Elon Musk, AI and the start of earnings season will shake up the markets

Elon Musk is getting a lot of attention. The CEO of Tesla (TSLA) he emerged as a hyperactive entrepreneur with a reputation built on the success of the electric car company he built, Space X, and other ventures.

This week, Musk and Tesla will be in the spotlight. On Thursday, Musk and Tesla will unveil plans for the new Robotaxi at the Warner Bros. studio. from Los Angeles.

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It’s a key event for Musk and the troubled company. Shares fell 44% between the end of 2023 and April 22 on concerns about stagnant sales. Since April 22, the stock is up 76% and actually up 0.64% for 2024.

Tesla’s event is just one in a week full of corporate events, investor meetings, economic reports and the unofficial start of third-quarter earnings season.

Jobs report cheers investors

Stocks ended last week with small gains, mainly due to investors cheering a very upbeat jobs report from the Labor Department on Friday.

The S&P 500 ended the week up 0.2%. The Nasdaq Composite added 0.1 percent and the Dow Jones Industrials ended up 0.1 percent.

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Three issues seemed to be weighing on stocks:

• Concerns that the growing violence in the Middle East will erupt into a major war. The price of oil rose by 9% during the week. Retail gas prices continued to fall.
• A surprise rise in interest rates after the Federal Reserve’s decision on September 18 to cut its key interest rate by half a percentage point.
• National tensions rising over presidential election.

The Tesla event is important, especially for Tesla

Tesla shares, despite their huge gain in April — including a 22% gain in September — still ended the week down about 4%.

September’s earnings reflected more confidence that Tesla had regained its mojo ahead of the Robocar unveiling.

Elon Musk has been championing the idea of ​​Robotaxi for months, arguing that the idea would revolutionize transportation, especially in urban areas.

It would boost Musk’s claim that Tesla is an artificial intelligence company. Many analysts shake their heads at the idea, saying that Tesla is a car company.

More Teslas:

• Analysts praise Tesla’s revolutionary rival, robotaxi event preview
• One of Tesla’s big, great ideas may finally become a reality
• Goldman Sachs analyst revises Tesla stock price target ahead of key events

Its Robotaxi (and cars and Cybertrucks, for that matter) are really the physical manifestation of a vast network that takes data from every Tesla vehicle and uses it to provide information to drivers on the safest and most efficient routes to a destination .

The risk Musk faces this week is that he proves unable to convince customers, Tesla fans and investors that the vehicle will work, although Waymo’s taxi appears to be working in San Francisco.

Many details are unclear, such as:

• When will a production model be available.
• Who might want to operate a Robotaxi. Uber, maybe the vehicle owners, or even Tesla itself.
• How a launch might work.

Tesla is not a pioneer in robotaxis. Waymo, owned by Google parent Alphabet (GOOGLE) provided services in San Francisco, Los Angeles and Phoenix, Arizona.

There were errors and accidents. In May 2023, a self-driving Waymo vehicle in San Francisco killed a dog, according to a Guardian report.

Pedestrians exit a Waymo self-driving car in front of Google headquarters in San Francisco.

Smith/Gado/Getty Images Collection

AMD has a big day on Thursday as well

Semiconductor manufacturer Advanced Micro Devices AMD is holding the Advancing AI event to showcase products such as AMD Instinct accelerators and EPYC server processors.

Barrons noted that the presentation will also offer networking and updates to its AI personal computer.

AMD shares are up about 16% in 2024 (compared to the Nasdaq’s 20.8% gain), but it’s fighting an uphill battle to gain recognition and customers.

Earnings season starts this week

If the second-quarter earnings season seems to be taking forever, the third-quarter reports will start rolling in in a big way.

Beverage and snack giant Pepsico (PEP) report their results Tuesday morning. The Street estimate is $2.30 per share, down from $2.35 a year ago.

Things get more interesting on Thursday when India’s software giant Infosys (INF) and Delta Air Lines (DAL) and Domino’s Pizza (DPZ) report.

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Friday is the big day when lots of financial giants report, including JP Morgan Chase (JPM) Wells Fargo (WFC) insurer Progressive Corp. (PGR) money manager BlackRock (BLK) and Bank of New York Mellon BNY come out with results.

Pay attention to the talks companies are giving about how they see the US economy. Friday’s jobs report, which showed nonfarm payrolls rose by 254,000 in September, was much more upbeat than expected.

The revisions in the October jobs report will tell us more.

Economic reports and discussions with the Fed

The week ahead offers some economic reports that can easily move the markets:

Consumer price index for September, due on Thursday. Along with the core CPI. The consensus estimate is for the index to rise 2.3% from a year ago. That’s close enough to keep the Fed happy.

Producer price index for Septemberdrops on friday This gauge of inflationary pressures facing businesses is also projected to show lower inflation.

Consumer sentiment. The University of Michigan’s preliminary October consumer sentiment index is due on Friday. This helps gauge whether consumers are confident in the coming months.

Speakers Fed. All week. All but Fed Chairman Jerome Powell will speak sometime next week. Fed governors’ comments are posted on the Federal Reserve website. The presidents of the 12 Federal Reserve banks post their texts on their banks’ websites. Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, caused stocks to plummet last spring when he suggested they might need to be boosted because of sticky inflation.

Feeding minutes. It is being prepared on Wednesday and can be found here. This is a summary of the September meeting that led to the Fed’s rate cut decision. The talk description is always towards the end of the minutes.

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