Before the Bell: Ready, Set, CES; Tesla's Record Deliveries Not Good Enough

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Premarket action on Tuesday had all three major U.S. indexes trading higher. The Dow Jones industrials were4 up 0.42%, the S&P 500 up 0.49% and the Nasdaq 0.68% higher.

Ten of 11 market sectors closed lower Friday, with real estate (−1.00%) and utilities (−0.96%) falling the most. Energy (0.76%) posted the day’s only gain. The Dow closed down 0.22%, the S&P 500 down 0.25% and the Nasdaq down 0.11% on Friday.

Trading volume was lighter than average again Friday, and New York Stock Exchange losers led winners by 1,714 to 1,400, while Nasdaq decliners led advancers by 2,378 to 2,294. Take-Two Interactive Software Inc. (NASDAQ: TTWO) posted the day’s largest gain (2.75%), and Charles River Laboratories International Inc. (NYSE: CRL) posted the biggest drop (2.53%).

On the economic front, this Wednesday features the ISM manufacturing index for December, expected to contract further from a 49% reading in November to 47.5%. On Thursday, the weekly report on new claims for unemployment is due, along with weekly reports on petroleum and natural gas inventories.

The week’s most closely watched report will be released on Friday, when the Bureau of Labor Statistics issues the nonfarm payroll report for December. Headline unemployment is expected to tick higher, from 3.7% in November to 3.8%. Nonfarm payrolls are forecast to rise by 225,000, down from 263,000 in November.

The Consumer Electronics Show, aka CES, officially opens Thursday and runs through Sunday. Attendees from 174 countries will get a chance to look over exhibits from more than 3,000 companies. For those of us stuck at home, more than 4,700 media representatives will be feeding us the blizzard of announcements that CES generates.

This year’s show will surely introduce new gadgets. Samsung, for instance, is showing off a display screen that is not only foldable but slidable. Does anyone want one? The Korean giant also will show a 5K display that challenges Apple’s 5K Studio Display and LG’s high-end monitors. The 27-inch Apple monitor starts at $1,599, and Samsung is expected to come in a bit lower than that.

Bigger questions, like, “Does anyone care about the [metaverse, Web3, crypto] anymore?” will also be asked and not answered. You should also expect to hear thousands of words about artificial intelligence (AI) and how it will change our lives any day now.

On Monday, Tesla Inc. (NASDAQ: TSLA) released data on its deliveries for the fourth quarter and for the full year. During the quarter, Tesla built 439,701 vehicles (20-to-1 for Models 3 and Y compared to Models S and X) and delivered 405,278 vehicles to their new owners. Quarterly delivery numbers set a new record for the company but were about 1,500 short of the average analyst estimate.

For the full year, Tesla deliveries totaled 1.31 million, up 40% year over year. Unfortunately, the company’s target was 50%. Street earnings estimates and price targets will begin falling Tuesday morning. Tesla bulls are going to point out that the company is still struggling with a gap between producing and delivering cars. Tesla bears are going to say the company is facing a demand problem that can be solved only by lowering production or lowering prices, or both.

Tesla stock traded down about 4% in Tuesday’s premarket session at $118.14.

Three of China’s top EV makers, Nio Inc. (NYSE: NIO), Li Auto Inc. (NASDAQ: LI) and Xpeng Inc. (NYSE: XPEV), reported December-quarter results over the weekend.

Nio delivered 40,052 vehicles in the quarter, up 60% year over year, and 122,486 in all of 2022, an increase of 34%. The stock was up 3.3% in Tuesday’s premarket trading.

Li Auto delivered 46,319 vehicles, up 31.5% year over year. Total deliveries in 2022 increased by 47.2% year over year to 133,246. The company’s stock traded up about 6.3% early Tuesday.

Xpeng reported deliveries of 22,204 in the December quarter and 120,757 for the full year. Shares traded up just over 6%.

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