DHUnplugged #699: Flesh Wound DHUnplugged Podcast

Markets having a tough time and a big week of data is coming.

Got the 5% correction - is there more?

M&A - Another deal dies

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Warm Up
- Markets having a tough time
- Happy Passover!
- SHOW 700 coming up!
- Happy belated 420 Day to our fine smoky listeners
- Jumping to Conclusions
- We have a limerick!

Market Update
- Big week(s) coming for economics
- Got the 5% correction - is there more?
- M&A - Another deal dies
- Earnings - Tech on deck
- Historic Treasury Auction this week - need to pay the bills since tax receipts not doing it and lots of debt outstanding

Who Would think???
- UK - FTSE 100 at all-time high!

Recap:
- Microsoft Corp., Meta Platforms Inc., Google parent Alphabet Inc. and Tesla Inc., all of which are among the so-called Magnificent Seven group of tech giants, will report THIS WEEK week.
- Technology stocks are selling off, with the Nasdaq 100 Index registering its biggest weekly drop since November 2022 in the midst of a four-week losing streak, its longest since December 2022.
- Even AI darling Nvidia Corp. is getting hit, plunging 10% on Friday and wiping out $212 billion in market value for its worst day since the Covid pandemic in March 2020.

MAG7 Profit Outlook
- But hope is on the horizon. Profits for the Mag Seven — which also includes Apple Inc., Amazon.com Inc. and Nvidia — are forecast to rise 38% in the first quarter from a year ago, dwarfing the overall S&P 500’s 2.4% anticipated year-over-year earnings growth, according to Bloomberg Intelligence data.
- Around 178 S&P 500 companies — representing more than 40% of the index’s market capitalization — will post results next week. But the biggest expectations are for megacap tech firms.
= = Nvidia, which Goldman Sachs Group Inc.’s trading desk dubbed “the most important stock on planet Earth,” doesn’t report its earnings for another month.

Tesla
- Stock down a lot - DOWN 43% YTD
- Down 65% from high set November 2021
- Tesla is recalling nearly 3,900 of its Cybertrucks due to an issue with the vehicle's accelerator pedal.
- The recall, announced Wednesday, was prompted by accelerator pedal pads in the trucks that "may dislodge and cause the pedal to become trapped by the interior trim,"
- All of the 3,878 of the 2024 Cybertrucks that Tesla built between Nov. 13 and April 4 are subject to the recall, the electric vehicle maker’s safety recall report said.
- And then: Tesla on Saturday slashed the price of its Full Self-Driving (FSD) driver assistant software to $8,000 from $12,000 in the United States, as CEO Elon Musk reaffirms his commitment to self-driving technology.
- Musk is betting the technology will become a major source of revenue for the world's most valuable automaker. But he has for years failed to achieve the goal of self-driving capability, with the technology under growing regulatory and legal scrutiny.
----- Could be a short squeeze setting up for earnings (Tonight) - READ MORE>>>>>

Tesla Earnings
- Tesla misses by $0.04, misses on revs, gross margin down 199 bps yr/yr, reiterates that in 2024, vehicle volume may be notably lower than the growth rate achieved in 2023
- Total GAAP gross margin of 17.4%, down 199 bps yr/yr.
- Operating expenses up 37% yr/yr to $2.53 bln.
- Total Deliveries down 9% to 386,810.
- Outlook: Co states, "Our company is currently between two major growth waves: the first one began with the global expansion of the Model 3/Y platform and we believe the next one will be initiated by advances in autonomy and introduction of new products, including those built on our next generation vehicle platform.