Dj Inside Doge's Federal Takeover - Wsj -2

By Al Root

While Elon Musk presides over his chaotic restructuring of the U.S. government, Tesla investors are trying to get their bearings. On Tuesday, shares plummeted 8.4% after disappointing sales data from Europe fed the belief that Musk's political activities were hurting demand. Tesla sold only 9,900 cars in January in Europe, down 45% from the prior January, even as European electric-vehicle sales rose 37%. Tesla's market cap fell below a trillion dollars.

That was just the latest shock. The stock is down 37% from its record closing high of $480 on Dec. 17, shedding $570 billion in market value, and is off 29% since Donald Trump's Jan. 20 inauguration. It has cost Musk some $140 billion in net worth.

The good news is relative. Shares are up 27% since the company's Oct. 10 Robotaxi Day, when Tesla talked up plans for a self-driving taxi in 2025. Hopes were fueled by the belief that Trump would speed U.S. self-driving efforts.

Fairlead Strategies market technician Will Tamplin said Tesla stock had support at about $315, which the stock breached on Tuesday. Tamplin isn't making a fundamental call — he's looking at charts to see when investors have bought and sold. Support represents where investors have bought stock; falling below support suggests investors' thinking has changed. CappThesis founder Frank Cappelleri notes additional support for Tesla at $275, near the stock's 200-day moving average. The stock closed on Friday at $293.

Write to Al Root at allen.root@dowjones.com

Last Week

Markets

Germany's Christian Democrats, led by Friedrich Merz, won federal elections; coalition talks began on Friday. The U.S. supported Russia on a United Nations resolution vote on Ukraine. President Trump threatened tariffs on China and Europe, and said levies on Mexico and Canada would begin on March 4. U.S. stocks and crypto sold off, with the S&P 500 index 4.6% off its Feb. 19 high on Thursday. On the week, the Dow industrials rose 0.95%, the S&P lost 0.98%, and the Nasdaq Composite fell 3.47%.

Companies

Berkshire Hathaway's cash pile grew to $334 billion in 2024 from $168 billion the prior year. Companies are raising prices in anticipation of 25% steel and aluminum tariffs. Apple said it would spend $500 billion in the U.S. to build its artificial-intelligence business. A TD Cowen report suggested that Microsoft was canceling leases on AI capacity, a cautionary move. Nvidia beat on sales and earnings, but investors were lukewarm. Super Micro Computer shares soared, then fell, after the company filed delayed financials.

Deals

Ukraine President Zelensky left the White House without signing a deal to monetize mineral assets in Ukraine... Sun Communities agreed to sell 100% of its Safe Harbor Marinas business to Blackstone for $5.65 billion, all in cash...The founding family of Japan's Seven & I Holdings failed to get financing to buy the 7-Eleven owner. Waiting in the wings, with a $47 billion bid: Canada's Alimentation Couche-Tard.

Next Week

Monday 3/3

The Institute for Supply Management releases both its Manufacturing and Services Purchasing Managers' Indexes for February. Consensus estimates are for a 50.5 reading for the Manufacturing PMI, which will be released on Monday, and a 53 reading for the Services PMI, to be released on Wednesday. This compares with readings for 50.9 and 52.8, respectively, in January.

Tuesday 3/4

More than 95% of the companies in the S&P 500 index have reported fourth-quarter results, with roughly three-quarters beating earnings-per-share estimates and about 60% surpassing sales projections. On tap this week are CrowdStrike Holdings and Target, which announce results on Tuesday. Two megacap companies, Broadcom and Costco Wholesale release their earnings on Thursday.

Friday 3/7

The Bureau of Labor Statistics releases the jobs report for February. Economists forecast a 155,000 increase in nonfarm payrolls, after a 143,000 gain in January. The unemployment rate is expected to remain unchanged at 4%. Initial jobless claims have risen recently, adding to investors' fears of a "growth scare" that has shaved 3.1% off the S&P 500 since its record close on Feb. 19.

The Numbers

49.7%

The percentage of consumer spending by the top 10% of U.S. earners, a record high going back to 1989.

