Weekly Issue: Key Developments at Apple (AAPL) and AT&T (T)

Weekly Issue: Key Developments at Apple (AAPL) and AT&T (T)

Key points inside this issue:

  •  Apple’s 2019 iPhone event – more meh than wow
  •  GameStop – It’s only going to get worse
  •  Elliot Management gets active in AT&T, but its prefers Verizon?
  •  California approves a bill that changes how contract workers are treated
  • Volkswagen set to disrupt the electric vehicle market

I’m going to deviate from the usual format we’ve been using here at Tematica Investing this week to focus on some of what’s happening with Select List residents Apple (AAPL) and AT&T (T) this week as well as one or two other things. The reason is the developments at both companies have a few layers to them, and I wanted to take the space to discuss them in greater detail. Don’t worry, we’ll be back to our standard format next week and I should be sharing some thoughts on Farfetch (FTCH), which sits at the crossroads of our Living the Life, Middle Class Squeeze and Digital Lifestyle investing themes, and another company I’ve been scrutinizing with our thematic lens. 

 

Apple’s 2019 iPhone event – more meh than wow

Yesterday, Apple (AAPL) held its now annual iPhone-centric event, at which it unveiled its newest smartphone model as well as other “new”, or more to the point, upgraded hardware. In that regard, Apple did not disappoint, but the bottom line is the company delivered on expectations serving up new models of the iPhone, Apple Watch and iPad, but with only incremental technical advancements. 

Was there anything that is likely to make the average users, not the early adopter, upgrade today because they simply have to “have it”? 

Not in my view. 

What Apple did do with these latest devices and price cuts on older models that it will keep in play was round out price points in its active device portfolio. To me, that says CEO Tim Cook and his team got the message following the introduction of the iPhone XS and iPhone XS Max last year, each of which sported price tags of over $1,000. This year, a consumer can scoop up an iPhone 8 for as low as $499 or pay more than $1,000 for the new iPhone 11 Pro that sports a new camera system and some other incremental whizbangs. The same goes with Apple Watch – while Apple debuted a new Series 5 model yesterday, it is keeping the Series 3 in the lineup and dropped its price point to $199. That has the potential to wreak havoc on fitness trackers and other smartwatch businesses at companies like Garmin (GRMN) and Fitbit (FIT)

Before moving on, I will point out the expanded product price points could make judging Apple’s product mix revenue from quarter to quarter more of a challenge, especially since Apple is now sharing information on these devices in a more limited fashion. This could mean Apple has a greater chance of surprising on revenue, both to the upside as well as the downside. Despite Apple’s progress in growing its Services business, as well its other non-iPhone businesses, iPhone still accounted for 48% of June 2019 quarterly revenue. 

Those weren’t the only two companies to feel the pinch of the Apple event. Another was Netflix (NFLX) as Apple joined Select List resident Walt Disney (DIS) in undercutting Netflix’s monthly subscription rate. In case you missed it, Disney’s starter package for its video streaming service came in at $6.99 per month. Apple undercut that with a $4.99 a month price point for its forthcoming AppleTV+ service, plus one year free with a new device purchase. To be fair, out of the gate Apple’s content library will be rather thin in comparison to Disney and Netflix, but it does have the balance sheet to grow its library in the coming quarters. 

Apple also announced that its game subscription service, Apple Arcade, will launch on September 19 with a $4.99 per month price point. Others, such as Microsoft (MSFT) and Alphabet (GOOGL) are targeting game subscription services as well, but with Apple’s install base of devices and the adoption of mobile gaming, Apple Arcade could surprise to the upside. 

To me, the combination of Apple Arcade and these other game services are another nail in the coffin for GameStop (GME)

 

GameStop – It’s only going to get worse

I’ve been bearish on GameStop (GME) for some time, but even I didn’t think it could get this ugly, this fast. After the close last night, GameStop reported its latest quarter results that saw EPS miss expectations by $0.10 per share, a miss on revenues, guidance on its outlook below consensus, and a cut to its same-store comps guidance. The company also shared the core tenets of a new strategic plan. 

