CURRENCIES:

US Dollar Impact and Economic Indicators

Recent weak PMIs have unsettled the US Dollar.
Key economic indicators this week include Q1 GDP on Thursday and Core PCE on Friday.
Despite a dip, potential for a short-lived US Dollar sell-off exists.
Early Q2 shows a slowing US economic upturn, as reported by S&P Global.

US Economic Performance and Projections

Early Q2 shows a slowing US economic upturn, as reported by S&P Global.
Business activity growth was below trend in April.
New business inflows decreased for the first time in six months.
Business output expectations have declined, hitting a five-month low amid growing economic concerns.

US Treasury Yields and Market Movements

Shorter-dated US Treasury yields have decreased following the PMI report but remain high.
The 2-year yield struggled to surpass 5%; rate cut expectations have reduced significantly.
A total of $183 billion in new US Treasuries will be auctioned this week.
Poor auction results could increase existing US Treasury yields.

Technical Analysis

The US 2-year yield chart suggests a possible bullish flag formation, indicating a potential re-test of the 5.26% high from October 19th.

STOCK MARKET

Tesla Stock Performance and Strategic Shift

Tesla stock surged in pre-market trading following the announcement to accelerate the launch of more affordable electric vehicles (EVs).
This move contrasts earlier reports suggesting the company might abandon plans for cheaper car models.

Corporate Announcements and Timeline Adjustments

In the first-quarter shareholder release, Tesla updated its vehicle lineup to introduce new models sooner than planned, originally set for the second half of 2025.
CEO Elon Musk indicated on the earnings call that the launch of new vehicles could happen as early as 2025, potentially even later this year.

Financial Performance and Market Reaction

Despite missing revenue and earnings expectations, Tesla’s announcement positively impacted investor sentiment, with shares rising up to 11%.
Tesla reported first-quarter revenue of $21.30 billion, down 9% year-over-year, marking the first decline in four years.

Operational Highlights and Future Projections

First-quarter results showed $1.2 billion in operating profit and $1.5 billion in adjusted net income, both below forecasts and significantly lower than the previous year.
Delivery guidance remains lower, consistent with previous statements, reflecting challenges in production and demand.
Tesla introduced a ridehailing feature in its app previewing the upcoming Tesla robotaxi service.

Production and Sales Challenges

Q1 global deliveries and production numbers were below expectations, indicating potential weakening in global demand.
Recent price reductions in the US and China were responses to sluggish sales, impacting the stock negatively earlier in the week.

Key Dates and Future Events

Tesla plans to discuss its cheaper EV models and robotaxi service in more detail on August 8, the scheduled reveal date for the robotaxi.

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