The US Bureau of Labor Statistics reported November Consumer Price Index (CPI) increased 7.1% over the last 12 months. This shows inflation is slowing and may have peaked and is improving compared to October. The previous month the inflation rate was 7.7%.
Compared to last month, some items actually saw a decline in price. Energy service declined -1.1%, Used cars and trucks are down -2.9%.
The next report for January will be released January 12, 2023 in the morning.
Market reaction was favorable. Nasdaq Composite (COMP) was up 113.07 or 1.01% to finish 11,256.81 on the news on December 13, 2022.
Tesla (TSLA) went down -6.87 or -4.09% to finish $160.95 on 175, 862,722 volume. Average volume is 100,350,000. The weakness may be related to YouGov survey that Tesla approval received a -1.4% score and related to the Twitter acquisition. It could also be a negative impact from a recent Tweet where Elon Musk suggested prosecuting Dr. Anthony Fauci, director of National Institute of Allergy and Infectious Diseases. Dr. Fauci has saved millions of lives for advancing mRNA vaccine work with Moderna during the pandemic, ultimately resulting in a very effective vaccine against COVID. He has also informed the public on how to prevent COVID infection. Musk may not have liked COVID lockdown but Dr. Fauci served the nation the best he can based on science available at the time. The attack on Dr. Fauci could back fire and hurt Musk’s credibility since the majority of Americans liked Dr. Fauci and appreciated his work on COVID and AIDS. Astronaut Scott Kelly came to Dr. Fauci defense. Dr. Fauci himself wanted to avoid this discussion altogether and labeled this a distraction on what is more important. For Dr. Fauci, it’s fighting COVID and for Musk it should be to transition to a clean transport. Musk is linked closely to Tesla and a reputation hit on Musk hurts Tesla’s reputation and what the brand stands for. This in turn will affect sales of Tesla products.
A Clean Technica article goes more in detail about the impact of Elon Musk’s misinformed tweets but suggests EV and Tesla can survive. It argues that Tesla has thousands of talented employees and the products are still the best in the industry. The counter argument is these employees may resign. Future potential new engineering college grads who know the science, are better informed and smart may decide to apply elsewhere. The Clean Technical makes a good point that Elon may not realize that his suggestion that Fauci worked with China to develop the COVID virus attacks China. When China locked down Shanghai Gigafactory, Musk was smart to not protest. He most likely is aware of the potential consequence and complied. Musk should exercise more care in his tweets. Elon’s tweets have consequences and he needs to tweet based on undisputed proven facts instead of on conspiracy theories to avoid further damaging the Tesla brand and his credibility.
As the year is ending, the negative response could also be tax loss harvesting where investors sell losing positions to cover the gains to reduce taxes. The big divergence in performance from the market may also be the result of a large seller who had other information or have decided not to be associated with Tesla or Musk. It could be short sellers trying to benefit from the negative sentiment. It could be that Musk needs to sell more shares to shore up Twitter’s balance sheet and reduce interest payment. There’s uncertainty why Tesla shares performed so poorly.
https://cleantechnica.com/2022/12/13/evs-tesla-are-strong-enough-to-go-on-without-elon/