TSLA stages successful comeback this time ?
On Tue, 11 Mar 2025, US market continued to fall, picking up from where it left off on Monday.
It was still about tariff and between former friends - US & Canada.
Trade tensions fueled a wild day on Wall Street, with major indexes finishing a choppy session lower even after signs of a thaw in talks between the 2 countries.
Trump’s move to ratchet up tariffs on aluminum and steel from Canada to 50%, triggered a new round of losses early in the session, sending all three major indexes lower.
Stocks regained some ground after reports that Ontario would axe a surcharge on electricity delivered to the US and Trump said he would “probably” cut back the increased tariffs.
However, all these is still subjected to further discussion on Thu, 13 Mar 2025 between Trade Secretary Howard Lutnick & Premier Doug Ford in Washington, alongside the US Trade Representative to discuss a renewed USMCA ahead of the 02 Apr 2025 reciprocal tariff deadline.
By the time market closed on Tuesday:
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DJIA: -1.14% (-478.22 to 41,433.48).
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S&P 500: -0.75% (-42.49 to 5,572.07).
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Nasdaq: Un inch (17,436.10).
US Economic Reports.
This week coincides with the release of several important US economic reports also.
Tuesday saw 2 reports released:
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NFIB Small Business Optimism.
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Jobs Opening and Labour Turnover surveys.
(1) NFIB Small Business Optimism Index.
The Small Business Optimism Index fell by -2.1 points in February 2025 to 100.7, marginally lower than January’s data of 102.8.
Good news is , February data is the 4th consecutive month that the SME optimism index remained above the 51-year average of 98.
However, it is still -4.4 points off its most recent peak of 105.1 in December 2024.
(2) Jobs Opening and Labour Turnover survey (JOLTs).
For January 2025, the labour market is holding steady, with the JOLTs showing layoffs declining for a 4th straight month to the lowest level since June 2024.
Job openings, a measure of labour demand, were up +232,000 to 7.740 million by end January 2025 vs analysts’ estimates of 7.65 million vs a downwards revised December’s 7.508 million.
Statistically, there were 1.13 job openings for every unemployed person, up from 1.09 in December.
Hiring, however, remained tepid consistent with caution among businesses, thanks to Trump’s antics that has been more harmful than helpful.
The sad twist to this month’s happy ending report - is labour demand is very likely to soften in the months ahead amid concerns that uncertainty over import tariffs and aggressive government spending cuts could cause a sharp slowdown in economic activity.
(3) Consumer Price Index (CPI).
The most anticipated report this week will be consumers’ inflation report. (see abpve)
Markets will be watching closely for signs of cooling inflation amid growing trade tensions, that is wrecking US market big time and throwing a curve ball at the Fed.
Economists project headline CPI will rise 0.3% MoM, a notable deceleration from January's worrying 0.5% increase.
If the forecasts are accurate, annual inflation rate would cool to 2.9%, down from 3% in January. This would mark the first time since early 2023 that headline inflation has fallen below the psychologically important 3% threshold.
As for core CPI that is closely watched by the Fed, economists anticipate a 0.3% monthly increase, translating to a 3.1% annual rate, moderating slightly from January's 3.3% reading.
The upcoming data arrives just in time before the Fed’s FOMC meeting that will be held in Mar 18-19.
TSLA - Comeback Kid ?
$Tesla Motors(TSLA)$ has plummeted and rocketed back to life so many times that it's easy to forgive the analysts and investors who have given up on the ticker at one time or another.
Tesla's DOGE-era doldrums are, for the faithful bulls, just another pivot point to the next run-up.
Way before questions about the negative impacts of US and European political interference, there was ceaseless discussion about Twitter and a distracted CEO.
And before there were (other) red flags concerning Chinese competition, there were worries about "production hell" and "bottlenecks" after the company debuted the mass-market Model 3.
According to Webush, CEO - Dan Ives: (a die-hard Musk fanboy)
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There have been a number of times in the Tesla story over the past decade that negative sentiment and Street worries have overshadowed the narrative of this unique disruptive global tech story.
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If there is blind-acceptance that Tesla is not merely a car company, then this will be the start of the biggest innovation and technology cycle in Tesla's history over the next few years.
Independent analysts with a more critical take on Tesla’s business acknowledge the potential of Musk’s autonomous ambitions.
However, that upside had already been baked into the stock, that is believed by many as being overvalued even when other financial pluses from humanoid robots and a fleet of robotaxis are thrown into the mix.
While Tesla attempts to remake itself as an AI & robotics institution, it still has to make and sell EVs in the meantime and it has proved to be a stubborn predicament, in US and Europe, where the CEO's unpopularity is hurting sales.
Although the situation in China where Tesla and its CEO, have a better image it is losing out to other Chinese EV makers due to stiff competition and its aging fleet.
On Mon, 10 Mar 2025 when Tesla suffered its biggest one day loss of -15%, $UBS Group AG(UBS)$ Analyst - Joseph Spak:
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Reiterated a 12-month “Sell” rating on Tesla.
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Cut his price target to $225 from $259.
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Cited lower delivery forecasts stemming from softer demand for Model 3 & Model Y EVs.
A bearish call coupled with downbeat deliveries from China, where its shipments fell to the lowest level in almost 3 years, dragged shares -15.4% lower, erasing all traces of post-election gains and putting the stock at -39.21% YTD.
The “Trump bump” has been wiped out, the closing record of $479 achieved on 17 Dec 2024 has been cut in half.
If the harsh pullback represents a transition from an automotive company to an AI, robotaxi, and robotics play, (with many investors still unconvinced) the next run-up will be a very costly "told you so". Alternatively, if it never arrives, it will just be another Tony Stark fantasy.
What do you think about this comeback kid - fact or fiction?
Must Read: Click on below titles to access. Repost to share, Like as encouragement ok. Thanks.
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Do you think a revised United States-Mexico-Canada Agreement (USMCA) will help to alleviate tariff tensions between US & Canada and US & Mexico ?
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Do you think TSLA will fall to $225 as per USB analyst’s prediction ? This is even lower than the $250 target price shared in my post dated 19 Feb 2025. (click here ! for details)
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