Equities report: US Equities in a wait and see position

US equity markets seem to maintain a wait and see position as market worries for Trump’s tariff war seem to intensify. In the current report, we’ll take a look at fundamentals created by Trump’s tariff intentions, the Fed’s intentions and have look at the wide drop of Tesla’s share price. We are to compliment the review of Tesla’s fundamentals also with a technical analysis of tis share price’s daily chart.

Trump stuns the markets with 25% steel tariff

US President Trump announced on Monday that he intends to apply 25% tariffs on all US steel and aluminium imports, “without exceptions and exemptions” possibly by today. It should be noted that there are allready tariffs applied on US steel and aluminium imports of 10%, which are to be raised to 25%. The tariffs are expected to hit primarily US imports from Canada, Brazil, Mexico, South Korea which entered the US, duty free until now. A possible exception to the new tariffs, may be Australian exports of steel and aluminium as Australia claims to have a trade deficit with the US, an element that US President Trump seems to be taking account of. In any case, Trump’s intentions to impose tariffs and his mercantile protectionist approach, combined by a wide degree of unpredictability and his flamboyant style, tends to enhance market uncertainty about the global economic outlook. Given the prementioned fundamental change, the US equity markets  may become more hesitant to advance higher, as the economic outlook of the US but also on world wide level.    

The Fed’s hawkish intentions and January’s US CPI rates

The Fed seems to maintain rather hawkish intentions. Fed Chairman Powell’s testimony before the US Senate tended to highlight that tendency as Powell stated that the US employment market remains tight and inflation, despite still being above the banks’ 2% target, has slowed down. As for monetary policy, the Fed seems to be in no hurry to cut rates, a comment that implied a continuance of the tight financial conditions in the US economy for the time being. Interestingly Fed Chairman Powell also in answering questions, despite not stating his opinions on the correctness of Trump’s intentions to impose tariffs and in general the US President’s policies, he did acknowledge the possibility of an inflationary effect. Overall, we see the case for the bank to remain on hold for the time being, maybe even forcing the market to readjust its current expectations for a rate cut. It’s characteristic that the release of the US CPI rates for January in today’s early American session, showed an intensification of inflationary pressures for the past month in the US economy both on a core and headline level, which in turn may harden the Fed’s hawkish stance.

Tesla’s share price continues to crater

Maybe an impressive move in US stockmarkets yesterday was the almost 6% drop of Tesla’s share price. The bearish movement according to analysts may have been related to Chinese rival BYD’s announcement for a partnership with DeepSeek and the offering of its autopilot-like system on most of its new cars. The news tended to intensify market worries that the Chinese competition is catching up with Tesla, intensifying the bearish movement of its share price over the past four trading sessions. Yet the issue runs deeper for Tesla, the drop of revenue for the EV company by a third in China for January and a similar percentage in Australia, tend to highlight the problems faced by the company’s sales department. Furthermore the intensifying US-Sino trade war and the tariffs applied on imports form China, tend also to weigh on the company’s share price as the company has a number of suppliers from China for its battery components. Another negative would be the involvement of Elon Musk in the White House, as he is now in charge of DOGE, which in turn tends to bring possibly increased negative publicity, which is then possibly reflected on the company. Yet the main issue tends to revolve around Musk’s distractions, given his involvement in US politics, his other existing ventures like SpaceX, the social media platform X and ideas of a bid to take over OpenAI. But its not only Musk, the whole sector seems do be going through a market fatigue. Reports highlight that recent vehicle registration data imply substantial reduction in demand of for EVs in Europe and California. Given the complexity of the issues revolving around Tesla, on a fundamental level we tend to maintain a bearish outlook for now.

Upcoming earnings reports

The number of high profile companies which is scheduled to release earnings reports in the coming week tends  to ease, yet some companies still could generate interest among traders. Among which we note Unilever, Siemens and Airbnb tomorrow Thursday, Moderna on Friday, BHP on Monday, Baidu on Tuesday and HSBC and Rio Tinto on Wednesday.

기술적 분석

Tesla Daily Chart

• Support: 309.00 (S1), 238.55 (S2), 182.00 (S3)
• Resistance: 372.60 (R1), 439.00 (R2), 488.00 (R3)

On a technical level, we highlight the drop of Tesla’s share price, as it is currently aiming for the 309.00 (S1) support line. We maintain a bearish outlook for the share’s price as long as it remains below the downward trendline which has steepened its slope since the 31^st of January. We also note that the RSI indicator has reached the reading of 30, implying a strong bearish sentiment on behalf of the market for Tesla’s share price, yet at the same time the indicator may imply that the share’s price is nearing oversold levels and may be ripe for a correction lower. Similar signals are being sent by the fact that the price action has broken the lower Bollinger band. Should the bears maintain control over the share price’s direction, we may see it breaking the 309.00 (S1) support line, a level that has held its ground against downward pressure on the 15  of November and start aiming for the 238.55 (S2) support level, a level that provided support on the 4  of November last year. A bullish outlook seems very remote under the current circumstances and for its adoption we would require the share’s price to reverse direction, break initially the prementioned downward trendline in a first signal that the downward motion has been interrupted and continue to break the 372.60 (R1) resistance line and start aiming for the 439.00 (R2) resistance base. Even higher we note the 488.00 (R3) resistance barrier, which marks a record high level for the share’s price.          

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