On the stock market, the S&P 500 and Nasdaq hit new highs during the holiday-shortened trading week, while small-cap stocks fell slightly. Tesla TSLA surged after beating lowered delivery forecasts, while U.S. auto sales were modest. General Motors (GM) and Ford (F) reported strong growth in EV sales. Chinese EV makers reported record sales, or at least increases in sales.
Eli Lilly (LLY) and Novo Nordisk Lilly won FDA approval for its Alzheimer’s drug donanemab, but NVO faced some negative headlines. Employment reports and other economic data suggested slowing growth and easing inflationary pressures.
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Major banks start earnings season next week
S&P 500, Nasdaq hit new highs
The S&P 500 and Nasdaq were above key levels, with the Nasdaq slightly extending its gains. Tesla TSLA led the gains in those indexes, along with semiconductors and software. Economic data bolstered hopes of a rate cut. Treasury yields, which rose sharply earlier in the week, offset those gains. Copper futures surged.
Jobs report confirms slowdown
Friday’s June employment report finally caught up with a growing pile of lackluster economic data. The U.S. added 206,000 jobs in June, slightly more than expected. But the private sector added 136,000 jobs, well below expectations. Annual wage growth was at a three-year low of 3.9%. Meanwhile, the four-week average of initial jobless claims rose to a nine-month high. The ISM services sector index plunged from 53.8 to 48.8, below the neutral level of 50. In the short term, the Fed appears poised to turn to rate cuts. Federal Reserve Chairman Jerome Powell said Tuesday that inflation data from the past two months indicates that “we are returning to a disinflationary trajectory.”
Tesla surges on deliveries and storage
Tesla Tesla’s stock price soared as the company continued to deliver strong results, beating analysts’ revised expectations by a wide margin despite a 4% year-over-year decline in second-quarter deliveries. Deliveries in the second quarter totaled 443,956 vehicles, up 15% from the first quarter, with 422,405 units being delivered by the Model 3 and Model Y. Sales of other models, including the Model S, Model X, and Cybertruck, totaled 21,551 units. Production came in at 410,831 vehicles, allowing Tesla to reduce inventory. Tesla also announced that it had deployed 9.4 gigawatt-hours (GWh) of energy storage products, more than double the first quarter’s record of 4.053 GWh.
American Auto Sales
U.S. new-vehicle sales rose just 0.1% in the second quarter from a year earlier, industry data showed, and experts say high interest rates and prices continue to curb demand. General Motors (GM) and Ford (F) U.S. sales increased less than 1 percent, respectively. Toyota Motor Corporation TM sales rose 9 percent, with hybrids continuing to drive growth, but sales at the parent company of Jeep and Chrysler fell 21 percent. Stellantis (STLA). GM’s EV sales rose 40% to a record in the second quarter as production issues with Ultium EV finally eased. Ford’s EV sales increased 61%, moving it into second place in the U.S., while hybrids also surged. Both GM and Ford signaled they are taking EV share from Tesla, which still dominates in the U.S.
EV sales on the rise in China
Tesla’s Chinese rivals BYD (BYDDF), Nio (NIO) and Zeekle (ZK) delivered record quarterly shipments. Lee Auto (LI) and XPeng BYD (XPEV) also reported higher sales in the second quarter. China’s EV market continues to recover from a soft start to the year on the back of subsidies, discounts and incentives. This year, BYD has led a new price war in China as well as further expanding its overseas expansion, opening a Thai factory on July 4th. In the second quarter, BYD sold nearly 1 million electric vehicles. Amid global hybridization and the shift to more advanced hybrid systems with much better range, sales of plug-in hybrids will surpass pure battery electric vehicles in 2024. BYD’s BEV sales increased but fell short of Tesla’s.
Rivian deliveries surge, VW in the headlines
Rivian reported second-quarter EV deliveries of 13,790 vehicles, a week after forecasting a range of 13,000 to 13,330. The company produced 9,612 EVs in the second quarter and reaffirmed its full-year production target of 57,000. Volkswagen (VWAGY) and the EV startup are already in talks to expand the partnership from primarily software to hardware and joint production, which could include VW’s U.S. electric vehicle brand Scout. Rivian shares soared.
Eli Lilly, Novo Nordisk fall on news
In a joint op-ed on Tuesday, President Joe Biden and Sen. Bernie Sanders accused Big Pharma of selling diabetes and weight-loss drugs at “exorbitantly high” prices. Eli Lilly Eli Lilly & Co. received Food and Drug Administration approval for its Alzheimer’s drug donanemab, now called Xanra. On Wednesday, a study from Harvard Teaching Hospital found links between a potentially blinding disease and diabetes and weight-loss drugs. Eli Lilly & Co. Novo Nordisk (NVO) retreated, but LLY erased its weekly losses and NVO pared losses to remain in the buy zone.
Boeing to acquire Spirit Aero
Boeing (BA) buys out suppliers Spirit AeroSystems It is acquiring Dow Jones aerospace giant Boeing in a stock swap at $37.25 a share for a total of $4.7 billion. The Dow Jones aerospace giant is looking to tighten control over its supply chain following recent safety lapses. Meanwhile, the Department of Justice is reportedly planning to charge Dow Jones aerospace giant with fraud and is asking Boeing to plead guilty to criminal charges.
overview
European regulators Meta Platform Meta only allows users to opt out of ad tracking by paying for subscription products, violating digital competition rules.Meta launched paid ad-free versions of Facebook and Instagram in the EU late last year.Meta didn’t mind the news and jumped into the buy zone.
Sea Limited (SE) agreed to make some changes to its Shopee e-commerce business through a deal with Indonesia’s antitrust regulator, which has accused the Southeast Asian internet services company of unfairly favoring its delivery services for customer orders on Shopee. Sea’s shares, which initially fell, sharply pared their weekly losses.
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