🚗 Tesla Under Pressure: Crash or Correction?

Tesla has been underperforming since mid-December, despite having surged post-election. A key point? Musk’s support of the Trump Administration initially drove flows into the stock, but recent months have seen a retreat.

• Short-Term View: After spiking very hard after the elections, Tesla has tracked the “Fabulous 7” closely over a 3-4 months period.

  

   

• Long-Term View: Over a decade, Tesla has massively outperformed the S&P 500 .

  

   

• Valuation Debate: Bulls see a multi-trillion-dollar future (robotaxis!), while bears argue it’s just another auto stock—implying a price around $500.
• Technical Target: Eyes on $180–185. Sales are slipping in China and elsewhere.

📊 Macro Market Snapshot

• YTD Performance:
  • S&P 500: Down 4%
  • NASDAQ: Down 8%
  • Europe: Strong, buoyed by Germany’s €500B “fiscal bazooka” over 10 years.
• Recession Fears?
  • GDP expectations for 2025 have been revised down to 1.5% by big players like JP Morgan and Goldman Sachs.
  • Normal corrections are 5-10%, but 30-40% drops signal recession.

    

     

• Commodities & Currencies:
  • Gold: Above $3,000
  • Oil (WTI): Stable at $66-69
  • Copper: New highs

    

     

  • Turkish Lira: Volatile, driven by poor liquidity and political factors.

📈 Sector & Asset Class Performance

• Winners: Energy (+3% for the week), Brokers, Airlines (cyclicals).
• Laggards: Silver, Utilities, Consumer Staples.
• Financials: Holding up, but watch JP Morgan’s chart—recent weakness flagged.
• Momentum Stocks: Outperforming, despite broader market choppiness.

🧩 Interest Rates & Inflation

• 10-Year Yield: 4.25%, stuck in the 4.10–4.70% range.
• Fed’s Take: Lower growth, higher inflation expectations (tariffs incoming).
• Bond Supply: Surging due to deficits; yields may rise further.
• Rate Cuts: Market pricing in 2.5 cuts for 2025, first cut expected July.

🧮 Technical Analysis Highlights

• S&P Futures: Consolidating post-selloff; 6150 to 5500 drop was the “easy” move.
• NASDAQ Futures: Weak consolidation—feels like it could head lower, though seasonality is a plus.

  

   

• Oil (WTI): No real change since September, despite election noise.
• Fabulous 7: Underperforming, minor rebound driven by end-of-session rebalancing (Apple, Microsoft).

🎯 Recent Trade Ideas & Hits

• Accenture Short: Called out in December due to exposure to government contracts—played out perfectly after earnings.
• Capgemini Short: Another successful call in Europe.

📅 What’s Ahead: Key Catalysts

• Flash PMIs (Monday): Services slipping, manufacturing improving.
• PCE Inflation (Friday): Watch for impacts from tariffs.
• UK Budget (Wednesday): Potential volatility for UK/EU bonds.
• Earnings to Watch: Lululemon (Thursday).
• Tariff Watch: April 2nd—mark your calendar, could drive volatility.
• Market Magnet: S&P 500 potentially gravitating around 5560 until end of the month due to the J.P. Morgan collar.

  

   

Final Word

Markets are in a wait-and-see mode—volatility has dipped, but risks remain. Watch inflation, bond markets, and key economic indicators closely. If credit markets wobble, expect the Fed to step in.

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Greg📩 Contact: greg@duponttrading.com

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