This week ahead || Dec 18th - Dec 22nd 2023
Tesla: 3 things that defined the automaker's big year
Tesla's 2023 was marked by significant events, influencing its stock and setting the stage for an intriguing 2024. Price cuts, especially in China, and later in the US and Europe, aimed at boosting demand and qualifying for EV tax credits, impacted Tesla's margins. The company's move to reduce prices was seen by some as necessary, while others criticized it for affecting margins. The surprising collaboration between Tesla and Ford, allowing Ford EVs access to Tesla Superchargers, reshaped the EV charging landscape. The long-awaited Cybertruck launch brought new prospects for Tesla, although challenges in production remain. Looking ahead to 2024, potential highlights include improving gross margins, the impact of the Cybertruck's halo effect on other models, the unveiling of Tesla's next-gen $25,000 vehicle, and potential benefits from the Federal Reserve's interest rate projections. However, concerns persist about the impact of CEO Elon Musk's statements on Tesla's brand.
Fed’s Goolsbee says too early to declare victory over inflation
Austan Goolsbee, a member of the White House Council of Economic Advisers, emphasized the ongoing caution regarding the Federal Reserve's interest rate decisions, noting that while progress has been made in 2023, it's essential to focus on the data. Goolsbee highlighted the need to bring inflation down to the Fed's 2% target before considering rate adjustments. Despite market expectations of rate cuts next year, Goolsbee urged a data-driven approach, and he did not rule out the possibility of a rate cut in March. The Federal Reserve left rates unchanged in December and signaled a potential path of rate cuts in 2024, triggering market reactions. The upcoming release of inflation data will provide policymakers with fresh insights into the economic landscape.
Nissan to export China-developed EVs to global markets
Nissan Motor has announced plans to sell China-developed electric vehicles (EVs) globally and is exploring the export of existing internal combustion engine vehicles and upcoming EVs manufactured and developed in China to overseas markets. The Japanese automaker aims to leverage local resources and accelerate research and development on electrification through a collaboration with China's Tsinghua University. Nissan faces challenges in China's competitive auto market, with the country accounting for just over a fifth of its worldwide sales in the first 10 months of the year. The company plans to establish a joint research center with Tsinghua University in 2024, focusing on EV research and development.
US court orders new FTC review of Illumina's Grail deal
A U.S. appeals court has overturned a Federal Trade Commission (FTC) order against Illumina's acquisition of Grail, a cancer diagnostic test maker. The court stated that the FTC applied the wrong legal standard, requiring the agency to reconsider the deal. The court acknowledged the FTC's evidence that the deal could reduce competition in the market for a blood test to detect various cancers but noted that the agency failed to properly consider Illumina's commitment to selling its DNA sequencing services to other firms. Illumina closed the acquisition of Grail in mid-2021 despite regulatory challenges in the U.S. and Europe.