Market Minutes | Tesla Tumbles ~5%, Q1 Delivery Misses; US Stocks Plunge Across Board

M+ Global Updates 03/04/2024 08:59

I. US Market Recap

On Tuesday, the 30-stock Dow dropped nearly 400 points, or 1%. The S&P 500 lost 0.7%, while the Nasdaq Composite tumbled nearly 1%.

Still, some market observers remain optimistic overall on equities, saying stocks are due for some consolidation after a strong start to the year. The S&P 500 is coming off its best first quarter since 2019.

“I think it’s a little bit of a garden variety pullback,” Kristen Bitterly, global wealth head of investment solutions at Citi, said on CNBC’s “Closing Bell” on Tuesday. “We’ve heard day after day that we’re either touching all-time highs or within reach of all-time highs. So, I don’t see anything to read into today, more than geopolitics resurfacing, yields popping up.”

“We know that the Fed’s trajectory from here is downward. We know inflation is coming down. And we know that earnings have turned a corner as well,” Bitterly continued. “So, when you have that fundamental backdrop, it’s actually pretty constructive for risk assets overall.”

On Wednesday, investors will get more insight into the labor market with the ADP private payrolls report, which comes ahead of the March jobs data on Friday. The ISM services index is set to release after the open.

Federal Reserve Chair Jerome Powell is also set to speak, as is a slew of other central bank speakers including Fed Governors Michelle Bowman and Adriana Kugler. Chicago Fed President Austan Goolsbee and Fed vice chair for supervision Michael Barr will also be speaking at events.

On the earnings front, Levi Strauss will be reporting after the close.

(Source: CNBC)

II. Stocks in Focus

Bank of America Securities analyst Vivek Arya highlighted Nvidia ($NVIDIA Corporation NVDA$) and Broadcom ($Broadcom Limited AVGO$) as top picks in the AI sector, citing a generational shift in AI server adoption with Nvidia and Broadcom leading the charge. Nvidia received a "buy" rating with a target price of US$1,100, while Broadcom also earned a "buy" with a US$1,680 target price.

Tesla Inc. ($Tesla Motors, Inc. TSLA$) reported an 8.5% year-over-year decrease in vehicle deliveries for Q1 2024, with about a 20% drop from Q4. Production also declined by 1.7% year-over-year and 12.5% sequentially. This underperformance falls below analysts’ lowest estimates. Wells Fargo ($Wells Fargo & Company WFC$) listed Tesla as a tactical short, anticipating flat delivery growth at around 1.8 million, 10% below market expectations.

Advanced Micro Devices ($Advanced Micro Devices, Inc. AMD$) filed with the SEC mentioning the unreleased MI388X AI accelerator, hinting at a high-performance product. Additionally, AMD’s European website listed the Radeon RX 7600 at US$269/€295.

Apple Inc. ($Apple Inc. AAPL$) is reportedly planning a budget-friendly AirPods model for later this year. Notably, the iPhone 6 Plus is now officially discontinued worldwide.

Microsoft Corp. ($Microsoft Corporation MSFT$) is reportedly negotiating with OpenAI to build a $100 billion global data center project that could operate by 2028.

Google ($Alphabet Inc. Class C GOOG$, $Alphabet Inc. Class A GOOGL$) Podcasts ends service, segueing users to YouTube Music. Meanwhile, Wells Fargo's stock team included Amazon ($, Inc. AMZN$) and Tesla ($Tesla Motors, Inc. TSLA$) in its tactical long and short list for Q2, emphasizing Amazon’s logistics restructuring for profit growth.

United Parcel Service ($United Parcel Service, Inc. Class B UPS$) takes over as the main air cargo provider for USPS, ending FedEx’s ($FDX) 20-year partnership set to expire on September 29.

Alibaba Group ($BABA 03012.MY$) announced completing a $12.5 billion buyback of 1.25 billion shares, a net reduction of 1.05 billion shares, representing 5.1% after accounting for issued shares under equity incentive plans.

Read More:

华盛早报 | 美股全线杀跌!特斯拉重挫近5%,Q1交付量远逊预期

Finally, a small reminder for investors:

The regular trading hours for Hong Kong stocks are from 09:30 to 16:00 GMT+8.

The regular trading hours for US stocks in the Winter Time are from 21:30 to 04:00+1 GMT+8, with pre-market trading available from 16:00 to 21:30.

Have a nice trading day!