The stock market sold off to start 2024, led by tech growth names, ending nine weeks of gains for the major indexes. But the S&P 500 and many leaders held key levels. The 10-year Treasury jumped as high as 4.1% after Friday's mixed jobs report, but pared gains.
Tesla reported record Q4 deliveries that slightly topped views, but fell amid earnings concerns. Meanwhile, China's BYD raced past Tesla in terms of battery electric vehicles in Q4. Li Auto led generally strong deliveries from other China EV makers. Eli Lilly and Novo Nordisk rose on various headlines for the weight-loss drug leaders. Mobileye plunged on weak guidance, knocking down other auto-related chipmakers. Concerns are growing about Apple iPhone demand.
The SEC was expected to approve spot bitcoin ETFs, a long-awaited move that had sent the digital currency and related stocks such as Coinbase and Marathon Digital soaring in recent months.
Stock Market Slides To Start 2024
The stock market saw losses to start the new year, led by the Nasdaq and tech growth leaders. The S&P 500 and many leading stocks were trying to find support at key levels. Medical stocks outperformed, including weight-loss drug makers, biotechs and health insurers. The 10-year Treasury moved back above 4%. Crude oil futures rose amid heightened Red Sea shipping fears.
Jobs Data Doesn't Derail Rate-Cut Hopes
Overall and private-sector payroll gains in December of 216,000 and 164,000, respectively, handily beat forecasts. But downward revisions of 71,000 to job gains in October and November mean that the trend is still moderating. Average hourly wages grew 0.44% in December, lifting annual wage growth to 4.1% from 4% in November. Both were slightly above forecasts. Other data pointed to slowing economic growth and easing labor markets. The JOLTS report showed the share of workers quitting their job in November around pre-pandemic levels. The ISM manufacturing index edged up slightly, but still signaled contraction in December. The ISM service-sector index fell 2.1 points to 50.6, just above the break-even level and below views. The jobs subindex tumbled.
Spot Bitcoin ETF
Bitcoin was volatile, but topped $45,000, a 20-month high, ahead of expected SEC approval of spot bitcoin ETFs, before retreating to below $44,000. The presumption is that spot ETFs will let institutional investors more readily participate in the crypto market and offer exposure to their customers. Crypto-related stocks also swung after huge gains in 2023. Cryptocurrency exchange Coinbase tumbled while bitcoin miner Marathon Digital reversed higher after several days of big losses.
Tesla Deliveries Top, But Now What
Tesla deliveries jumped to 484,507 in Q4, rebounding from Q3's 435,059 and exceeding Q2's record 466,140. That slightly topped views of just above 480,000. For the year, deliveries grew 38% to 1.81 million, just exceeding the company's 1.8 million target. But analysts had muted reactions, worried about continued price cuts' impact on Q4 margins and earnings, as well as the profit outlook for 2024. Tesla also cut the estimated range on several models in the U.S., including two Model Y trims.
TSLA stock fell solidly for the week.
Tesla Vs. BYD: TSLA Tests Support As Rival Wins EV Crown
BYD Is The New BEV Crown
BYD sold a record 341,043 EVs in December, pushing its 2023 sales to 3,012,906, topping its full-year target of 3 million EVs, including plug-in hybrids. BYD passenger sales of fully battery electric vehicles (BEVs) hit 190,754 in December, soaring to 526,409 in Q4. That bested Tesla for the first time. Total Q4 sales hit 942,779. Meanwhile Li Auto deliveries topped 50,000 for the first time in December. XPeng edged up to a fresh monthly peak of 20,155. Nio deliveries rose to 18,012 in December, exceeding its Q4 target. But shares of all four China EV makers fell.
Rivian reported Q4 deliveries of 13,972, just below views of 14,000. Full-year deliveries hit 50,122 with 57,232 vehicles produced. That was slightly below views. RIVN stock plunged.
U.S. Auto Sales
General Motors reported U.S. sales jumped 14.1% to 2.6 million vehicles, its best since 2019. That included 625,176 in Q4, up less than 1%. Ford reported U.S. sales of 1.08 million in 2023, up 7.1%, the best since 2020. GM's EV sales were disappointing vs. hopes a year earlier, with the bulk of purchases for its now-discontinued Bolt. Ford reported stronger BEV and hybrid sales, though it's curbed some EV plans. Stellantis reported a 1% drop in Q4 and for the year. Toyota reported a 15% U.S. gain in Q4. Hyundai/Kia climbed 5% in the final three months of 2023, buoyed by the Ioniq 5 EV.
Eli Lilly, Novo Nordisk Advance
Eli Lilly and Novo Nordisk unveiled key initiatives in their battle for dominance in the weight-loss drugs arena. Lilly launched a direct-to-consumer website called LillyDirect that helps connect patients with independent doctors and support, and deliver some medications to patients' homes. The website will focus on treatments for migraines, diabetes and obesity. Meanwhile, Novo signed a pair of deals to investigate another means of treating obesity with Omega Therapeutics and a treatment for a form of steatohepatitis related to obesity. Novo shares broke out on the news. Omega, a dollar stock, skyrocketed. LLY stock cleared early entries but hit resistance at the official buy point.
Auto Chip Stocks Fall On Warning
Mobileye stock plunged 25% Thursday after it warned that 2024 sales would be below estimates because of excess inventory at its automotive customers. Mobileye makes technology for advanced driver-assistance systems and self-driving cars. It said automakers overbought components to avoid the parts shortages they experienced in 2021 and 2022. Also, some automakers had lower-than-expected production in 2023. The news dragged down auto-exposed semiconductor stocks, including Analog Devices, NXP Semiconductors, Onsemi, STMicroelectronics and Texas Instruments.
Apple iPhone Concerns Grow
Two Wall Street firms downgraded Apple on concerns about sluggish iPhone sales and macroeconomic worries that could impact consumer spending. Barclays cut its AAPL rating to underweight, or sell. Piper Sandler lowered its rating to neutral from overweight, or buy. Apple stock tumbled below its 50-day line.
Food Stocks Are A Mixed Bag
Lamb Weston reported a 15% EPS gain in fiscal Q2, with revenue up 36%, both slightly topping views. The frozen potato giant also gave upbeat full-year guidance. Egg producer Cal-Maine reported EPS that was far below views, tumbling 91% as prices fell sharply vs. a year earlier. Simply Good Foods reported mixed, slim growth. ConAgra Brands reported a 12% EPS drop that slightly beat, while a 3% revenue slide just missed. LW stock reversed lower, while CALM stock erased losses. ConAgra fell modestly. SMPL stock jumped.
APA Corp. will pay $4.5 billion, including debt, for Permian Basin producer Callon Petroleum. APA will pay 1.0425 shares per CPE share. That was worth $38.31 at Wednesday's close, but APA stock fell on the deal.
