Tesla earnings, PCE inflation data: What to watch this week

 Tesla earnings, PCE inflation data: What to watch this week

from bard

January 22, 2024

Investors will be closely watching a number of key economic data releases this week, including Tesla's fourth-quarter earnings and personal consumption expenditures (PCE) inflation data.

Tesla is expected to report fourth-quarter 2023 earnings of $2.29 per share on revenue of $16.74 billion. This represents a 67% year-on-year increase in profits and a 72% year-on-year sales increase.

Amid continued supply chain disruptions and rising inflation, investors will be watching for signs of Tesla's growth slowing. The company has faced challenges meeting demand for electric vehicles and has raised prices multiple times in recent months to offset rising costs.

PCE inflation data is released by the U.S. Bureau of Labor Statistics and is an important indicator of U.S. inflation. January data is expected to show inflation rising to 7.3% year-on-year, up from 7.0% in December.

Higher-than-expected PCE inflation data may increase pressure on the Fed to raise interest rates more aggressively. The Fed is expected to raise interest rates by 0.25 percentage point at its next meeting on January 25-26.

Here are some other important economic data to watch this week:

• Initial value of gross domestic product (GDP) in January

• New home sales in December

• December durable goods orders

The release of these data will give investors a new understanding of economic conditions and the outlook for inflation.

Here are some specific things to note for each version:

Tesla profits

• Sales: Investors expect higher-than-expected sales, a sign that Tesla will continue to grow despite the challenges it faces.

• Earnings per share: Earnings per share are expected to be strong, but investors will be watching for signs of a slowing economy.

• Forecast: Tesla's 2024 forecast will be closely watched. Investors will be waiting for the company to reiterate its target of delivering 1.5 million vehicles this year.

PCE inflation data

• Year-over-year change: A reading above 7.3% could increase pressure on the Fed to raise rates more aggressively.

• MoM changes: A reading above 0.5% is also concerning as it suggests inflation is continuing to accelerate.

Initial GDP value for January

• Growth: A growth rate of 0.5% or higher is consistent with the Fed's view that the economy is still growing at a healthy pace.

• Contributions from consumer spending and business investment: Investors expect strong contributions from these two areas, a sign that the economy remains healthy.

New home sales in December

• Sales Velocity: A sales velocity of over 700,000 units will have a positive impact on the housing market.

• Inventory: Falling inventories suggest housing is in short supply.

December durable goods orders

• Orders excluding shipping: Values ​​above 0.5% would be positive for manufacturing.

• Orders for non-defense capital goods except aircraft: Values ​​above 0.5% would be positive for business investment.