🚘 Tesla and more disappoint

and the changing global situation

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Good morning investors! The S&P 500 has scored 43 record highs so far in 2024 but yesterday was mixed with some stocks closing lower and Bitcoin once again falling to $60K.

Today we cover:

  • All about China stimulus

  • Oil to jump?

  • Tesla and other car manufactures offer delivery figures

📊 Economy and News 

China’s Stimulus: What It Means for Markets and Global Brands

China has launched its first significant monetary easing in years, including cuts to reserve requirements, interest rates, and adjustments to property-related policies.

These measures aim to stabilize the economy, particularly the property sector, and boost liquidity.

Alongside this, fiscal stimulus is expected to focus on consumption and investment, with policies targeting social security, healthcare, and support for families.

Analysts warn that this is China’s worst consumer down-cycle since joining the WTO, with RMB60 trillion in property wealth destruction since 2021 contributing to record-low consumer confidence.

How It May Impact Stocks and Other Markets

In the short term, China’s actions are lifting market sentiment, with a recent RMB17.3 trillion boost to the A-share market. However, Bank of America analysts caution that a full recovery in consumption will take time, potentially extending the down-cycle for another 1-2 years.

Global brands, especially in the luxury sector, may see initial stock gains from a wealth effect, but they face rising competition from domestic brands. While global markets may react positively to China’s easing, the long-term impact will depend on the effectiveness and decisiveness of the policies.

Global hits:

Oil in view: The oil market faces a rising risk of supply disruptions as war spreads in the Middle East, geopolitical and crude market analysts say. Israel could hit Iran’s oil facilities in response for the Islamic Republic’s ballistic missile attack. Prices could rise as a result, though OPEC has spare capacity that can cushion the market so long as the Strait of Hormuz is not disrupted.

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📈 Stocks

S&P 500 5,709.54 (+0.014%)
DJIA 42,196.52 (+0.094%)
NASDAQ 17,925.12 (+0.082%)
BRENT CRUDE 74.43 (+1.53%)
* Prices as of Oct 3rd, 12:20 AM UTC

Deliveries and More: Tesla Disappoints, GM Surprises, Stellantis Remains Poor, and Ford Struggles

Tesla: Tesla released its third-quarter production and delivery numbers on Wednesday, with shares dipping -3.49% after the announcement despite it being the first sales jump of the year:

  • Q3 2024 deliveries: 462,890 (vs. analysts’ expectations of 463,310)

  • Q3 2024 production: 469,796

Deliveries are up from 435,059 a year ago but only slightly higher than last quarter's 443,956. Competition, particularly in China from rivals like BYD and Li Auto, and in the U.S. from Rivian and legacy automakers such as GM and Ford, is impacting the company.

Tesla has not provided delivery guidance, though a slower growth rate is expected even with the upcoming Cybertruck.

Tesla shares have risen 32% in Q3, now up 4% for 2024, but still lagging behind the Nasdaq’s 19% gain. However, it got a raise yesterday – to $236.

Stellantis: Stellantis reported U.S. sales of 305,294 vehicles for the third quarter, down 19.8% from a year ago and 11.5% from the previous quarter. While industrywide sales are expected to dip about 2%, Stellantis highlighted progress in boosting sales, with market share rising from 7.2% to 8% and U.S. vehicle inventory down by 11.6%.

GM: General Motors reported a slight beat in third-quarter sales, aided by increased EV and small crossover sales. Despite a 2.2% decline from last year, with 659,601 vehicles sold, GM outperformed forecasts, which predicted a steeper drop of over 3%.

EV sales surged 60% year-over-year to about 32,100 units, though they still only accounted for 4.9% of total sales. GM now holds a 9.5% share of the U.S. EV market, up three percentage points from earlier this year.

Ford: Ford lost its EV sales lead to GM in the third quarter as its EV growth slowed. Ford reported a 0.7% increase in overall U.S. sales, including a 12.2% rise in EVs compared to last year.

Through September, Ford's EV sales grew 45% to 67,689 units, while GM surpassed it with 70,450 EVs sold, thanks to a 60% increase in Q3. Both automakers trail Hyundai and Kia by around 18,000 units, with Tesla still dominating U.S. EV sales.

Good to know: Costco launched platinum bars on its website for $1,089.99, an addition to the company’s precious metals selection of gold bars and silver coins.

This is exciting since gold and precious metals should be a part of your IRA.

Reminder: LVMH and Formula One announce 10-year partnership.

💵 Personal Finance

Do this to get out of credit card debt

About 183 million Americans have credit cards and it's not a good thing. Americans lean heavily on credit to make ends meet, which pushes them into debt.

With increasing inflation, consumers are forced to consider options such as credit cards, hence it doesn’t come as a surprise that the average consumer credit card balance has risen to $7,951, the highest in 10 years.

If you have a credit card and you find it harder to control spending or get rid of debt, then check these tips below:

  • Create a debt payment strategy that works for you. Some popular options include the snowball method and the debt avalanche method.

  • Consider paying more than the minimum and, if possible, automate the process. This will not only help you avoid late fees but also allow you to get rid of debt quickly.

  • Consider debt consolidation, i.e.: consolidating your payments into a single account so it's easier to manage. However, be careful and try to benefit from affordable personal loans and 0% balance transfer credit cards.

  • Get in touch with your creditors and work out a plan that works for you. Some creditors have hardship programs that offer relief in circumstances such as illness and unemployment.

  • Look at available debt relief plans such as bankruptcy, debt settlement, and debt management. Though not always effective, some of these options may give you a new lease of life.

In addition, it might be a good idea to change your lifestyle and follow these tips:

  • Get rid of credit cards, instead consider debit cards. Some come with exciting features, including the ability to earn money on your deposits.

  • Set a budget and stick to it. You might have some difficulty in the beginning but you’ll eventually get used to it.

  • Create an emergency fund and turn to it only when you need it.

💰 Be a Better Investor

“Even the intelligent investor is going to need considerable willpower to keep from following the crowd.”

Ben Graham

Resources:

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👩🏽‍⚖️ Legal Stuff
Nothing in this newsletter is financial advice. Always do your own research and think for yourself.