Stock markets started the week with an extremely bearish sentiment. The EV bearishness is the first breaking news alert. Two key executives reportedly left Tesla (TSLA) amid the firm confirming a more than 10% job cut.
CEO Elon Musk’s memo cited the importance of looking at every aspect of the company to cut costs and increase productivity. As a result, the firm will reduce its headcount by more than 10% globally. Growth firms that enjoy strong demand do not cut staff. Markets will re-calibrate TSLA stock valuations to that of a mature growth firm. It increases the risk of shares revisiting Jan. 2023 lows at around $100 - $135. Shares closed at $161.48.
Yesterday morning, U.S. treasury yields continued to rise throughout the morning. By 3:16 p.m. on Monday, the 10 10-year bond Yield decreased from over 4.64% intraday to 4.64%. Risks are increasing that yields may re-test the 4.75% - 5.00% highs not seen since last Oct. 2023.
Beware of the 7-10 year ETF (IEF) and 20+ Year Bond ETF (TLT) selling off further in the coming weeks.
Market pundits blame geopolitical tensions in the Middle East. Iran’s pre-announced attack on Israel is the third news alert investors cannot ignore. Israel may decide to escalate its differences with Iran, creating uncertainties for all countries involved in the conflict.
