To The Moon

US market - past week performances

US market - YTD performances

It is with great “panache” that the US market exited H1 2023 (see above).

Looking back, the US market has “done” well, weathering through some storms that were unprecedented.

In Summary - Past Week & YTD performances are:

• DJIA: +2.01% / +3.80%

• SP 500: +2.43% / +15.91%

• Nasdaq: +2.37% / +31.73%

Heading into H2 2023’s first trading day, what are the factor/s that will & will not influence this week’s market direction?

(1) US Independence Day Euphoria - (Will)!

As the US gears up for the 4th July celebration, the euphoria surrounding the “birth” of American independence cannot be underestimated.

Coupled with how “well” the US market has performed in the past weeks, I think the US market will continue to end on a “high” note on Mon, 03 Jul, despite it being a half-day trading session.

(2) Companies Quarterly Earnings Report.- Will Not!

Although there are many companies reporting their quarterly earnings this week (03 Jul - 07 Jul), they are not the “popular” companies from the following sectors:

• Consumer Discretionary.

• Consumer Staples.

• Energy.

• Financials.

• Health Care.

• Information Technology.

• Telecommunication Services.

• Utilities.

This week’s quarterly earnings will not be a catalyst that would be at play in the US market.

(3) US Official Data - Will.

Personally, I think official data will determine market’s behaviour this week.

They will provide “latest” insight into the US economy. Whether it:

• Remains inflationary.

• Slips into recession.

• Achieves the much lauded “soft landing”.

Data I Refer To:

• Mon, 3 Jul - ISM manufacturing index.

• Wed, 5 Jul - ADP national employment report. Private sector employment data.

• Thu, 6 Jul - Jobs opening and Labour turnover survey (JOLTs).

• Thu, 6 Jul - US weekly jobless claims.

• Fri, 7 Jul - Jobs and unemployment.

In addition, on Wed, 5 Jul - will also see the Fed’s June 13-14, 2023 FOMC minutes of meeting released; providing a glimpse into (a) how & (b) why the Fed decided to pause interest rate in June, 2023.

Although it is going to be a short trading week, let’s just get through it first before we look further along into the following week.

On a separate note, like other EV makers $Tesla Motors(TSLA)$ has just announced its June deliveries on Sunday “night” Singapore time.

Here is the skinny on what it has produced and delivered.

(1) Total Production.

• Q2 2022: 258,580 EVs.

• Q1 2023: 440,808 EVs.

• Q2 2023 : 479,700 EVs

• It is +85.51% gain (YoY) and +8.82% gain from Q1 2023.

(2) Total Deliveries.

• Q2 2022: 254,695 EVs.

• Q1 2023: 422,875 EVs.

• Q2 2023: 466,140 EVs vs Wall Street expectation of 445,924 EVs.

• It is +83.01% gain (YoY) and +10.23% gain from Q1 2023.

• Current deliveries are +4.53% above Wall Street estimates.

• Unfortunately, Tesla does not break out its deliveries by (a) EV model and (b) Region.

• Why the “shrouded” secrecy, nobody knows.

(3) Anything Else?

• Concerns over Tesla’s profit margin remains.

• In part due to “steep” discounts, Tesla has been offering (on & off) to its EVs (Model 3, Model Y & Model X, inside and out of China.

• As a matter of fact, approx. 96% of Tesla’s reported Q2 2023 deliveries, consists of (a) Model Y and (b) Model 3.

It is very likely that profit margin will be “affected” in the latest earnings report.

Having said that, the YoY “+83%” delivery volume should “mitigate” to some extent, the eroded margins.

Will Tesla Continue To Rally Today?

Tesla's futures price for Mon, 03 Jul 2023

Looking at its pre-market indicators for 03 Jul 2023 (see above), the stars are “aligned”.

• However, do not forget that funds house like $ARK Innovation ETF(ARKK)$ is “selling” Tesla shares to lock in profits (see below).

• Need to internalize, whether it is time to take profit or do nothing?

When a stock remains in the trading account, the “paper” gain or loss is only an indication. Only when one cashes out, then will it be “realized” gain or loss. Something that is “certain”.

• Do you think US market will continue to rally today?

• Do you think that Tesla will continue to rally today, like I do?

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