Nearly all of its speaks for itself except for the strategic plan. Those key tenets are:

  • Optimize the core business by improving efficiency and effectiveness across the organization, including cost restructuring, inventory management optimization, adding and growing high margin product categories, and rationalizing the global store base. 
  • Create the social and cultural hub of gaming across the GameStop platform by testing and improving existing core assets including the store experience, knowledgeable associates and the PowerUp Rewards loyalty program. 
  • Build digital capabilities, including the recent relaunch of GameStop.com.
  •  Transform vendor and partner relationships to unlock additional high-margin revenue streams and optimize the lifetime value of every customer.

Granted, this is a cursory review, but based on what I’ve seen I am utterly unconvinced that GameStop can turn this boat around. The company faces headwinds associated with our Digital Lifestyle investing theme that are only going to grow stronger as gaming services from Apple, Microsoft and Alphabet come to market and offer the ability to game anywhere, anytime. To me, it’s very much like the slow sinking ship that was Barnes & Noble (BKS) that tried several different strategies to bail water out. 

Did GameStop have its time in the sun? Sure it did, but so did Blockbuster Video and we all know how that ended. Odds are it will be Game Over for GameStop before too long.

Getting back to Apple, now we wait for September 20 when all the new iPhone models begin shipping. Wall Street get your spreadsheets ready!

 

Elliot Management gets active in AT&T, but its prefers Verizon?

Earlier this week, we learned that activist investor Elliot Management Corp. took a position in AT&T (T). At $3.2 billion, we can safely say it is a large position. Following that investment, Elliot sent a 24-page letter telling AT&T that it needed to change to bolster its share price. Elliot’s price target for T shares? $60. I’ll come back to that in a bit. 

Soon thereafter, many media outlets from The New York Times to The Wall Street Journal ran articles covering that 24-page letter, which at one point suggested AT&T be more like Verizon (VZ) and focus on building out its 5G network and cut costs. While I agree with Elliot that those should be focus points for AT&T, and that AT&T should benefit from its spectrum holdings as well as being the provider of the federally backed FirstNet communications system for emergency responders, I disagree with its criticism of the company’s media play. 

Plain and simple, people vote with their feet for quality content. We’ve seen this at the movie box office, TV ratings, and at streaming services like Netflix (NFLX) when it debuted House of Cards or Stranger Things, and Hulu with the Handmaiden’s Tale. I’ve long since argued that AT&T has taken a page out of others’ playbook and sought to surround its mobile business with content, and yes that mobile business is increasingly the platform of choice for consuming streaming video content. By effectively forming a proprietary content moat around its business, the company can shore up its competitive position and expand its business offering rather than having its mobile service compete largely on price. And this isn’t a new strategy – we saw Comcast (CMCSA) do it rather well when it swallowed NBC Universal to take on Walt Disney and others. 

Let’s also remember that following the acquisiton of Time Warner, AT&T is poised to follow Walt Disney, Apple and others into the streaming video service market next year. Unlike Apple, AT&T’s Warner Media brings a rich and growing content library but similar to Apple, AT&T has an existing service to which it can bundle its streaming service. AT&T may be arriving later to the party than Apple and Disney, but its effort should not be underestimated, nor should the impact of that business on how investors will come to think about valuing T shares. The recent valuation shift in Disney thanks to Disney+ is a great example and odds are we will see something similar at Apple before too long with Apple Arcade and AppleTV+. These changes will help inform us as to how that AT&T re-think could play out as it comes to straddle the line between being a Digital Infrastructure and Digital Lifestyle company.

Yes Verizon may have a leg up on AT&T when it comes to the current state of its 5G network, but as we heard from specialty contractor Dycom Industries (DY), it is seeing a significant uptick in 5G related construction and its top two customers are AT& T (23% of first half 2019 revenue) followed by Verizon (22%). But when these two companies along with Sprint (S), T-Mobile USA (TMUS) and other players have their 5G network buildout competed, how will Verizon ward off subscriber poachers that are offering compelling monthly rates? 

And for what it’s worth, I’m sure Elliot Management is loving the current dividend yield had with T shares. Granted its $60 price target implies a yield more like 3.4%, but I’d be happy to get that yield if it means a 60% pop in T shares. 

 

California approves a bill that changes how contract workers are treated

California has long been a trend setter, but if you’re an investor in Uber (UBER) or Lyft (LYFT) — two companies riding our Disruptive Innovators theme — that latest bout of trend setting could become a problem. Yesterday, California lawmakers have approved Assembly Bill 5, a bill that requires companies like Uber, Lyft and DoorDash to treat contract workers as employees. 

