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Tesla shares surge on Elon Musk comments

 

Friday, December 30, 2022

The news shaping the markets today

Russia’s military forces fired over 100 missiles into Ukraine, targeting the country’s capital Kyiv and other regions. The news sent the safe-haven US dollar index higher this morning.


South Korea’s consumer inflation came in at 5% year-over-year in December, in-line with market expectations. The KRW/USD forex pair traded flat on the news.


Singapore’s bank loans fell to S$816.5 billion in November, from S$826.1 billion in the previous month. This being the smallest figure since December 2021 exerted pressure on the SGD/USD fore pair.


Argentina’s consumer confidence indicator climbed to 35.9 in December, from 35.1 a month ago. However, the ARS/USD pair remained almost flat in forex trading this morning.


The US Energy Information Administration said the crude oil stockpiled had risen by 0.718 million barrels in the week ended December 23, versus market estimates of a 1.52 million decline. US crude oil futures rose slightly this morning.

 

What’s happening: Shares of Tesla recorded gains on Thursday, following a commentary from CEO Elon Musk.

What happened: Musk told employees to ignore the “craziness” in the stock market.

One of the major analysts also reiterated an Overweight rating on the stock, which provided support to the EV maker’s share price.

Why it matters: Tesla’s shares have been under significant selling pressure over the past few trading days. The stock remained on a downward trajectory for seven straight sessions amid concerns around softening demand for EVs and Musk being distracted after acquiring Twitter.

Musk sent a company-wide email, urging employees to ramp up deliveries at the end of the quarter. The company has announced major discounts on its vehicles in the US and China.

Tesla had delivered 908,573 units until the end of the third quarter. To meet its long-term target of 50% growth, the EV maker should reach annual deliveries of at least 1.404 million vehicles.

He told employees to ignore stock market movements and added, “As we demonstrate continued excellent performance, the market will recognize that…Long-term, I believe very much that Tesla will be the most valuable company on Earth!”

Morgan Stanley analysts maintained an Overweight rating on Tesla, while cutting the price target from $330 to $250. The analyst believes Tesla is in position to extend its lead versus its EV peers.

How shares responded: Tesla’s shares gained 8.1% to close at $121.82 on Thursday. The stock has lost around 70% year-to-date.

What to watch: Traders will keep an eye on comments from Elon Musk regarding the company’s performance. Tesla is all set to report its delivery numbers for the fourth quarter next week, with analysts projecting a record tally of 435,000-450,000 units for the three-month period.

The company is expected to report detailed earnings results for the fourth quarter on January 25. Analysts expect adjusted earnings of $1.24 per share on revenues of $25.5 billion.

The markets today

The British pound will be in focus today ahead of UK’s housing prices data

Context: The GBP/USD forex pair traded higher on Thursday, amid a decline in the US dollar.

Details: The US dollar moved lower on Thursday, after recording gains in the prior session, as traders remained on edge at the end of 2022.

The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell around 0.6% to 103.84 on Thursday, after gaining around 0.2% in the prior session.

Traders also assessed the impact of China’s relaxation of its strict covid-19 restrictions. China announced relaxations for inbound travellers by removing its quarantine rule from January 8. However, countries like Japan, India and the US said covid-19 tests will be done for travellers arriving from China.

The GBP/USD forex pair added around 0.3% to reach 1.2055 on Thursday. London’s FTSE 100 gained 0.21% to close at 7,512.72, while the domestically focussed FTSE 250 index jumped 0.59% to 18,996.45.

What are expectations: Traders await the release of economic data on Nationwide house price index from the UK today. The index, which rose 4.4% year-over-year in November, is expected to increase 2.5% in December. However, the index in projected to show a 1% month-on-month decline in December, following a 1.4% decline in the previous month.

Other Markets: US indices closed higher on Thursday, with the Dow Jones index, S&P 500 and Nasdaq 100 up by 1.05%, 1.75% and 2.54%, respectively.

Support & resistances for today

Technical Levels News Sentiment
USD/JPY  – 132.47 and 132.65 Negative
USD/CAD – 1.3549 and 1.3555 Negative
Gold – 1822.61 and 1824.41 Positive
Silver   – 24.103 and 24.200 Positive
Dow Jones – 33201.77 and 33248.16 Positive

Market snapshot

Futures at 0400 (GMT)
EUR/USD (1.0661, -0.03%) Dow ($33,344, -0.09%) Brent ($83.54, 0.1%)
GBP/USD (1.2051, -0.03%) S&P500 ($3,866, -0.15%) WTI ($78.55, 0.2%)
USD/JPY (132.57, -0.35%) Nasdaq ($11,019, -0.13%) Gold ($1,824, -0.1%)

What else to watch today

Russia’s services PMI, composite PMI and money supply M2, South Africa’s money supply M3, balance of trade and private sector credit, Turkey’s balance of trade, Spain’s consumer price inflation and current account, India’s central government budget value, value of deposits, foreign exchange reserves, infrastructure output growth and value of loans, US Chicago PMI and Baker Hughes crude oil rigs, China’s current account as well as Argentina’s interest rate decision.


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