Tesla - sell in December. Buy back later ? Read & decide.
US market closed off November 2023 with a Bang!
At least 2 of 3 composite indexes did, anyway.
According to eToro US investment analyst Callie Cox — "It's one of the best months to be seen in the last decade".
By keeping Fed funds rate status quo for November 2023, the Fed has effectively encourage investors’ confidence in the face of declining inflation, as seen from monthly official report since the start of Q3 2023.
As per CME Fedwatch tool, markets are now pricing in a 92% chance of a rate cut by the end of the June 2024 meeting, up from a 60% chance a month ago. (see below)
By the time US market closed off November 2023:
DJIA: +1.47% (+520.47 to 35,950.89). Index’s new high in 2023, capping the month with a +8.9% gain.
S&P 500: +0.38% (+17.22 to 4,567.80). Closed the month up +8.9%.
Nasdaq: -0.23% (-32.27 to 14,226.22). Tech index gained +10.7%, it is index best monthly gains since July 2022. Would have been “stronger” had investors not take profit on the tech stocks.
By now, everyone would have realized that the main catalyst for market yesterday’s rally was attributed to US’s Core PCE (personal consumption expenditure) data for October 2023. (see below)
The Fed’s favorite inflation gauge — rose +3.5% YoY, slowing from September 2023’s annual gain of 3.7%.
Core PCE downwards trend is in-sync with Core CPI falling trend for October 2023 as well.
Additionally, it helped too that US’s10-year Treasury yield, that had spooked investors by rising above 5% in October 2023, collapsed in November 2023. (see above)
This comes about as the cooling inflation data rolled out, helping to boost sentiment for equities.
The 10-year yield ticked up marginally to 4.37% on Thu, 30 Nov 2023.
Last but certainly not least, US weekly jobless claims clocked a more “favourable” (to the Fed) results for week ending 25 Nov 2023. (see above)
Report released by the Labor Department registered a modest increase in first-time claims for US unemployment benefits.
Initial jobless claims inched up to 218,000, an increase of +7,000 from the previous week's revised level of 211,000 vs market expectation of 220,000.
All in all, US labour market remains relatively “tight”.
Despite US market ended on a “high” note to closed off November 2023, Nasdaq stocks fell on the last day of November though. (see below)
One of such stocks is $Tesla Motors(TSLA)$.
On Thursday when the closing bell ringed at 4:00pm, Tesla has lost -1.66% (-$4.06), ending November 2023 at $240.08 per share.
In afterhours trading, it further lost another -2.07% (-$4.98) to $235.10 per share.
Many reasons for the fall:
(1) Has the cybertruck priced itself out of competition?
The long-delayed Cybertruck finally made its “official” debut.
Although no dollars and cents were mentioned during the event, the prices could be found on its sales portal.
Basic model - $60,990 vs $39,990 (original 2019 price). >50% higher than original quote.
All-wheel model - $79,990.
Cyberbeast model - $90,990 vs $69,000 (original 2019 price). >32% higher than original quote.
The man has outdone himself once again.
In 2019, an “interested” buyer needed to place a refundable $100 deposit in order to get a reservation allocation.
Fast forward to November 2023, a further $250 deposit is now required to further along the reservation, in time for a 2025 delivery.
The US economy is not exactly rosy; US consumers need to honestly ask themselves, is there a need for an unnecessary big-ticket item?
(2) The long wait.
Electric pickup trucks are gradually becoming the norm.
In 2018, $Rivian Automotive, Inc.(RIVN)$ was among the first EV makers to showcase a concept itruck.
In January 2019, $Ford(F)$ followed up with its gasoline crossover — the Ford F-150 Lightning at the 2019 Detroit Auto Show.
In November 2019, Tesla did a similar reveal in its Tesla Design Studio.
The big difference between these 3 electric truck (ET) makers is that both Rivian and Ford have been delivering their ETs to customers since September 2021 and May 2022 respectively.
With mr musk admitting that Cybertruck production ramp up will not happen until 2025, I wonder how many of those in the $100 queue will proceed to further deposit $250; just to sit out for another year or more before laying their hands on a cybertruck.
A lot of things could happen in 1.5 years. LOL !
(3) Vulgarities gets one nowhere.
I am sure all readers would have known about Mr musk’s mid-life crisis outburst on Wed, 29 Nov 2023 at New York Times DealBook conference.
Understandably he is upset with important advertisers withholding advertising, that is an important financial lifeline for Twitter (X).
If only this “brilliant” salesman stops and ponder, he would have realized that Twitter’s decay to current state is all his own doings.
There is no one to be blamed except himself:
No one put a knife against his neck to force him to buy Twitter.
It was his ego that landed him to purchase Twitter at an inflated $44 Billion.
It was his stupid decision to mass-terminate almost 90% of Twitter staff that resulted in paying customers’ mass exodus.
It was his “ingenious” decision to antagonize paying customers by having a “poo poo” emoji as auto-reply. He thinks its funny but its disrespect to paying customers.
And finally, it is his decision again to fully support the antisemitic tweet on X, that landed himself in hot soup.
If he could send satellites into space, surely he could understand the damages he consistently bring to undermine his playground app - Twitter.
(4) Disruptive labour strikes coming soon.
The saga took place when a Tesla subsidiary in Sweden refused to recognize the labor union of about 130 striking mechanics.
The strike that had gone on for a month was initiated by Sweden’s IF Metall union.
Their missions — seeking better wages, pensions, and insurance for Tesla workers.
The strike went viral, expanded to include dockworkers and electricians, disrupting car deliveries and maintenance.
Despite prolonged negotiations, Tesla refused to sign a collective bargaining agreement, challenging established labour market principles in Sweden, where most of the workforce is unionized.
The strikes in Sweden could empower German Tesla employees, where unions push for a collective bargaining agreement amid claims of lower pay and dismissal of frequently ill workers.
Fresh from its victories against Ford, GM and Stellantis, UAW — one of the largest and most diverse unions in North America and with members in virtually every sector of the economy will be looking on how best to represent Tesla’s workers.
On a worst-case scenario, similar labour strike may take place at Tesla’s Giga factories in America, if not 2023, then 2024.
(5) Lawsuit due to Tesla’s Autopilot function.
In another post, I have covered the topic in detailed.
Tesla to fall due to Autopilot ? — click to read.
Will this single lawsuit become the starting point for many more to follow suit?
Do you think Tesla stock price will continue on a downwards spiral in the near term?
Do you think it is more strategic to take profit now and then re-purchase at a “lower” price. Ms Cathie Wood has been doing just that as revealed in Ark’s latest 13-F filing.
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Yall better watch out. 230 inbound
Still on the top of my list anyways
Big premarket drop…
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