This is one of those times that our thematic lens is being tilted a tad to focus on a regulatory change that will entitle gig workers to protections like a minimum wage and unemployment benefits, which will drive costs at the companies higher. It’s being estimated that on-demand companies like Uber and the delivery service DoorDash will see their costs rise 20%-30% when they rely on employees rather than contractors. For Uber and Lyft, that likely means pushing out their respective timetables to profitability.

We’ll have to see if other states follow California’s lead and adopt a similar change. A coalition of labor groups is pushing similar legislation in New York, and bills in Washington State and Oregon could see renewed momentum. The more states that do, the larger the profit revisions to the downside to be had. 

 

Volkswagen set to disrupt the electric vehicle market

It was recently reported that Volkswagen (VWAGY) has hit a new milestone in reducing battery costs for its electric vehicles, as it now pays less than $100 per KWh for its batteries. Given the battery pack is the most expensive part of an electric vehicle, this has been thought to be a tipping point for mass adoption of electric vehicles. 

Soon after that report, Volkswagen rolled out the final version of its first affordable long-range electric car, the ID.3, at the 2019 Frankfurt Motor Show and is expected to be available in mid-2020.  By affordable, Volkswagen means “under €30,000” (about $33,180, currently) and the ID.3 will come in three variants that offer between roughly 205 and 340 miles of range. 

By all accounts, the ID.3 will be a vehicle to watch as it is the first one being built on the company’s new modular all-electric platform that is expected to be the basis for dozens more cars and SUVs in the coming years as Volkswagen Group’s pushed hard into electric vehicles. 

Many, including myself, have been waiting for the competitive landscape in the electric vehicle market to heat up considerably – it’s no secret that all the major auto OEMs are targeting the market. Between this fall in battery cost and the price point for Volkswagen’s ID.3, it appears that the change in the landscape is finally approaching and it’s likely to bring more competitive pressures for Clean Living company and Cleaner  Living Index constituent Tesla (TSLA)

 

Bad news for Tesla, auto OEMs killing hybrids to focus on EVs

Bad news for Tesla, auto OEMs killing hybrids to focus on EVs

At the heart of our investment themes here at Tematica we tend to find a structural change underway. There are several embodied by our Cleaner Living investing theme with one of the more recognizable happening in the auto market as consumers look for non-gas powered solutions. This began with hybrid models, which in hindsight were a baby step or two away from all-gas powered engines that allowed them to meet regulatory mandates. We are, however, seeing an acceleration in the shift toward electric vehicles (EVs) as both General Motors and Volkswagen close out their hybrid efforts to focus their formidable resources on the EV market.

As we can see below, GM in particular is looking to move in the EV market in a meaningful way over the next four years. As we’ve seen in our Digital Lifestyle investing theme with Netflix, a company can enjoy an early mover advantage for a period of time but as the market opportunity presents itself others, like Disney, Apple, Comcast and others, will look to tap into that growing market.

The same holds for Tesla, and the question investors will need to ponder is how it will fare in a far more competitive EV market? Legacy auto makers like GM, Volkswagen, Ford and others are well versed in the competitive auto market. This will be new ground and an new battle ground for Tesla and Elon Musk, and it doesn’t have a legacy car business to help it out.

Auto makers for two decades have leaned on hybrid vehicles to help them comply with regulations on fuel consumption and give customers greener options in the showroom. Now, two of the world’s largest car manufacturers say they see no future for hybrids in their U.S. lineups.

General Motors Co. and Volkswagen AG are concentrating their investment on fully electric cars, viewing hybrids—which save fuel by combining a gasoline engine with an electric motor—as only a bridge to meeting tougher tailpipe-emissions requirements, particularly in China and Europe.

GM plans to launch 20 fully electric vehicles world-wide in the next four years, including plug-in models in the U.S. for the Chevy and Cadillac brands. Volkswagen has committed billions to producing more battery-powered models, including introducing a small plug-in SUV in the U.S. next year and an electric version of its minibus around 2022.

Last week, Continental AG, one of the world’s biggest car-parts makers, said it would cut investment in conventional engine parts because of a faster-than-expected fall in demand—yet another sign the industry is accelerating the shift to electric vehicles.

