Daily market analysis

Forex Market Analysis: Dollar and Tesla 25 Jan 2024

January 25, 2024

Forex Markets Analysis: 25 Jan 2024

CURRENCIES:

  • U.S. Dollar faced a decline despite positive economic data on Wednesday
  • Potential for a reversal in the dollar’s fortunes in the upcoming days
  • Market attention shifts to the fourth-quarter U.S. GDP report

U.S. Dollar Technical Outlook:

  • Analysis focuses on three major FX pairs: EUR/USD, USD/JPY, and GBP/USD
  • Despite better-than-expected PMI results, the dollar retreated
  • Possibility of a turnaround if key economic data continues to surprise positively

Fourth-Quarter U.S. GDP Report:

  • Scheduled for release on Thursday
  • Forecasted economic activity expansion of 2% at an annualized rate
  • GDP considered backward-looking but provides insights into economic health

Key Points to Monitor:

  • Close attention to household expenditures, a significant growth engine
  • Consumer spending remains robust, contributing to a positive GDP outlook
  • A strong GDP report could impact expectations of a Fed rate cut in March

Implications for the U.S. Dollar:

  • Positive GDP scenario may reduce odds of a Fed rate cut
  • Traders could adjust dovish expectations for the FOMC’s policy path
  • Potential for a more favorable backdrop for the U.S. dollar

STOCK MARKET:

Tesla Q4 Earnings Overview:

  • Stock drops due to earnings miss and a cautious full-year production outlook
  • CEO Elon Musk confirms the launch of the company’s next-gen vehicle in H2 2025

Financial Performance in Q4:

  • Top-line revenue of $25.17 billion, slightly below the estimated $25.87 billion
  • Revenue increased by approximately 3% compared to the previous year
  • Adjusted EPS at $0.71, missing the estimated $0.73
  • Adjusted net income of $2.486 billion, falling short of the $2.61 billion expected by the Street

Full-Year Production Outlook:

  • Tesla anticipates a notably lower vehicle volume growth rate compared to 2023
  • Launch of the next-gen vehicle at Gigafactory Texas cited as a reason for the production slowdown
  • Unlikely to meet Street estimates of 2.19 million vehicle production for 2024, signaling a 21% increase from 2023

Next-Gen Vehicle and Production Plans:

  • Progress on the next-gen platform highlighted in the earnings release
  • Musk emphasizes the revolutionary manufacturing system for the low-cost vehicle
  • Production of the next-gen vehicle scheduled for the second half of 2025

Factors Contributing to Profitability Drop:

  • Downward pressure on margins due to cost-cutting efforts initiated in late 2022
  • Q4 gross margin at 17.6%, below the estimated 18.1% and a decline from the previous year
  • Various challenges, including Hertz shedding EVs, price cuts in China, production halt in Berlin, and Musk’s stock demand, impacting profitability

Delivery and Production Statistics:

  • Q4 deliveries surpass Street estimates with 484,507 deliveries
  • All-time record quarter for Tesla, beating the previous record of 466,000 units in Q2 of the last year
  • Yearly vehicle deliveries grow by 38% to 1.81 million, production increases by 35% to 1.85 million

Cybertruck and Musk’s Concerns:

  • Cybertruck deliveries not specified, but demand described as “off the hook”
  • Musk addresses concerns about securing greater control for AI ambitions, citing potential loss of influence in the future
  • Expresses worries about being voted out by shareholder advisory firms like ISS and Glass Lewis

Elon Musk’s Recent Activities:

  • Speaks at a symposium about antisemitism in Krakow, Poland, on January 22, 2024
  • Highlights his desire to be an effective steward of powerful technology, expressing concerns about potential loss of control due to shareholder decisions.

Styliana Charalambous
Market Analyst

My name is Styliana Charalambous, possessing a professional qualification as a Chartered Certified Accountant and a Bachelor’s Degree in Accounting and Finance. Highly motivated financial analyst with expertise in audit and investment strategies. I have several years of experience in the finance industry, as an audit supervisor at KPMG and the Head of Investment & Market Research in a multinational Fintech company.

Passionate about personal finance, investing, and creating finance content on social media. Lecturer in Accounting & Finance at Canterbury Christ Church University. I am the Founder and CEO of Selfmade Academy, an organization that helps thousands of students worldwide to plan for their financial future and make smart decisions about their money

This site uses cookies to provide you with a great user experience.
By using www.vtmarkets.net, you accept
our cookie policy.