27%

The rise of the number of Fidelity 401(k) accounts of a million dollars or more, ending 2024 at 537,000.

7

How much the Conference Board Consumer Confidence index fell in February, largest since August 2021.

52%

Percentage of U.S. workers worried about the use of AI in the workplace. Some 16% say it's already there.

Write to Robert Teitelman at bob.teitelman@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

By Francesca Fontana

The Score is a weekly review of the biggest stock moves and the news that drove them.

Home Depot

Home Depot delivered a better-than-expected quarter.

The home-improvement retailer beat Wall Street expectations for quarterly sales and profit, but offered cautious guidance as higher interest rates continue to pressure big-ticket purchases. The company also said it would increase its quarterly dividend to $2.30 a share.

Home Depot said demand was strong for appliances and building materials, but weaker for discretionary projects such as kitchen and bathroom remodels, for which consumers typically use financing.

Rival Lowe's also posted better-than-expected quarterly results during the week.

Home Depot shares rallied 2.8% Tuesday.

Tesla

Is Elon Musk more focused on DOGE than on Tesla?

That's the worry of some investors and analysts helping drive the electric-car maker's latest selloff.

New data published Tuesday showed that Tesla had a terrible January in Europe, as its sales fell 45% in the region compared with a year earlier. Possible factors behind the slide include Chief Executive Musk's political activism and focus on his role at the Department of Government Efficiency, rising EV competition from Volkswagen and other legacy brands, and a pullback after a sales push in December.

The news on Tuesday sent the company's market capitalization below $1 trillion for the first time since mid-November.

Tesla shares dropped 8.4% Tuesday.

Stellantis

The carmaker behind Jeep, Ram and other brands may still have some bumps in the road ahead.

Stellantis gave a cautious outlook for growth and profitability this year, but its guidance disappointed. The company also said revenue fell 17% and shipments were down 12% in 2024, mainly due to temporary gaps in its product lineup.

Later in the week, Stellantis and other European auto stocks fell in response to President Trump's latest tariff threats against the European Union.

Stellantis shares lost 5.3% Wednesday.

Anheuser-Busch InBev

Shares of the world's largest brewer bubbled higher on Wednesday.

AB InBev — whose brands include Budweiser, Stella Artois and Michelob Ultra — said that higher U.S. prices helped boost its quarterly revenue and profit. Its organic revenue growth topped analysts' forecasts.

The company said it continued to win market share in the U.S. in the fourth quarter and recovered from a boycott that hammered them for more than a year. The boycott began in the spring of 2023, after transgender influencer Dylan Mulvaney posted an Instagram video about a personalized beer can the brand had sent her as a gift.

American depositary shares of AB InBev rallied 7.2% Wednesday.

Nvidia

Nvidia's blockbuster earnings weren't enough for Wall Street.

The chip maker's stock fell on Thursday, despite Wednesday's report that showed sharply rising sales and profit in its latest quarter. Nvidia brought in $11 billion of revenue from its new Blackwell artificial-intelligence chips.

The results showed spending on Nvidia's chips continues to soar despite jitters about the outlook for the AI boom. In January, the threat of competition from Chinese AI developer DeepSeek spooked Nvidia investors and rattled markets.

Analysts blamed the stock's fall on narrower profit margins and worry about Nvidia's sales in China.

Nvidia shares slid 8.5% Thursday.

HP

HP shares powered down after the computer maker's weak outlook and layoff announcements.

The company late Thursday posted higher revenue in its fiscal first quarter, but said the effects of tariffs would drag on its second-quarter results.

HP also said it would lay off up to 2,000 more employees as part of a continuing cost-cutting plan, bringing the total number of job cuts under the restructuring to as many as 9,000. First announced in November 2022, HP's "Future Now" plan initially called for workforce cuts of about 7,000 employees.

HP shares fell 6.8% Friday.

Our weekly markets news roundup is now part of the WSJ's What's News podcast. Host Francesca Fontana discusses the biggest stock moves of the week and the news that drove them. Check out What's News in Markets at wsj.com/podcasts or wherever you listen.

Write to Francesca Fontana at francesca.fontana@wsj.com.