Source: GM, Volkswagen Say Goodbye to Hybrid Vehicles – WSJ

Auto companies spur Africa’s new middle class

Auto companies spur Africa’s new middle class

When most people talk about rising disposable incomes, the knee-jerk reaction tends to be one that involves China or India. While those are natural reactions and are key drivers for our Rise of the New Middle-class investing theme, we are seeing the same begin to unfold in Africa as auto companies invest for what they see as a vibrant market in the coming years. That compares to an auto market in the mature markets that is primarily driven by replacement demand and faces an uncertain volume future longer-term due to prospects associated with autonomous vehicles.

On the flipside, the investments in making North Africa a car manufacturing hub and the better-paying jobs that follow are helping speed the rise of the new middle-class in the region. That bodes well for companies ranging from Colgate Palmolive, Proctor & Gamble, Clorox and the other rising tailwinds associated with our Rise of the New Middle-class investing theme.

Auto manufacturers are betting on Africa as the next growth frontier, and they’re building a new production hub to power it.

In a rare industrialization success story for the continent, some of the largest car makers have been transforming North Africa into the world’s newest car-manufacturing cluster. Volkswagen AG , Renault SA, Peugeot SA, Hyundai Motor Co. and Toyota Motor Corp. have invested billions in Africa in recent years, drawn by growth prospects that maturer auto markets no longer offer. New-car sales in the U.S., China and Europe are ebbing after a bumper decade.

While still a small market, the Middle East and Africa are expected to have 90 million vehicles on the road by 2040, up from 59 million today, according to OPEC forecasts.

Foreign direct investment in North Africa rose from just under $5 billion in 2011 to $12 billion in 2016, largely driven by auto makers’ investment, according to Frost & Sullivan, an industry research group.

Source: Car Makers Turning North Africa Into Auto Hub – WSJ

Used-car sales poised to climb as new cars become even more expensive

Used-car sales poised to climb as new cars become even more expensive

Since the Great Recession, we’ve seen new auto sales rebound due in part to the attractive if not aggressive low to no interest financing. That’s helped mask the rising cost of buying a new car as original equipment manufacturers (OEMs) ranging from Ford and General Motors to Volkswagen and Honda have packed connective technology and features associated with our Digital Lifestyle investing theme their vehicles.

Over the last few quarters, the Federal Reserve has hiked interest rates and is poised to do some four more times in the coming 15 months according to its most recent economic forecast. At the margin, that will boost the cost of buying a new car or truck, and likely increase the demand for used cars for consumers that are seeing their discretionary dollars shrink as those same interest rates drive their existing debt servicing costs higher. Good news for companies like Carmax that can cater to Middle-class Squeeze consumers, not so good for the auto manufacturers.

 

Demand for used cars was unusually strong this summer and will remain at elevated levels through the year’s end as higher interest rates and rising prices on new cars continue to stretch buyers’ wallets, industry analysts said.

Used-car buyers are finding a growing selection of low-mileage vehicles that are only a few years old.

While used-car values have also increased in recent years, the gap between the price of a new and preowned car has also widened and is now at one of its largest points in more than a decade, according to car-shopping website Edmunds.com.

New-car prices have steadily climbed in the years following the recession as companies packed vehicles with more expensive technology and buyers shifted away from lower-priced cars to bigger and more expensive sport-utility vehicles and trucks. The average price paid for a car hit an all-time high of $36,848 in December of 2017 and remains at near-record levels, according to Edmunds.com.

With nearly 40 million in sales last year, the used-car market is more than double the size of the new-car business.

The shift in demand is a troubling sign for auto makers, which will be under pressure to deepen discounts to keep customers from defecting to the used-car market. New-vehicle sales have started to cool this year following a seven-year growth streak.

As new car prices have climbed, auto lenders have kept monthly payments low by extending loan-repayment terms to five and six years and introducing 0% financing on loans that made buying new a more attractive deal.

But as interest rates rise and credit tightens, auto companies are pulling back on such sales incentives. The average monthly payment on a new car was $536 in August, up from $507 last year and $463 five years ago, according to Edmunds.com.

Source: Used-Car Sales Boom as New Cars Get Too Pricey for Many – WSJ

A new digital key standard could finally put your car key inside your iPhone

A new digital key standard could finally put your car key inside your iPhone

We as a people have been carrying many things in our pockets when we leave the house – first keys and wallet then keys, wallet and phone. As part of our Cashless Consumption investment theme we have seen mobile wallets begin to proliferate as well as apps like Apple Pay and PayPal that likely mean at some point we won’t have to carry our physical wallets – if only someone can figure out a digital driver’s license.

