Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Tesla Breaks $1,000 And Helps Push S&P 500 To Record High

By TD Ameritrade (JJ Kinahan)Stock MarketsOct 26, 2021 10:47AM ET
Tesla Breaks $1,000 And Helps Push S&P 500 To Record High
By TD Ameritrade (JJ Kinahan)   |  Oct 26, 2021 10:47AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items

The S&P 500 is looking to build on Monday’s new all-time high. Stock futures are pointing higher before the open as more mega-cap tech stocks are slated to report after Tuesday’s close. These announcements include Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL). However, investors have plenty of other reports to work with this morning.

Before the opening bell, United Parcel Service (NYSE:UPS) announced it topped analysts’ earnings and revenue forecasts. UPS reported growth in domestic and international segments, as well as, its supply chain revenue. Being set smack dab in the middle of the current supply chain issues, UPS is experiencing a lot of demand and raised its 2021 financial guidance. The stock rallied nearly 3% in premarket trading.

Additionally, General Electric (NYSE:GE) beat earnings estimates but missed on revenue. The company is still trading more than 1% higher before the open. GE raised its full-year profit outlook despite citing issues with a “challenging operating environment” and the supply chain.

Some other S&P 500 components announced earnings before the open including drug-maker Eli Lilly (NYSE:LLY) that missed on earnings estimates, weapons manufacturer Raytheon (NYSE:RTN) that beat on earnings by missed on revenue, and garbage collector Waste Management (NYSE:WM) also missed on earnings.

On Monday, S&P 500 company Tesla (NASDAQ:TSLA) soared 14% higher before pulling back to close just over 12%. In the process, Tesla broke $1,000 per share. A couple of things happened to trigger these events. First, car rental company Hertz announced it would buy 100,000 Tesla cars as part of its plan to move toward more electric vehicles. The car rental business has been slow to adopt EVs so today’s deal could be a turning point for the industry. If the trend catches on with other rental companies, it could be more good news for Tesla.

Second, analysts at Morgan Stanley) upgraded Tesla by giving it a new price target of $1,200 per share. This comes with the assumption that Tesla can increase its production from 6 million vehicles per year to 8 million vehicles per year by 2030.

After starting Monday with a report that teenagers and young adults are beginning to shun Facebook (NASDAQ:FB), the company was able to rally 1.26% on the day and then add another 1.90% in after-hours trading. After the closing bell, Facebook announced it was able to beat analysts’ earnings estimates despite falling short on revenue estimates. While Facebook didn’t address teenagers and young adults, it did report a 12% increase in active monthly users across its apps.

Constructive Twitter Debate?

Navigating social media can be difficult for investors and users. In fact, some may say that it’s rare to find a constructive Twitter debate, but if you can find the right people, you may find some good insights. Twitter (NYSE:TWTR) and Square (NYSE:SQ) founder Jack Dorsey was trending on his own Twitter platform over the weekend when he forecasted that hyperinflation was “going to change everything.” Dorsey isn’t the first to make this prediction, and higher inflation has made its presence felt.

However, the post caught the attention of the famous stock picker Cathie Wood, and she gave several reasons why hyperinflation is unlikely. I think reviewing some of her reasons could help clarify the inflation situation.

First, she cited that the velocity of money is still falling. Velocity is the rate at which money turns over each year. Just putting money out into the system as the Fed has done doesn’t mean the money is being put to work. Therefore, a lot of the money appears to be sitting on the sidelines and not contributing to the current inflationary issues.

Second, technology has been and will likely continue to be deflationary. Technology tends to increase productivity, which reduces costs. A simple example is the use of tractors to replace laborers, but Wood cited artificial intelligence (AI) as an example, pointing out that training costs are dropping by 40% to 70% thanks to AI technologies. Of course, there are several examples that could be cited, but we don’t have time to go through all of them.

The next reason she gave was that disruptive innovation will change the way business is run today. Wood noted that many companies have failed to invest in research and development and instead have elected to pursue share buyback programs. Rising costs could push companies and innovators to focus on new and more efficient ways of doing business.

