🚗 Uber Cruises, Tesla Snoozes

Plus, a digital revolution looms over tax season — are you ready for the shift?

October 15, 2024

Happy Tuesday afternoon to everyone on The Street. Here's a snapshot of where markets ended the trading session, plus tomorrow's trade idea delivered to you today.

  • 🟥 | US stocks fell Tuesday. Why? Disappointing earnings from a handful of companies. ASML specifically dragged sentiment lower. More on that below.

  • 📈 | One Notable Gainer: Walgreens Boots Alliance stock surged nearly 16% after beating Q4 earnings and revenue and announcing plans to close 1,200 stores over three years to boost adjusted earnings and cash flow.

  • 📉 | One Notable Decliner: UnitedHealth shares dropped more than 8% after lowering its full-year earnings forecast due to a cyberattack, despite exceeding third-quarter expectations.

  • 🚗 | Tomorrow's Trade: Uber Cruises, Tesla Snoozes. Scroll down for more.

Plus, today’s sponsor thinks he has identified his next “Magnificent Seven”…

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S&P 500 Heatmap. Credit: Finviz

All Stock Heatmap. Credit: Finviz

Global ADR snapshot. Credit: Finviz

MARKET MOVERS

ASML (-16.3%) Chip firm ASML shares plunge after warning of weaker China sales in early release (CNBC)

WOLF (+20.1%) Biden administration announces $750 million investment in North Carolina chipmaker Wolfspeed (CBS News)

ENPH (-9.3%) Enphase Energy Downgraded: Analyst Cites Competitive Pressures And Market Share Loss In Inverter Segment (Benzinga)

COTY (-10.7%) Coty Shares Reach 52-Week Low on Beauty Market Slowdown Warning (DJN)

NVDA (-4.7%) Nvidia stock tumbles from record high on news of possible US chip export cap, ASML's dismal earnings (YF)

OVERHEARD ON THE STREET

Fox Business: American consumers' expectations about the risk of debt delinquency rose to the highest level in more than four years last month, while concerns about elevated inflation over the longer-term also increased, according to a report released Tuesday by the Federal Reserve Bank of New York.

Bloomberg: Investment banking could be a bright spot for earnings. That’s according to Gerard Cassidy of RBC Capital Markets who expects M&A activity to pick up and says many banks are well-positioned to benefit from lower interest rates.

MarketWatch: US economic growth should moderate in 2025 but remain relatively strong, and the unemployment rate will look a little better, Harvard economist Karen Dynan said Tuesday.

Bloomberg: LVMH is expecting to pay as much as €800 million ($870 million) in additional taxes next year after France announced plans to raise levies on its biggest companies to help shore up public finances.

Fox Business: The National Retail Federation (NRF) projected that holiday spending will increase this year to a new record, totaling between $979.5 billion and $989 billion, as consumers lean on e-commerce.

TOMORROW’S TRADE IDEA, TODAY

Uber Isn’t Worried About Tesla

More Questions Than Answers

Tesla’s (TSLA) much-anticipated robotaxi event over the weekend wasn’t exactly a car crash. That would imply you couldn’t look away. It was more like a car with slashed tires — deflated and going nowhere.

Musk did not go into much detail about the new service, leaving investors with more questions than answers. Tesla’s shares dropped 9% on Friday as a result.

Uber (UBER), on the other hand, saw its stock price pop 11%. The stock had been falling as investors feared competition from Tesla, but Musk’s underwhelming presentation suggests it may be blue skies and open road ahead for Uber.

Long Road Ahead?

Musk is facing an uphill battle to get Tesla’s Cybercabs fully operational, per a Wall Street Journal report. On top of needing to build the vehicles, Tesla will also have to secure certification for fully unsupervised self-driving in any state it wishes to sell them. This process can take years.

Musk has claimed that Tesla will begin offering full self-driving capabilities for its Model 3 and Y vehicles in both California and Texas by next year. But analysts — who might remember how many Cybertruck release dates came and went before deliveries finally began late last year — are skeptical that this is possible.

Heavy Is the Hood

Despite strengthening operations and cash flows, Uber’s shares have struggled lately. Heavy is the hood that wears the crown, and high expectations have weighed on the rideshare king’s market value.

However, some analysts believe that the threat from Tesla was the last thing holding the stock back from a rally. Now that concern may have receded into the rearview.

Uber already has a massive user base, and it has inked deals with autonomous vehicle makers such as Alphabet’s (GOOGL) Waymo to use its app. While investors might think twice before betting against Elon Musk, some market observers would argue Tesla won’t be challenging Uber’s dominance any time soon.

Are you bullish or bearish on Uber (UBER) over the next 12 months?

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ON OUR RADAR

WSJ: The International Energy Agency trimmed its forecast for this year’s oil-demand growth for the third month in a row, as a rapid slowdown in Chinese consumption weighs on the global outlook.

Axios: The IRS Direct File program expands to 24 states in 2025, offering free online tax filing to 30 million eligible taxpayers, potentially disrupting the tax prep industry and saving millions in fees.

WSJ: Home builders are offering mortgage rate buydowns and price cuts to attract buyers amid high mortgage rates, but these strategies are raising concerns about profitability and long-term sustainability.

QZ: Google is partnering with nuclear startup Kairos Power to deploy small modular reactors by 2030, aiming to add 500 megawatts of carbon-free energy for its AI-driven data centers.

WSJ: Flat merit raises and rising healthcare costs will squeeze paychecks in 2025, with many employees facing eroded salary gains and needing to consider total compensation beyond just salary.

MONDAY’S POLL RESULTS

🟩🟩🟩🟩🟩🟩 🐂 Bullish

🟨⬜️⬜️⬜️⬜️⬜️ 🐻 Bearish

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