Before too long it seems we may be able to ditch the car keys as well, which will naturally be incorporated into our smartphones. We’ve already seen smartphone apps that unlock and lock doors as well as garage doors, which to us means car doors are inevitable. Of course, as this happens it also means another avenue of potential theft that will be a part of our Safety & Security investing theme.

The Car Connectivity Consortium, which counts Apple among its charter members, on Wednesday announced the publication of new “digital key” standard that allows drivers to actuate vehicle systems like door locks and the engine via an NFC-enabled smartphone.

With its technology, aptly dubbed the Digital Key Release 1.0 specification, the CCC aims to bringautomotive manufacturers and mobile device makers together to create an interoperable digital key standard.

The system operates in much the same way as first-party digital keys currently available from a handful of vehicle OEMs. Users with authenticated smart devices are able to lock, unlock, start the engine of and share access to a specific car. Unlike some remote control solutions that leverage Wi-Fi or Bluetooth communications, however, Release 1.0 appears intrinsically tied to short-range technology like NFC.

Relying on existing Trusted Service Manager (TSM) infrastructure, Release 1.0 allows carmakers to securely transfer digital key information to a smart device like a smartphone, perfect for car-sharing or fleet deployments. Specialized hardware like near-field communications chips and internal secure elements provide a high level of user protection.

According to a white paper outlining the technology’s architecture, Release 1.0 looks to create standardized interfaces between a car, a smart device’s NFC and Bluetooth Low Energy stack, secure element, first-party app, TSM, OEM backend and SE provider. OEMs are responsible for proprietary interfaces between their respective backends and the car.

As noted by the group, which focuses on developing mobile device-to-vehicle connectivity solutions, a number of carmakers already field proprietary digital key solutions, though the market is fragmented. A single unifying standard would not only enhance the customer experience, but provide manufacturers access to the latest security protocols and technological advancements, the CCC argues.

CCC charter member Audi is already using digital key technology in its vehicles, while Volkswagen, another charter member, said it plans to integrate the technology soon. Alongside Audi and Volkswagen, Apple, BMW, General Motors, Hyundai, LG Electronics, Panasonic and Samsung are listed charter members of the organization, while core members include ALPS, Continental Automotive, DENSO, Gemalto, NXP and Qualcomm.

The CCC says it is already working on a Digital Key Release 2.0 that should be completed by the first quarter of 2019. The second-generation technology will provide a standardized authentication protocol between the vehicle and a paired smart device, and will be fully with interoperability between difference smartphones and cars.

Source: Apple wants to replace your car keys with an iPhone

Auto Sales Miss Again

Auto Sales Miss Again

While the mainstream financial media does its darndest to convince investors that the weak Q1 GDP was once again due to “seasonal” factors, the Cash-Strapped Consumer showed up again this morning as auto sales for April came in weaker than expected again, after a rough March.

With about 84 percent of the industry reporting at this point, the overall sales pace is tracking at 16.67mm SAAR versus expectations for 17.10mm. Here is the breakout by company:

  • Ford (F) down 7.2 percent yoy
  • Toyota (TM) down 4.4 percent yoy
  • General Motors (GM) down 5.8 percent yoy
  • Fiat-Chrysler (FCUA) down 6.6  percent yoy
  • Nissan (NSANY) down 1.5  percent yoy
  • Mercedes (DDAIY) down 7.9  percent yoy
  • Mazda (MZDAF) down 7.8 percent yoy
  • Honda (HMC) down 7.0  percent yoy
  • Volvo (VOLVF) up 15.4 percent yoy
  • Volkswagen (VW) up 1.6  percent yoy

With only two companies reporting better sales on a year-over-year basis, April was another rough month. We did see one slightly bright spot out of Ford (F) where overall sales of trucks were up 7.4 percent year-to-date over last year. These could be a barometer for the health of small businesses, which we’ve seen have been more optimistic of late on hopes for tax reform in their favor.

So far consumer income and overall spending have been disappointments, and now auto sales came in weaker than expected. That argument for “seasonal” weakness in Q1 isn’t looking too strong.

