Good morning team. I’m senior reporter Phil Rosen.
Today I want to point you toward Tesla.
Not that Elon Musk really needs more attention, but his company’s stock warrants a look for a very successful six-week stretch.
We’re right on the brink of the weekend — let’s not delay.
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1. Last year, Tesla drew headlines for its roughly 65% stock decline. But just six weeks into the new year, the electric vehicle maker has nearly erased those losses.
Elon Musk’s company last year saw $700 billion in market value wiped off as rising interest rates weighed on investors’ appetite for growth stocks.
Not only that, but Musk’s $44 billion purchase of Twitter spooked investors, too, with some accusing him of using Tesla as his personal ATM for his takeover.
Tesla’s dramatic resurgence is fueled by its strong fourth-quarter earnings performance as well as markets’ anticipation of coming interest-rate cuts from the central bank, given that inflation has fallen for six months in a row.
Remember, easing monetary policy catalyzes riskier bets on names with high growth potential.
Tesla is also making its rivals sweat with its recent price cuts on its vehicles that some analysts have speculated could drive an EV-price war.
Bank of America strategists have forecasted that the move can ultimately boost sales volume, and Wedbush gave Tesla stock a 35% upside.
Now, the stock has climbed alongside a broader market rally. The Nasdaq has jumped about 16% year-to-date, and the S&P 500 is up about 8%.
And according to Vanda Research, retail investors’ bullishness for Tesla is driving a FOMO Tesla trade that has pushed inflows from the cohort into the stock market at levels not seen since 2020.
“We believe that retail traders are currently chasing momentum in the stock aiming to recoup 2022 losses,” strategists wrote, adding that Musk himself has also helped catalyze interest in the brand, and retail buyers are eagerly awaiting Tesla’s upcoming investor day.
“Master Plan 3, the path to a fully sustainable energy future for Earth will be presented on March 1. The future is bright!” Musk tweeted on Tuesday.
Are you bullish on Tesla’s prospects in 2023? Tweet me (@philrosenn) or email me (email@example.com) to let me know.
In other news:
2. US stock futures fall early Friday, as investors assess the latest earnings releases. Among them was ride-hailing platform Lyft, whose shares plummeted 30% after a disappointing fourth-quarter report. Here are the latest market moves.
3. On the docket: Enbridge, Honda Moto, and more, all reporting.
4. Buy these cash-rich, high-momentum stocks instead of speculative meme stocks. That’s according to Wall Street firm Evercore, which likes these names as safer bets that should outperform even if the economy slows down. See the full list of 26 stocks.
5. Former Treasury Secretary Larry Summers compared falling inflation to a half-way healed “infection” that could still worsen if not treated properly. In his words: “The hard thing to judge is whether inflation is on a strong enough downward trajectory to get to the 2% target.”
6. A top commodity firm is staring down a $577 million loss after it discovered some of its metal cargoes were missing nickel that it ordered. Trafigura, one of the world’s largest energy and metals traders, has spent two months uncovering a systemic fraud perpetrated against the company, according to a Bloomberg report. The company has now launched legal action.
7. Warren Buffett’s Berkshire Hathaway has outperformed the market in the last three recessions. And UBS analysts said the conglomerate is positioned to do that again if a downturn hits in 2023 — here’s why.
8. A worse-than-expected recession will cause the price of homes in overvalued markets to drop 20% this year. That’s what a 40-year market veteran is forecasting. He shared the three cities that are most at risk.
9. Experts think the path to a Fed pivot is going to be complicated. Stocks are skyrocketing because investors are hoping the central bank eases up on its interest rate hikes, but strategists aren’t so certain that a pause would end its moves this cycle. Get the details.
10. Alibaba stock jumped after it announced that it’s working on its own ChatGPT rival. It joins the likes of Microsoft, Google, and Baidu in the AI race, and the Chinese e-commerce giant said its chatbot could be integrated into its products.
Curated by Phil Rosen in New York. Feedback or tips? Tweet @philrosenn or email firstname.lastname@example.org
Edited by Max Adams (@maxradams) in New York and Hallam Bullock (@hallam_bullock) in London.