July 2, 2024
CURRENCIES
USD/JPY:
- Data shows a significant majority of clients are net short.
- Change in longs/shorts/open interest (OI):
- Daily: longs +8%, shorts +1%, OI +2%
- Weekly: longs +19%, shorts +6%, OI +9%
- Implications for price action:
- Despite the bearish sentiment, there is a rise in long positions.
- Long positions have increased by 16.84% daily and 9.34% weekly.
- Net-short sentiment often signals bullish trends, but recent changes suggest a potential trend reversal.
GBP/JPY market dynamics: poised for potential upswing
- Current data shows only 19.38% of traders holding long positions.
- Short-to-long ratio: 4.16 to 1, indicating strong bearish sentiment.
- Change in positions:
- Daily: longs +8.27%, shorts +6.39%
- Weekly: longs -18.64%, shorts +3.63%
- Trading bias:
- Net-short positioning suggests potential upward momentum.
- Recent fluctuations create a mixed trading outlook.
- Balance of market forces indicates a nuanced trading environment.
STOCK MARKET
Tesla (TSLA) Inc. sales slump:
- Analysts predict Tesla will report weaker sales for another consecutive quarter.
- Expected to report delivery of 441,019 electric vehicles in Q2, a 5.4% drop year-over-year.
- This would mark the second consecutive quarterly decline, a trend last seen in 2012.
Factors contributing to struggles:
- Issues such as a suspected arson attack at its Berlin factory and shipping diversions in the Red Sea have been resolved.
- The main issue now is Tesla’s older vehicle lineup facing stiff competition from newer EV models.
Market and competitive analysis:
- Increased competition and a stale model lineup make growth challenging.
- Despite price cuts and leasing deals, sales slowed in the second half of last year and continued to decline.
Operational changes and challenges:
- Staffing cuts in April affected over 10% of Tesla’s workforce, including sales staff.
- Musk is pushing for an online sales process, which might not address new EV buyers’ needs for information and reassurance.
Model and product performance:
- The Model Y, the best-selling vehicle last year, has been on the market since 2020; the Model 3 since 2017.
- The Cybertruck, Tesla’s first pickup, has had a slow start and multiple recalls.
Investor reactions and future prospects:
- Despite analysts lowering delivery estimates, Tesla’s stock is down 20% for the year.
- Musk’s promises of new models, humanoid robots, and a dedicated robotaxi by August have buoyed shares.
- Shareholders recently re-approved Musk’s $56 billion compensation package.
- Analyst Ben Kallo expects Tesla to deliver 435,200 units this quarter and about 1.83 million for the year.
- Focus remains on long-term prospects, particularly the upcoming Robotaxi event on August 8.
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