China’s Growing List of Billionaires Fuel our Emerging Ultra-Wealthy Investing Theme

China’s Growing List of Billionaires Fuel our Emerging Ultra-Wealthy Investing Theme

Ask most people and they will likely think that China is one of the key countries fueling the Rise part of our Rise & Fall of the Middle Class investing theme. Given the population size and rising disposable incomes that’s rather true, but digging into things most are surprised to find that China is also one of the key countries behind our soon to be announced Emerging Ultra Wealthy investing theme. Much the way we are seeing companies like Disney, Nike, Under Armour and Starbucks looking to ride the rising middle class in China, odds are companies like Ferrari, Volkswagen, LVMH Moet Hennessy Louis Vuitton SE and the like are or will be doing the same with China’s growing list of ultra-wealthy.

China is home to more self-made female billionaires than any other nation, according to Hurun Report. The Shanghai-based research firm marked International Women’s Day on March 8 by sharing its latest numbers. It counts 88 such billionaires in the world, and says China has 56 of them.

Other findings from Hurun include:

  • 2257 BILLIONAIRES IN WORLD, UP 69 ON LAST YEAR; UP 55% OR 804 OVER LAST 5 YEARS.
  • CHINESE BILLIONAIRES PULL AWAY FROM USA, 609 TO 552, UP 41 AND 17 RESPECTIVELY.
  • 652 BILLIONAIRES OF CHINESE ORIGIN, OR 29% OF HURUN LIST. CHINESE MAKE UP 20% OF WORLD POPULATION.

Source: No country comes even close to China in self-made female billionaires — Quartz

Hyundai The First To Embrace Amazon’s Alexa? 

Hyundai The First To Embrace Amazon’s Alexa? 

The Connected Car market lurched forward as Hyundai now offers the ability to use Amazon’s (AMZN) Alexa voice interface to control the car. Voice controls inside the car have been around for some time in products from the Honda Motor Company (HMC) and others, but the voice technology has made even Apple’s (AAPL) Siri look like a winner. Aside from Alexa’s high marks for understanding the user, it also brings the ability to send commands from other Alexa powered devices – imagine sending a shopping list to the car before you head out! While Hyundai is the first, we rather doubt this is an exclusive arrangement and odds are we will soon see similar announcements – Alexa powered or not – from the likes of Ford (F), General Motors (GM), Volkswagen (VLKAY) and other car manufacturers.

Hyundai’s luxury car division, Genesis, said Thursday that its currently available G80 and soon-to-be-available G90 will be the first cars to allow owners to control a number of the car’s functions using Alexa, the voice recognition program from Amazon.com Inc. (NASDAQ: AMZN).

To take advantage of the system, the car’s owner can issue commands to Amazon products like the Echo, Echo Dot and Tap that will then be transmitted to the car and executed. For example, an owner can say something like, “Alexa, tell Genesis to unlock my car,” and presto!

Source: Amazon’s Alexa Hits the Road With Hyundai – Amazon.com (NASDAQ:AMZN) – 24/7 Wall St.

First disappointing May auto sales, now Jamie Dimon sounds the alarm on auto loans 

First disappointing May auto sales, now Jamie Dimon sounds the alarm on auto loans 

While some see a booming auto market, there are reasons to be concerned as subprime loan volumes mount. Yes, those two dirty words are once again back in vogue, kicking up memories of the housing crisis and giving rise to thought the automotive market could be over inflated at best and at worst preparing for a pop. Following May sales declines at  Ford, GM, Volkswagen of America, Honda, Toyota and Nissan, Dimon’s comments are likely to question the vector and velocity of the domestic automotive market in the coming quarters.

 

Auto-loan balances surpassed $1 trillion in the first quarter, a record, growing 11% from the year-earlier period, according to credit reporting firm Experian. That is fueled by the growth in car sales in recent years as well as loosening underwriting standards that also have made it easier for subprime borrowers to get financing.

The volume of car loans held by subprime consumers increased by 11%, outpacing the 9% increase for prime customers, according to Experian.

“Auto is clearly a little stretched, in my opinion,” the JPMorgan Chase CEO said Thursday morning, speaking at the AllianceBernstein Strategic Decisions Conference in New York. “Someone is going to get hurt. … We don’t do much of that.”

Source: Jamie Dimon just sounded the alarm on auto loans