A fourth reason she pointed out was that businesses were caught off-guard with the COVID-19 lockdowns and have been playing catch up. Pressures from holiday shopping is making things worse. However, once the holidays go by, the normal economic cycle should provide some relief for supply chains and shortages. This goes along with what I’ve said before, as more and more people get out an about, consumption may opt to purchase more services and fewer products.

Finally, she pointed out that rising oil prices will likely increase the adoption of EVs, which ties right back into the Hertz-Tesla deal discussed previously. Increased use of EVs could help bring down the demand and eventually the price of oil.

The fact is that nobody knows the future, which is why these debates are important. They help investors explore different parts of a question and perhaps consider points that they hadn’t thought of before.

Crude Oil Daily Chart.
Crude Oil Daily Chart.

CHART OF THE DAY: SHOOTING STAR. Crude oil futures (/CL—candlesticks) is testing a very long-term resistance level that stretches back nearly 20 years. The results appear to be a shooting start candlestick pattern. Data source: ICE (NYSE:ICE), S&P Dow Jones Indices. Chart source: The thinkorswim® platform. For illustrative purposes only. Past performance does not guarantee future results.

Catch A Falling Star: My technical analyst friends are saying there are reasons to believe that the momentum in crude oil could slow down. First, the $85 level has been a historical congestion area for oil. This means that many oil traders often see this as a good price to sell.

Second, Monday’s price action created a shooting star candlestick formation, which means buyers tried to push the price higher throughout the day, but they were overwhelmed by the sellers who pushed the price back down and, in this case, caused oil to close slightly lower.

Third, last week’s oil price action was quite volatile throughout various trading sessions. Despite moving higher, sellers were battling buyers, which resulted in large intraday swings.

So, what we see here is that the battle lines are being drawn. Now, it’s a matter of whether the bulls can rally enough momentum to break the bears. Currently, the chart suggests that the bears are starting to hold their ground.

Big Fish, Little Pond: The announcement by Hertz to buy Tesla cars gives more attention to a rather small industry group. Only Avis Budget Group (NASDAQ:CAR), which operates both Avis and Budget car rentals, trades on a major stock exchange. Hertz Global Holdings (OTC:HTZGQ) is making its way out of bankruptcy, and Enterprise Holdings is a privately held business. The lack of publicly traded stocks in this industry could be one reason for Avis’s rise of 106% from its September low.

Another reason the rental car industry may see business rise is that for those that believe in the recovery story are expecting to see business travellers to return. Airlines are recording large increases in bookings because many countries, including the United States, are opening for tourists and travellers. Of course, this means that if COVID-19 cases rise or a new variant emerges, the group could get hit hard if travellers cancel plans or countries lockdown again.

Pass It On: This morning, before the open, the manufacturer and marketer of personal care products, Kimberly-Clark (NYSE:KMB) announced worse-than-expected earnings due to higher costs. The company said it’s trying to pass on the costs to the consumer, but apparently some consumers are choosing to buy less or not buy at all. You may remember that Unilever (NYSE:UL) was able to successfully pass on higher costs without hurting its bottom line, which shows how difficult the situation can be.

On Monday, Walt Disney (NYSE:DIS) announced plans to increase its ticket prices to its amusement parks. Fortunately for Disney, parks are a much smaller portion of what it does, so raising the ticket cost may not hit their bottom line as hard if it does deter park goers. Additionally, if people are ready to get traveling, they may not worry about the cost and just be excited to be at “the happiest place on earth.”

Tesla Breaks $1,000 And Helps Push S&P 500 To Record High

Related Articles

Jani Ziedins
Why Bears Keep Getting It Wrong By Jani Ziedins - Dec 03, 2021

Surprise, surprise, the S&P 500 recovered from Wednesday’s massive intraday reversal. Okay, no one was really surprised because Thursday’s 1.4% bounce was the market’s third...

Tesla Breaks $1,000 And Helps Push S&P 500 To Record High

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Kosi New yahoo
Kosi New yahoo Oct 26, 2021 4:43PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Emmanuel Mesoma
Emmanuel Mesoma Oct 26, 2021 4:43PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email