Tesla Caution
S&P 500 futures rose 5 points [0.1%], Nasdaq 100 futures were basically unchanged, and Dow futures rose 104 points [0.3%].
US GDP ahead
The first reading of U.S. growth figures for the fourth quarter may indicate the health of the world’s largest economy, therefore traders will certainly be watching.
In the fourth quarter of last year, economists expect real GDP to grow 2.0%, down from 4.9% in the third quarter.
Markets are looking for indicators of how high interest rates affect activity. Stocks have risen recently on optimism that the U.S. will have a “soft landing” in which the Federal Reserve’s monetary policy tightening campaign cools inflation without causing a deep economic crisis.
Fed officials have tempered this optimism, saying such a situation is becoming more likely but not inevitable. The GDP result may affect this outlook, but ING analysts said the Fed’s preferred price growth metric on Friday will be “far more important” for rate-setters.
The Fed is expected to keep borrowing costs on hold at more than two-decade highs of 5.25% to 5.50% at its next meeting later this month, but this week’s data could influence rate decreases this year.
Tesla reports slowing sales
Tesla, led by Elon Musk, forecasts “notably lower” sales growth in 2024 due to rising competition and stalled demand from cost-conscious carbuyers.
The business told shareholders it is “between” a growth wave sparked by Models 3 and Y and a second it anticipates would be sparked by a lower-cost, next-generation offering. Musk told analysts in a post-earnings call that the car will be produced in the second half of 2025 using “revolutionary manufacturing technology.”
Musk also said margins, a key indicator of Tesla’s operations, “will be good” if interest rates fall soon and “won’t be that good” otherwise. “[W]e don’t have a crystal ball, so it’s difficult for us to predict this with precision,” said.
Tesla’s stock fell Thursday premarket in the U.S. After Musk warned that major Chinese EV makers would “demolish” their foreign rivals without trade barriers, shares fell amid concerns about export restrictions.
Tesla’s announcement coincides with several other major U.S. companies’ quarterly earnings. American Airlines (NASDAQ:AAL) and Southwest Airlines (NYSE:LUV) report before the bell on Thursday, while Visa (NYSE:V) and Intel (NASDAQ:INTC) report after New York markets close.
FAA halts Boeing 737 MAX expansion
Boeing suffered another setback this month when the U.S. aviation authority denied it permission to increase 737 MAX manufacturing.
Thursday premarket Boeing shares fell.
The Federal Aviation Administration said the decision will stop Boeing’s production of one of its most popular jets to “ensure accountability and full compliance” with quality control procedures. After a non-fatal fuselage blowout on an Alaska Airlines MAX 9 on Jan. 9, Boeing’s safety has come under scrutiny.
It was unclear how the FAA’s decision would affect Boeing’s production or finances. Boeing relies on the MAX 8, a revenue generator.
After safety assessments, the FAA allowed MAX 9 jets to fly.
“The exhaustive, enhanced review our team completed after several weeks of information gathering gives me and the FAA confidence to proceed to the inspection and maintenance phase,” said FAA Administrator Mike Whitaker in a statement.
Economic Calendar
8:30 AM ET Gross Domestic Product (GDP) Q4 Advance
8:30 AM ET Consumer Spending Advance for Q4
8:30 AM ET GDP Price Deflator for Q4
8:30 AM ET PCE Prices Advance for Q4
8:30 AM ET Core-PCE Prices Davance for Q4
8:30 AM ET Weekly Jobless Claims
8:30 AM ET Continuing Claims
8:30 AM ET Durable Goods Orders M/M for December
8:30 AM ET Advance Goods Trade Balance for December
10:00 AM ET New Home Sales M/M for December
10:30 AM ET Weekly EIA Natural Gas Inventory Data
11:00 AM ET Kansas City Fed manufacturing for January
1:00 PM ET US Treasury to sell $40B in 7-year notes.
Other Key Events:
American Society for Clinical Oncology Genitourinary (ASCO GU), 1/25-1/27, in San Diego, CA
JP Morgan 2nd Annual Hyper Growth Private Technology Conference 1/24-1/25, in San Francisco, CA
TD Cowen Annual Global Mining Conference, 1/23-1/25, in Toronto, CA
Must read book about investing– check here
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2023 Chinese growth exceeds objective, but difficulties persist
China’s economy grew slightly less than predicted in the fourth quarter due to sluggish spending and a property market slump, but it narrowly beat government expectations for 2023.
Gross domestic product rose 5.2% year-over-year in the three months to Dec. 31, the National Bureau of Statistics reported Wednesday. The reading was weaker than 5.3% predictions but up from 4.9% the quarter before.
This raised 2023 growth to 5.2%, above Beijing’s 5% target. Despite COVID-19 limits, activity increased from 3% in 2022 due to a lower base for comparison. Except for the three pandemic-era closures, it was the lowest yearly expansion rate since 1990.
Last year, the Chinese economy was hampered by falling consumer spending, a housing market crash, and deflation. The world’s second-largest economy has demographic concerns, as shown by new data showing a faster population fall in 2023.
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2023 Chinese growth exceeds objective, but difficulties persist
China’s economy grew slightly less than predicted in the fourth quarter due to sluggish spending and a property market slump, but it narrowly beat government expectations for 2023.
Gross domestic product rose 5.2% year-over-year in the three months to Dec. 31, the National Bureau of Statistics reported Wednesday. The reading was weaker than 5.3% predictions but up from 4.9% the quarter before.
This raised 2023 growth to 5.2%, above Beijing’s 5% target. Despite COVID-19 limits, activity increased from 3% in 2022 due to a lower base for comparison. Except for the three pandemic-era closures, it was the lowest yearly expansion rate since 1990.
Last year, the Chinese economy was hampered by falling consumer spending, a housing market crash, and deflation. The world’s second-largest economy has demographic concerns, as shown by new data showing a faster population fall in 2023.
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