Nasdaq 100 outlook: Tesla stock jumps on record deliveries

US futures mixed

• Dow Jones Industrial Average is down 0.2%
• S&P 500 is down 0.1%
• Nasdaq 100 is up 0.1%

US markets are mixed as we start the second half of 2023, although activity may be more subdued than normal ahead of the July 4 holiday tomorrow.

In terms of economic data today, we have US ISM Manufacturing PMI, employment and construction spending data out this afternoon.

Most discussed Reddit stocks

Below is a list of the top 10 most mentioned US stocks on the WallStreetBets thread on Reddit over the last 24 hours on July 3, 2023, according to data from Quiver Quantitative. Exchange-Traded Funds (ETFs) and other instruments have been excluded:

1. Tesla
2. NVIDIA
3. Apple
4. C3.ai
5. Carnival
6. Advanced Micro Devices
7. SoFi
8. American Strategic Investment
9. Carvana
10. Meta

Most active US stocks before the bell

Below are the most active stocks with a valuation of at least $500 million before the bell, based on trading data taken from Bloomberg:

1. Tesla
2. Nikola
3. Lucid
4. Lilium
5. Carnival
6. Rivian
7. Palantir
8. Virgin Galactic
9. Joby Aviation
10. Apple

US premarket winners and losers

Here are the stocks worth at least $500 million experiencing the sharpest movements in premarket trade, according to data from Bloomberg:

Top US stocks to watch

Tesla is up 6% this morning and at a nine-month high of $277.50 after revealing over the weekend that it delivered a record 466,140 vehicles in the second quarter. That was almost 4% above the 448,350 forecast by analysts. Tesla has been slashing prices to prop-up demand this year and the result suggests this is working, although all eyes will be on its margin when it releases earnings on July 19 as investors gauge how much profitability has had to be sacrificed to keep demand healthy. Inventory levels continue to build, albeit at a slower rate than what we saw in the first quarter, which could pressure Tesla to keep cutting prices. Wedbush analyst Dan Ives, a long-time Tesla bull, said the figures will send ‘bears into hibernation mode’ as he maintained his Outperform rating and $300 price target. ‘Tesla continues to play chess while other EV players are playing checkers and this was another trophy case quarter for Musk & Co despite much skepticism from the Street the last few months and will create some fireworks for the bears on these robust number[s],’ Ives said in a note. Among the other brokers to up their view in wake of the update is JPMorgan to $120 from $115 and Cannacord Genuity to $293 from $257, showing there are still differing views when it comes to Tesla’s valuation.

Smaller electric vehicle maker Rivian is up 3.9% this morning after it made 13,992 vehicles and delivered 12,640 of them to customers in the second quarter, ahead of the 12,562 that analysts thought it could produce in the period.

Apple is down 0.3% at $193.33 after closing at a record all-time high on Friday, allowing it to finally become the first publicly-listed business to sustain a valuation of over $3 trillion! CFRA raised its price target on the iPhone maker to $220 from $190 this morning, suggesting some brokers still see plenty of potential upside. Still, that has not been enough to give support to the share price, which is taking a knock today after the Financial Times reported Apple has already had to scale back production of its new Vision Pro headset as manufacturers struggle with the complex design of the pricey bit of kit, which will sell for $3,499. The report said it is now aiming to make fewer than 400,000 of them in 2024 while two Chinese suppliers have said they have only been asked for enough components to make 130,000 to 150,000 units. Plans to introduce a cheaper model have also been pushed back.

Bad news for some is good news to others. Meta is trading marginally higher amid the reports that Apple is having problems manufacturing its headset. That is because Meta currently enjoys a monopoly by accounting for over 80% of global headset sales.

US chipmakers NVIDIA and AMD both continue to recover from the rout we saw last week amid reports that the US government plans to tighten rules designed to prevent the country’s most advanced technology finding its way to China. The pullback this caused appears to have encouraged investors to take it as a buying opportunity. NVIDIA is up 0.4% while AMD is trading 0.5% higher.

Exxon Mobil, Chevron and Occidental Petroleum are all trading around 0.7% higher in premarket trade as they follow oil prices higher in wake of a report from state-backed news that Saudi Arabia plans to extend its oil production cut by one month and reports that Russia is also introducing new limits on exports.

Carnival is down 0.6% at $18.72 after closing at 14-month highs on Friday. The cruise line operator, which has been the third best performer in the S&P 500 in 2023, had its price target raised this morning to $18 from $16 by JPMorgan, which maintained its Overweight rating on the stock. That follows on from Friday when Jefferies said it still has room to climb higher despite its stellar run in 2023 as it set the highest target price on its US-listed shares among all brokers at $25. ‘Despite the strong year-to-date performance, we believe the journey from a good trade to long-term investment case remains ahead,’ said analyst David Katz.

Moderna is trading marginally higher before the bell after submitting an application to secure regulatory approval for its updated Covid-19 vaccine designed to target a sub-variant. The application has been made to the European Medicines Agency.

Tyson Foods is trading marginally higher after deciding to reintroduce some antibiotics into chickens, marking a reversal after pushing the ‘no antibiotics ever’ tagline, according to the Wall Street Journal, which said it plans to add antibiotics known as ionophores that are designed to battle a poultry disease known as coccidiosis. Tyson said it is now pushing for no antibiotics important to human medicine by the end of 2023.

SoFi is up 0.5%. The US Supreme Court on Friday threw out the government’s plan to slash student debt for over 40 million people, which some estimates suggest would have cost over $400 billion over 30 years. The justices voted 6-3 against the plan, which president Joe Biden pledged during his campaign to enter the White House. Students are set to start repaying their loans, including those held by SoFi, this August following a three-year hiatus. The news may be prompting concerns that SoFi could suffer if Biden tries to find an alternative way to protect student borrowers.

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