🚗 Tesla reports lower deliveries

and FREE financial course inside

Good morning investors! The year started on a mixed note with exciting Bitcoin predictions (some expect it to double) and HSBC thinking US stocks will rally in H1 2025. However, most indexes fell.

Today we cover:

  • The labor market is strong.

  • Tesla fails to impress.

  • Free course inside – worth $1,000.

📊 Economy and News 

Labor Market Shows Resilience as Unemployment Claims Drop to Eight-Month Low

The U.S. labor market ended the year on a high note with unemployment benefit claims reaching their lowest level in eight months.

According to the Labor Department's report, initial applications for state unemployment benefits fell by 9,000 to a seasonally adjusted 211,000 in the week ending December 28, well below economists' expectations of 222,000. This sustained drop in claims aligns with a stable labor market, reinforcing economic expansion despite ongoing challenges.

The robust labor market has contributed to the Federal Reserve's cautious approach toward interest rate cuts in 2025.

While unemployment claims can be volatile during the year-end period, the broader trend suggests a labor market experiencing a gradual slowdown without indications of a sharp downturn. The four-week moving average, which smooths out seasonal variations, declined to 223,250, further underscoring labor market stability.

Sharp declines in unadjusted claims were observed in states like California and Texas, though some states, including Michigan, New Jersey, and Ohio, reported higher filings. Continuing claims, a measure of those receiving benefits beyond the initial week, fell to 1.844 million, reflecting a stable hiring environment.

Global hits:

UK’s housing market: UK house prices rose in December, according to mortgage lender Nationwide, continuing the property market upswing. Prices increased by 0.7% in December after a 1.2% rise in November. Despite broader economic challenges, annual growth reached 4.7% in December 2024, up from 3.7% in November, marking the highest rate since late 2022.

China's Tech: Apple offers holiday discount in China as Huawei competition heats up.

On the other hand, hybrid-powered vehicles are outpacing battery-only cars in popularity in China as consumers move away from gas-powered models. BYD, the market leader, reported that over half of the 4.3 million passenger cars it sold in 2024 were hybrids, marking a shift from 2023. Electric-only startups, by contrast, delivered fewer cars than competitors offering hybrid options.

More importantly, China's factory activity grew in December but at a slower-than-expected pace. Overall sales were dampened by falling export orders amid concerns over the trade outlook.

Moreover, new home prices in China edged up slightly faster in December as government policies aimed at stabilizing the crisis-hit property sector took effect. Prices across 100 cities rose 0.37% from November’s 0.36% increase. Year-on-year, prices grew 2.68% in December, up from 2.40% the previous month.

Lastly, China has added 28 US entities to export control list.

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📈 Stocks

S&P 500 5,868.55 (-0.22%)
DJIA 42,392.27 (-0.36%)
NASDAQ 19,284.97 (-0.13%)
BRENT CRUDE 75.88 (+1.06%)
* Prices as of Jan 3rd, 12:20 AM UTC

Tesla deliveries miss expectations, stock drops

Tesla announced record vehicle deliveries and energy storage deployments in Q4 2024, but deliveries fell short of market expectations. The company delivered 495,570 vehicles, below the consensus estimate of 512,277, and produced approximately 459,000 units during the quarter. Model 3 and Model Y accounted for 471,930 deliveries, with other models adding 23,640 units.

For the full year, Tesla delivered 1.79 million vehicles, driven by over 1.7 million Model 3 and Model Y units. However, annual EV sales declined for the first time in over a decade. Energy storage deployments reached 31.4 GWh for the year, including 11.0 GWh in Q4.

Tesla shares fell over -7% after the news. Wedbush, maintaining an "Outperform" rating and a $515 price target, described the Q4 numbers as "respectable" but noted the disappointment over missing the 500,000-delivery mark. The firm expressed confidence in Tesla’s ability to grow deliveries by 20%-30% in FY25, aided by the launch of a lower-priced EV in early 2025.

Wedbush also highlighted Tesla's progress in AI and autonomous driving, projecting a potential $2 trillion valuation within 18 months, driven by Full Self-Driving (FSD) adoption and the launch of its Cybercab. FSD penetration could exceed 50%, significantly boosting Tesla’s financial model and margins.

Also check: SoFi shares fall about -10% after KBW downgrade on valuation concerns.

US GDP revised: The Atlanta Fed's GDPNow model has revised its Q4 2024 growth estimate to an annualized 2.6%, down from 3.1% on December 24. The adjustment follows recent Census Bureau data showing a shift in real gross private domestic investment growth from 1.3% to -0.7%. Slower-than-expected manufacturing growth in China also contributed to the lowered forecast. This combined caused stocks to close lower yesterday.

💵 Personal Finance

A personal finance course is worth $100,000

Do you wonder why certain individuals struggle to achieve success in areas where others excel? It has a lot to do with literacy. Finance is no different.

There is a strong connection between financial literacy and financial well-being.

This newsletter is a way to educate you about finance and money, but this isn’t (and shouldn’t) be your only tool. There are courses as well and a new report shows that they’re worth the money.

Reports show that there is a lifetime benefit of roughly $100,000 per student from completing a one-semester course in personal finance.

Courses help financially by teaching people how to evade high-interest credit card debt and using improved credit scores to obtain more favorable borrowing rates for crucial expenses like insurance, auto loans, and home mortgages.

But, what makes it interesting is the ripple effect.

Students share this knowledge with their friends and family members resulting in even more economic gains.

The government seems to have realized the importance as well. As of now, half of the states either mandate or are in the process of mandating that high school students complete a personal finance course before graduation.

Furthermore, Next Gen's bill tracker shows that an additional 35 personal finance education bills are pending in 15 states.

Real perks: It has been found that students who take personal finance courses early on are more inclined to utilize lower-cost loans and grants for college expenses, rather than resorting to private loans or high-interest credit cards.

Moreover, students are more likely to pursue college education when they are informed about the financial resources accessible to support their expenses.

Further, students with a financial literacy course under their belt tend to have better average credit scores and lower debt delinquency rates as young adults.

Not just this, it’s also linked to your wealth. It is believed that there is a positive correlation between teenage financial literacy and the accumulation of assets and net worth by the age of 25.

Adults with higher levels of financial literacy experience less difficulty in meeting their expenses each month, are more inclined to make full and timely loan payments, and are less likely to be burdened by debt or classified as financially vulnerable.

Moreover, they are more inclined to save money and prepare for retirement.

The most important thing is to choose the right course. We present to you the Morning Download Financial Freedom Course designed for people that wish to achieve financial freedom and retire easily.

💰 Be a Better Investor

“When money realizes that it is in good hands, it wants to stay and multiply in those hands.”

Idowu Koyenikan

Resources:

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