What Happened?
Shares of electric vehicle pioneer Tesla (NASDAQ:TSLA) jumped 4.2% in the morning session as equities soared (Nasdaq +0.9%, S&P 500 +0.55%) after The Bureau of Labor Statistics reported nonfarm payrolls for September 2024, which exceeded expectations. Notably, nonfarm payrolls increased by 254,000, significantly surpassing the consensus estimate of 150,000. In addition, the unemployment rate clocked in at 4.1%, slightly below analysts' expectations of 4.2%.
Overall, the report supports the Fed's favored "soft landing" narrative, suggesting that inflation can be controlled without significantly harming the economy.
As a reminder, Tesla will hold the highly anticipated Robotaxi Day event on October 10, 2024. Investors could be positioning their holdings ahead of that. Notably, Tesla is expected to discuss its advances in artificial intelligence, self-driving technology, and plans to start a robotaxi service. After the initial pop the shares cooled down to $248.88, up 3.4% from previous close.
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What The Market Is Telling Us
Tesla’s shares are very volatile and have had 27 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was a day ago when the stock dropped 4.1% on the news that the company is recalling up to 27,000 Cybertrucks in the U.S. due to "rearview camera image delays." Following the recall, updates to fix any potential issue can be expected to be deployed through service centers and sometimes over the air via software updates.
Also, there are reports that Tesla no longer lists a version of the Model 3 (standard range, rear-wheel-drive for sale in the U.S.) on its website. Overall, the updates aren't encouraging and suggest Tesla might face a tough hurdle in beating expectations heading into the last quarter of the year.
Tesla is up 0.2% since the beginning of the year, and at $248.88 per share, it is trading close to its 52-week high of $263.62 from October 2023. Investors who bought $1,000 worth of Tesla’s shares 5 years ago would now be looking at an investment worth $16,132.
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