A look at the day ahead in the US and global markets by Mike Dolan
Struggling Tesla shares saw a rare 10% breakout overnight despite missing quarterly earnings from the electric auto giant, underscoring better market sentiment as Meta heads to the dock later results and that commercial activity in the United States cools in April.
Plunged into a global price war and hit by falling global demand for electric vehicles, Tesla said its quarterly revenue fell for the first time since 2020 and more than Wall St analysts had expected . Revenue per vehicle plunged 5% from last year.
But perhaps reflecting the extent of short-selling that fueled the stock’s fall of more than 42% this year through Tuesday’s close, shares jumped once the report was released after the bell – ostensibly encouraged by somewhat vague plans to introduce “new models” at low prices. by early 2025 and update from boss Elon Musk.
Hotter tech stocks generally helped, as mega-caps prepare to release their quarterly reports this week and next week. The S&P500 as a whole posted a second straight day of gains Tuesday, helping the index recoup more than a third of this month’s nearly 6% peak-to-trough decline.
Meta Platforms, parent company of Facebook, one of the big winners of the artificial intelligence boom of the last 18 months and whose stock is still up more than 40% this year, reports after the market close on Wednesday.
In the background, the US Senate voted Tuesday evening by a large majority in favor of legislation that would ban TikTok in the United States if its owner, the Chinese technology company ByteDance, fails to divest the popular short video application over the next nine months. a year. The move ups the ante in the increasingly tense technology conflict between the United States and China.
The four-year battle over TikTok, used by 170 million people in the United States, is just one front in the internet and technology war between Washington and Beijing. Last week, Apple said Beijing had ordered it to remove WhatsApp and Threads from its App Store meta-platforms in China due to Chinese national security concerns.
US Secretary of State Antony Blinken arrives in Shanghai on Wednesday amid fragile US-China relations and a worrying number of unresolved issues between the two global rivals.
As Blinken hits Beijing, President Joe Biden will sign a bill that will provide billions of dollars in new aid to Ukraine for its war against Russia, a bipartisan victory for the president as he seeks re-election .
Flash figures for US activity released by S&P Global yesterday also lifted investor morale, revealing a surprising slowdown in overall activity in April and a decline in price pressures and labor costs. .
While the failure may seem worrying, markets are reading the report as potential relief for the increasingly hawkish Federal Reserve, helping rate futures and Fed Treasuries rally.
Helping the auction of $69 billion of two-year notes in the process, the report pushed two-year Treasury yields back by 5% – although they continued to hover around 4.94% initially. ..
