US Close: S&P 500 makes fresh records, Tesla eyes $1000 post Hertz deal

US stocks are rallying as investors start to dial back Fed rate hike bets and focus on this week’s wrath of tech giant earnings.  It is way too early to price in two Fed rate hikes next year, that could eventually become the base case scenario, but we will need to see inflation persist a couple more months before that should be priced in. 

Wall Street will clearly know how bad the current supply chain issues have impacted American businesses after this week’s results from Facebook, Alphabet, Amazon, and Apple.   Ad revenue will closely be watched this week and if it disappoints, that could put a damper on a robust holiday spending outlook.  If businesses refrain from advertising because they won’t have product in time, that could spell trouble for fourth quarter earnings. Tesla helped boost the S&P 500 index to record highs after securing a major contract from Hertz. 

Tesla

As if Tesla shares have not rallied enough, it seems they may continue to rise after a massive investment into elective vehicles from Hertz and an upgrade from Morgan Stanley’s Jonas. 

Hertz interim CEO said, “Electric vehicles are now mainstream, and we’ve only just begun to see rising global demand and interest.”  Hertz is committing to an initial order of 100,000 Teslas by the end of 2022, which should be valued around $4.2 billion.  This initial order from Hertz covers around 10% of the deliveries Tesla will have this year. 

Wall Street is starting to believe the skyrocketing move with Tesla’s stock price is nowhere near over since Tesla has a massive lead in the EV space and improving growth potential as the US, European and Asian markets for electric cars grows.  Tesla has done well during the global chip shortage that has devastated most car manufacturers.  Tesla’s ability to accept alternative chips has provided them with an edge in getting closer to their demand targets. 

The Model 3 became the best-selling vehicle in Europe last month and that has everyone buzzing that this is a key moment in transitioning to EVs.  World governments will meet later this week at COP26 to figure out how to cut carbon emissions while also battling with a global energy crisis.     

Morgan Stanely’s Jonas raised his Tesla’s price target from $900 to $1200.  Tesla’s stock rally was uninterrupted this morning on mounting concerns supply-chain issues are not easing, which could suggest a break of the psychological $1,000 level could see momentum towards $1,120. 

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