April 21, 2024 | Daily JAM, Morning Briefing, Short Term |
I’m sure you’ve noticed. The technology sector, which led the stock market rally in 2023 and in the early days of 2024, is in a slump. The Technology Select Sector SPDR ETF (XLK) tumbled 6.27% last week and is down 7.16% in the last month. For 2024 to date, as of the close on April 19, the sector is at break even with gain of 0.19%. Quite a turnabout for a sector that is still up 30% for the last 12 months. This week brings a raft of tech earnings that could turn the sector’s trend around. Or not.
April 15, 2024 | Daily JAM, Mid Term |
Can’t figure Tesla (TSLA) out? Welcome to the club. The stock was down another 5.59% today, April 15, and is now down 31% for 2024. Maybe investors will get some clarity on the company’s identity and strategy when it announced earnings on April 23. Wall Street analysts expect earnings of 36 cents a share against earnings of 73 cents a share in 2023. I think that strategic clarity is actually more important than quarterly earnings at this point for Tesla.
April 2, 2024 | BYDDF, Daily JAM, Jubak Picks, Morning Briefing |
Today, Tesla (TSLA) reported that it delivered just 386,810 vehicles in the first three months of the year. That was the biggest difference between actual sales and Wall Street sales estimates in data going back seven years, according to Bloomberg. Most analysts expected Tesla to sell more vehicles than a year ago. Instead, deliveries ended up dropping 8.5% year-over-year. And it was the first drop in year-over-year sales since the first year of the Covid-19 pandemic.
March 11, 2024 | AAPL, Daily JAM, GOOG, Top 50 Stocks, Videos |
Today’s video is The Magnificent Five? The Magnificent Seven were the main drivers of market success at the end of 2023 and the beginning of 2024. But what happens when the Magnificent Seven are more like a magnificent Five, or even four? The original Magnificent Seven included Apple, Amazon, Meta Platforms, Microsoft, Alphabet (Google), Nvidia, and Tesla. Both Tesla and Apple have taken major hits largely due to problems with China. China’s regulations have made it harder to sell Apple products in the country in the government’s effort to push domestic goods. Apple sales in China are down 16-17%. in the first six weeks of 2024. This, alongside a Wall Street perception that Apple is behind in AI technology, has brought Apple shares down 12% for 2024. As for Tesla, China is producing massive numbers of cheaper electric vehicles that are increasingly exported globally (with the exception of the United States where high tariffs on Chinese electric vehicles limit sales) leaving Tesla down 25% in 2024. Google is also down 5% year to date though it may be too soon to write Alphabet off as “not magnificent” just yet. Both Apple and Tesla are no longer pacing the market and are indeed lagging. Bad thing? Good thing? I’d vote for “good thing.” The rally is beginning to spread out from a handful of big names. The only thing that makes me a bit wary is that so many investors are hoping to make money on speculative moves while the market is moving sideways. Those moves could cause volatility in a market that is otherwise likely to stay steady until we get big news from the Federal Reserve on interest rate cuts in June or so.
March 7, 2024 | Daily JAM, Mid Term, Morning Briefing, Stock Alerts |
Right now Tesla (TSLA) is a case study in how sentiment on a stock changes, how long it takes sentiment to change (and recover), and the stages of sentiment change. You understanding of this process should be our guide to whether you want to own Tesla and when. Tesla (TSLA) could potentially lose money in 2024, Morgan Stanley’s Adam Jonas wrote in a note to investors this week. And he cut his Tesla earnings projections by 25% to $1.51 a share from a prior $2.04. Gross profit margins will fall to 11.4% (excluding regulatory credits that Tesla gets paid by automakers looking to meet EPA mileage and emissions rules.) And this is from a Tesla bull.
