sub$2 billion in market cap. We saw some craziness happen in 2025. If it's biotech, if it's, you know, some quantum computing names, like there's a lot of small cap stuff that was happening last year. We're specifically talking about the Russell 2000, the index, right? which I just want to be clear here. That is the index, not these specific names. So like there could be specifics, names that don't do well at all in 2026, but still be considered a small cap.

12:34Robert Croak:But we're specifically talking about the entirety, right, of small caps in general with the Russell 2000. So I just want to make sure that's really, really clear to our audience here. Yeah, that makes a lot of sense. From a bottom-up perspective, they can look very, very different. They certainly can.

12:49Austin Hankwitz:For sure. I am so excited because I've been beating the table for a few years now, telling people to diversify in precious metals. And we've seen a historic run up in the last, let's call it 12, 14 months with gold, silver, and now copper as well. How are you thinking about this price action? And is it sustainable in 2026? I would say it's probably the most common question that I'm getting these days. And it wasn't really the case six months ago. We've been pretty constructive on gold, though, over the long term. We've owned it in our ETF for more than a year now. And we feel that it's just a bull cycle.

13:26And it's been very persistent. It's had the support of positive momentum. And for now, it's right across all timeframes, right? Short term metrics, intermediate term metrics, long term metrics, all still point higher. But naturally, with the steepness of the rally that we've seen in gold, silver, especially, people are wondering, is this overdone? And when you have that steep kind of up move, it's tough because you're not really well served to wait for a breakdown to sell, which a breakdown is always a risk metric that we watch. So rather, we have to use other tools to understand when it's time to reduce.

14:03And for us, that could mean something like an indicator, an overbought, oversold indicator, flashing a sell signal, and then maybe a little downtake. Today, I think we actually have an outside down day in gold. That means when you have a wide swing, high to low spread for the day, and then it closes lower, that's sometimes a short-term setback. Things of that nature that would serve as weight of the evidence that it's done going up. But we just don't have that yet, not on a collective basis within precious metals and extend that to base metals as well, like copper. So we feel we want to hold these uptrends while they're still working.

14:40And once we see some real deterioration and indicators, that would warrant some reduction in exposure or taking profits for most people. For copper, it's a newer breakout than we've had in gold or silver. So when you have a breakout, that serves as a positive catalyst. So perhaps copper is a bit more interesting as one to add to.

15:02Robert Croak:And Katie, this is probably a good time to mention, you mentioned the TAC ETF. It's been around for years. Actually, it was one of the first cool ETFs that I've really gotten a part of. I mean, we started talking about it back in 2022. I think it was maybe 2023. But regardless, with the TAC ETF, you mentioned how you've had gold in there for the last 12 or 18 months. Can you maybe explain a little bit how the TAC ETF works and how you are picking and choosing what sectors of the S &P that you are adding or subtracting to the ETF? I got it shared up on screen here so the audience can take a look.

15:33Great. Thanks, Austin. Yeah. So at its essence, It's a sector rotation fund investing in the S &P 500 economic sectors. And we have sort of a pie that's broken into eight equal weight pieces. And we will ideally in a very strong tape have all of those pieces of the pie in various sectors, the sectors that have the best momentum and the best relative performance versus the broader market. When the tape weakens like it did do in Q4, we will see some kind of shift. And it's a very dynamic fund. It sort of puts the active and the active ETF theme there. It's very dynamic reacting to long-term momentum inputs.

16:14And we did see a position or two on the sector front get kicked out. And when that happens, we will replace it with a combination of asset classes that we feel are usually doing better than the equity market in a weaker equity market environment. And that, of course, includes gold. So we've defaulted into a gold position that's been pretty substantial, around 8%, 9 % of the fund at various times. And with that, we've been able to benefit from something that we considered almost a safe haven input. And historically, it has certainly acted that way, but incredibly additive to the portfolio in 2025.

16:54So we're very glad to have held it as long as we have had. And it's been more a function of the weaker equity tape at different times. But that defaulted position has worked really very well for us. We also use short-term treasuries and long-term treasuries for that other alternative exposure. Now, with the equal weight sector strategy, that's sort of an environmental strategy that would do well, in my opinion, in a year like we've seen start, right, in 2026. So the start of 2026 has been beneficial to equal weight strategies like TAC because you've seen that tech sector underperformance. And now, of course, we have earnings.

17:35So it's getting a little mishmash in here. But that has allowed other sectors and other market cap sort of categories emerge as relative performers. So that means that equal weight strategies might, in general, be more interesting in 2026, unless you feel like we're going to see yet another passive cycle year that favors the mega caps. But what I've noticed is that in the mega cap complex, it doesn't seem to me like they're being treated as a group anymore, but rather as individual companies, which is probably how it should be. You know, I think today or, you know, with earnings having hit the tape from the likes of Meta and Microsoft, and they are acting totally oppositely in their response, that does show that there's dispersion that really just wasn't there for a long time.

18:22So I think that's in a way healthy and certainly reflects a different kind of tape than we had in much of 25 and 24.

18:29Robert Croak:I completely agree with you. And just to make sure we're on the same page for everyone listening, how the TAC ETF works is using price action, moving averages. You had mentioned sort of these like buy and sell signals. You're a CMT. So like, this is what you do. You are a technical analysis wizard is what I like to call you. So you do this stuff. You're very, very good at it. And what you're saying is every single sector of the S &P, if it's doing well, you add it to the TAC ETF. If it's not doing well, you take it out of the TAC ETF. And so it's like always kind of being in a position where this ETF is invested in the things that are doing well as sectors of the S &P and not as sectors that aren't, right?

19:06Robert Croak:So like during times of economic prosperity, healthcare, historically speaking, right, does not do well, where during times of economic turmoil, healthcare does do well. And you're looking over here, okay, we've got some healthcare and the tax. We're looking at that, right? That's a new ad. And so healthcare having been added recently is a testament to our conversation and that it's a changed environment of late. And we actually expect a couple of sectors that haven't been represented recently to surface soon in tax. So we're really seeing some sector rotation in the charts, which is what we use as our primary discipline.