Tesla Stock Drops after Disappointing Fourth-Quarter Results
Tesla stock plummeted 8% in premarket trading after the company reported fourth-quarter revenue and profit that fell short of analysts’ expectations. The electric vehicle company also issued a warning that its vehicle volume growth in 2024 could be significantly lower than last year’s growth rate. Despite this news, Tesla’s automotive revenue only saw a 1% increase from the previous year, partly due to the company implementing steep price cuts in the second half of 2023. In a recent presentation, Tesla stated that it is currently between two major growth waves, causing uncertainty among investors.
Economic Slowdown in the U.S. Expected as GDP Growth Slows
Wall Street economists believe that the U.S. economy may experience a more noticeable slowdown in the near future. The U.S. Commerce Department is set to release its fourth-quarter gross domestic product (GDP) report, with analysts expecting a growth rate of 2% on a seasonally adjusted annualized basis. This would be a decrease from the 4.9% growth rate seen in the previous quarter and the lowest reading since the second quarter of 2022, which saw a decline of 0.6% in GDP. As investors digest the fourth-quarter report, attention will shift towards consumer spending and inflation, and what this means for growth prospects in 2024.
Alaska Airlines Faces $150 Million Loss Due to Boeing 737 Max Grounding
Alaska Airlines revealed that the grounding of Boeing 737 Max 9 planes will result in a $150 million cost to the company. The Max 9s were grounded after a door plug blew out during a flight, causing a hole in the side of the aircraft. Alaska Airlines had anticipated a capacity growth of 3% to 5% this year but now expects growth to be at or below the lower end of this range. This announcement comes as the Federal Aviation Administration cleared the path for the planes to return to service but halted Boeing’s plans to increase production.
Netflix Leads Tech Rally with 10% Gain After Strong Earnings Report
Netflix experienced a significant surge in stock price, rising over 10% after reporting strong earnings. The streaming giant’s positive performance contributed to the fifth consecutive day of gains for the Nasdaq Composite, which finished the day 0.36% higher. The S&P 500 also reached a new all-time closing record, increasing by a marginal 0.08%. However, the Dow did not participate in the rally, dragged down by declines in Verizon and 3M following their earnings reports. Netflix’s strong earnings report showcases the growing demand for streaming services as more people embrace digital entertainment.
Analyst comment
1. Tesla Stock Drops After Disappointing Fourth-Quarter Results – Negative news. Analyst prediction: The market for Tesla stock is likely to continue to decline as investors react to the disappointing results and uncertain growth prospects.
2. Economic Slowdown in the U.S. Expected as GDP Growth Slows – Negative news. Analyst prediction: The market may experience a downturn as investors worry about the slowdown in economic growth and its implications for consumer spending and inflation.
3. Alaska Airlines Faces $150 Million Loss Due to Boeing 737 Max Grounding – Negative news. Analyst prediction: Alaska Airlines may see a decline in its stock price as investors react to the anticipated loss and lowered growth expectations due to the grounding of Boeing 737 Max 9 planes.
4. Netflix Leads Tech Rally with 10% Gain After Strong Earnings Report – Positive news. Analyst prediction: The market for Netflix stock is expected to continue to perform well as the strong earnings report showcases the increasing demand for streaming services.
