Shares of pioneer electric vehicle maker Tesla (NASDAQ: TSLA) jumped 10% on Monday after the global investment bank Morgan Stanley upgraded the stock to “Overweight.” The jump added more than $70 billion to Tesla’s market capitalization, which is now over $800 billion.
The investment bank said its Dojo supercomputer could power a nearly $600 billion surge in the electric car maker's market value. Tesla began producing the Dojo supercomputer in July to improve AI training for autonomous vehicles and plans to spend another $1bn on Dojo in 2024. The bank believes the supercomputer could give Tesla a significant advantage in the development of self-driving cars. Additionally, Morgan Stanley raised the 12-month price target from $250 to a high of $400, which would raise its capitalization to about $1.39 trillion.
European shares are diverging positively on expectations that the ECB will pause interest rate hikes, the European Central Bank is set to announce its policy decision on Thursday. The US stock futures trading in a narrow range as traders kept a close eye on a slew of upcoming U.S. economic data that could influence the next Federal Reserve monetary policy meeting outcome. On the other hand, investors should also closely watch the Apple annual keynote event later today where the company will announce the iPhone 15 along with Apple Watch.
Crude oil futures hovers near the ten-month highs. The recent strong rally lifted after Saudi Arabia announced it would extend its voluntary output cut of 1 million barrels per day through the end of December. Also, Russia decided to reduce its oil exports by 300,000 bpd until the end of the year. However, despite the strong rally, the upside momentum seems to be fading away as the oil prices have been sitting in a tight range since Wednesday.
In the currency market, the British pound dropped back to below 1.2470 after the release of the mixed UK employment report. Meantime, the Japanese Yen remains volatile against all the major currencies. The recent volatility was driven by hawkish comments by BOJ governor Kazuo Ueda. Kazuo Ueda stated on Saturday that the BOJ could have enough data by year-end to see whether it can end negative rates.
Gold price started the new week with notable gains but failed to extend the momentum after the US dollar regained the upside momentum. As of this writing, the metal trades below $1920. Moving ahead to the North American session, the precious metals are expected to trade flat on a daily basis as investors remain cautious ahead of the highly anticipated US inflation data on Wednesday.
On the data front, the UK Unemployment rate rises to 4.3% in May-July 2023, the highest since Q3 2021. The number of people in work in the United Kingdom dropped by 207 thousand in the three months to July 2023, coming more than market expectations of a 185 thousand fall.
Technical Outlook and Review
EURUSD: For today, the key support level is located at 1.0690. If it breaks below this level, it will head towards the next support level, which is near 1.0660. On the upper side, If the pair regains upside momentum and press back above 1.0750 then the next resistance area to watch is 1.0770 and 1.0800.
The important levels to watch for today: Support- 1.0690 and 1.0660 Resistance- 1.0750 and 1.0800.
GOLD: For today, if the gold price trades below $1920 in the coming hours, the metal is likely to extend its decline toward the next support which stands at the $1914/10 level. On the upper side, $1926 will act as an immediate and strong hurdle while 1932 will be a critical resistance zone.
The important levels to watch for today: Support- 1914 and 1910 Resistance- 1926 and 1932.
Quote of the day – “The key to trading success is emotional discipline. If intelligence were the key, there would be a lot more people making money trading… the single most important reason that people lose money in the financial markets is that they don’t cut their losses short.” Victor Sperandeo.