News

Shares of Tesla are down 6.7% in the pre-market after Elon Musk fought with the President over the weekend over the budget that was passed on Friday and cut out EV subsidies. Musk has long said he wasn’t against the move but it will undoubtedly hurt Tesla sales.

That move was expected but Musk used the bill to criticize Washington’s fiscal irresponsibility and said he would start a third political party called the “America Party” that would target a limited number of seats.

That prompted a message from Trump over on his social media platform that said:

“I am saddened to watch Elon Musk go completely ‘off the rails,’ essentially becoming a train wreck over the past five weeks.”

Tesla is currently trading in the pre-market at $293, which is just below last Wednesday’s intraday low of $294.

Beyond that would be the June spike low of $273.

Fundamentally, there are some really big problems with Tesla as auto sales drop rapidly as Musk alienates his core supporters and his new supporters. His foray into politics increasingly saps time that should be spent on full-self driving, which was rolled out last week to a mediocre reception.

The future promise of the company is now humanoid robotics but that’s entirely untested in a company holding a $1 trillion market cap.

In terms of trading, there is massive options volume in Tesla that has turned it into something of a meme stock that works with squeezes and the hype machine rather than a view on future earnings. Tread carefully.

This article was written by Adam Button at www.forexlive.com.

However, the firm adds a caveat in saying that “if there is a benign outcome in US-EU trade talks, we will abandon our forecast of a July cut”.

Regardless, it’s still an interesting call. That especially after the ECB has sent quite a clear message on pausing through the summer at least. As things stand, markets are pricing in a ~90% probability of the ECB keeping rates unchanged for the 24 July policy decision.

This article was written by Justin Low at www.forexlive.com.

After choppy early trading, the USDJPY has shifted into a steady uptrend with minimal corrections. The day began with a dip during the Asian session, briefly pushing the pair below its 200-hour moving average (green line). However, buyers leaned against Friday’s low, reclaimed the 200-hour MA, and gained further momentum after breaking above the early session high near 144.63. That break triggered a stronger upside move that continues to stretch toward new highs.

Zooming out to the broader hourly chart, the pair is now approaching the 61.8% retracement of the June 23 high at 145.978, and a key swing area between 145.919 and 146.288. This upper region has proven to be strong resistance in recent months. While buyers have managed to push above it twice — in May and late June — each breakout attempt quickly faded, reinforcing the range’s upper boundary.

The wider range over the past two months spans 142.105 to 146.288 (see red box). A firm move above 146.288 would mark a decisive break and strengthen the medium-term bullish bias.

In the short term, support now comes in at:

• 145.347: 50% retracement of the June high-to-low move

• 145.216: last week’s high

Holding above these levels keeps the buyers in control intraday. A move below would ease bullish pressure and refocus attention on the 200-hour MA.

This article was written by Greg Michalowski at www.forexlive.com.

Cable is now down just 9 pips on the day after recovering more than 60 pips from the lows. It’s part of a broader US dollar slide in the last hour or so that’s unwound earlier USD gains (ex yen).

I think the cable chart does a good job of illustrating a few trends that are ongoing, and the biggest trend of the year — USD weakness. You’ll see three attempts to sell cable in the past week and all three have been picked up by bidders, including Thursday’s dip on non-farm payrolls.

Even when there is fundamental news underpinning a USD bid, sellers are appearing. To me there is an undercurrent this year of structural shifts out of the US dollar. Aside from the tariff drama, it’s not entirely clear why there is such a strong, steady shift even as US tech stocks rally to new highs but it’s persistent and real and underscored by the price action again today.

This article was written by Adam Button at www.forexlive.com.

Sector Overview

The US stock market illustrated a nuanced landscape today as various sectors displayed divergent trends. The technology sector showed mixed performance. Despite a slight dip in Microsoft (MSFT) by 0.23%, Oracle (ORCL) experienced a more significant drop of 2.30%, contributing to a bearish outlook in tech infrastructure.

Conversely, the consumer cyclicals sector showed resilience with Amazon (AMZN) edging up by 0.19%, indicating positive sentiment among investors.

Semiconductor Struggles and Automotive Impact

• 📉 Semiconductor Sector: Major names like Nvidia (NVDA) and Advanced Micro Devices (AMD) faced declines of 0.75% and 2.38% respectively. This mirrors concerns within the tech sphere.
• 🚗 Auto Manufacturers: Tesla (TSLA) notably fell by 6.81%, affecting the automotive section substantially, possibly fueled by external market pressures or internal company challenges.

Market Mood and Trends

The overall sentiment today depicted caution with a slight lean towards bearish trends within the tech domain, while consumer sectors showed optimism.

The mixed economic signals and fluctuating investor confidence reflect an environment of uncertainty, especially with key tech players showing weakness. Yet, some sectors like consumer cyclicals continue to display strength, hinting at broader economic resilience.

Strategic Recommendations

Given today’s market dynamics, investors should consider the following strategies:

• Diversifying portfolios to manage tech sector volatility while capitalizing on positive trends in consumer cyclicals.
• Paying close attention to upcoming quarterly reports from these companies to better gauge their long-term potential.
• Monitoring geopolitical and economic announcements that might sway market confidence further.

For a closer look at ongoing market shifts and detailed analysis, continue to explore insights here at ForexLive.com.

This article was written by Itai Levitan at www.forexlive.com.