US House of Representative, Mr Kevin McCarthy said with confidence that the US government will be able to avert a shutdown (see below).
Is there a possibility that Wall Street believed 100% of what the Speaker of the House had mentioned and rally to end the day marginally higher? LOL!
By the time market closed for the day:
$DJIA(.DJI)$ : +0.35% (+116.07 to 33,666.34).
$S&P 500(.SPX)$ : +0.59% (+25.19 to 4,299.70).
$NASDAQ(.IXIC)$ : +0.83% (+108.43 to 13,201.28).
If you asked me, I do not for a minute believed this. Nah!
Wall Street took a leap of faith because of the following official reports released yesterday:
US Q2 2023 Gross Domestic Product (GDP) - Third estimates.
US Weekly jobless claims for week ending 23 Sep 2023.
US Gross Domestic Product’s (GDP) 3rd estimates for Q2 2023 came in at 2.1%.
This is the same as the 2nd estimates, released on 30 Aug 2023.
It is -0.3% lower than original estimate of 2.4%, released on 27 Jul 2023.
It indicates that the US economy is still “healthy”; despite elevated interest rate.
US weekly jobless claims for week ending 23 Sep 2023 was 204,000.
This is -5.12% lower than market expectations of 215,000.
This is +0.99%% higher than last last week’s 202,000.
Inference from data shows that US labour market is still relatively “tight”.
Definitely not exhibiting any signs of “recession” per se, if you asked me.
The Wall Street adage of “Buy the rumours, Sell the news” seems to be applicable to $NIO Inc.(NIO)$ for now (see above).
Several rumours about Nio & $Mercedes Benz Group AG(MBGYY)$ have been making its rounds in the rumour mills, first in May 2023, then 13 Jun 2023 and 4 Aug 2023.
Personally, I think there is a lot of synergy if the collaboration materializes between legacy automakers and the new but strong Chinese EV players.
The former need to shortcut their EV learning curve, that is unlike traditional car making.
The latter seeks:
Fundings for the high startup costs, R&D etc..
Survival in a consolidating domestic EV industry by leveraging on their innovations.
Tie-ups that may come in handy when navigating possible EU trade barriers.
It does not help that EU bloc is already seeking to investigate into “possible” anti-dumping acts by Chinese EV makers.
Any Internal Combustion Engine (ICE) CEO with commonsense only need to look at the collaboration between Volkswagen and XPeng to know the mutual benefits both companies stand to gain.
Actually, this form of collaboration is nothing new. The Chinese EV makers are following a playbook from $Tesla Motors(TSLA)$ when the EV industry leader was struggling to ramp up production.
Elon Musk has credited a $50 Million investment from the Mercedes group with saving Tesla in 2009.
Resistance facing Mercedes internally seems to be about the brand’s image as a result of the collaboration.
I think it is more of a selfish & protectionist act by Mercedes’s EV department in a bid to “save” its current work force that consists of many different types of workers.
Shortsighted & Conservative act in a rapidly evolving EV landscape.
In case you are interested, my other “PICK” posts. Enjoy:
Not all Energy stocks are equal. Read & decide. Click here! to read & give a “like” ok. Thanks.
Time to invest in Amazon? Read & discuss. Click here! to read.
Is JP Morgan right about oil @ $150 this time? Click here! to read.
Do you think US market will end September 2023 on a high note?
Do you think the collaboration between NIO and Mercedes makes business sense?
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