January 29, 2024 | Daily JAM, F, GM, Mid Term, TSLA, Videos |
Today’s Trend of the Week video is Bad News from Tesla is even worse news for other electric vehicle companies. On January 24, after the close, Tesla announced a slight miss on their earnings report. Guidance was rather sparse but grim. Sales grew at about 38% in 2023, well below the 50% target that Tesla regularly touts. The 2024 guidance is even below that, (Wall Street estimates 24%). While this isn’t great for Tesla, it’s much worse for companies like Ford, GM and Volkswagen who are trying to figure out how much to spend and when to build market share for electric vehicles. The companies have been using estimates based on Tesla likely prices and profit margins in order to build their own projectors for their own profitability in electric vehicles. Those estimates, thanks to recent guidance from Tesla, appear to badly outdated, especially if Tesla is considering cutting prices again. Now companies like GM and Ford will have to decide how much pain, and for how long, they’re willing to take in order to get into this market.
January 24, 2024 | Daily JAM, Morning Briefing, Short Term |
Today, after the market close, Tesla (TSLA) reported fourth-quarter earnings of 71 cents a share. The missed the consensus Wall Street forecast of 73 cents. Sales of $25.2 billion missed forecasts for $25.6 billion. But I’d argue that the earnings and sales misses weren’t the worst news in the report.
January 21, 2024 | Daily JAM, Morning Briefing, Short Term |
The Magnificent Seven stocks accounted for virtually all of 2023’s 24% stock market gain. The Magnificent Seven stocks are Alphabet (GOOG), Amazon (AMZN), Apple (AAPL), Meta Platforms (META), Microsoft (MSFT), Nvidia (NVDA), and Tesla (TSLA). And according to Wall Street analysts these stocks are set to do it again when they report fourth quarter earnings beginning this week (on Wednesday, Jonuary 24, with Tesla and continuing into the following week.The Magnificent Seven are expected to deliver combined earnings growth of about 46%, according to data from Bloomberg. That’s down slightly from the third quarter’s 53% expansion, but it still dwarfs almost all of the main sectors in the S&P 500 Index. It’s not surprising, therefore, that the long Magnificent Seven (and other tech stocks) is the most common trade in the current market. Nor that the options market is pricing in “virtually no risk” for mega-cap stocks, Brian Donlin, head of equity derivatives strategy at Stifel Nicolaus, told Bloomberg. All of which makes the recent weakness in some of the Mgnificent Seven stocks a bit worrying. Apple and Tesla are most likely to deliver disappointing numbers.
January 15, 2024 | Daily JAM, Mid Term |
Hertz (HTZ) plans to sell a third of its U.S. electric vehicle fleet and reinvest in gas-powered cars. The company says the shift is due to weak demand and high repair costs for its electric vehicle fleet. Which is dominated by Telsa’s electric vehicles. Electric vehicles make up about 11% of the Hertz fleet and 80% of those electric vehicles are Tesla. The news certainly isn’t a plus for electric cars and electric car makers. But I think it’s also important not to forget that Hertz is struggling to show improvements to its bottom line. Tesla’s price cuts–and their effect the resale value of the Hertz fleet–may have more to do with this abrupt about face than weak demand and higher repair costs.
December 15, 2023 | Daily JAM |
Electric vehicle inventories on lots at U.S. dealers reached a new high in December. With a 114-day supply, the bloated inventory of electric vehicles is up from a 53-day supply a year ago and compares to 71-days worth of inventory for the overall auto industry.
November 21, 2023 | AAPL, AMZN, Daily JAM, GOOG, Jubak Picks, MSFT, NVDA, Top 50 Stocks, TSLA |
On Monday Nvidia (NVDA) hit an all-time high. For 2023 through November 17, Nvidia and the other 6 stocks in the Magnificent Seven–Apple (AAPL), Alphabet (GOOG), Microsoft (MSFT), Amazon (AMZN), Meta (META), and Tesla (TSLA)–have gained more than 70%. The other 493 stocks in the Standard & Poor’ 500 are up 6% for that same period.
October 14, 2023 | Daily JAM |
Look for a big earnings test for regional banks and a feW clues about consumer goods, airlines, and autos. Last week ended with great earnings reports from Big Banks JPMorgan Chase (JPM), Wells Fargo (WFC) and Citigroup (C). Big Bank earnings continue this week with Bank of America (BAC) and Goldman Sachs (GS) reporting on Tuesday. But the important news for the financial sector will come from the dozens of earnings reports from regional banks.
