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S&P 500 Bull Market, EV News and the American Consumer
The S&P 500 regained "official" bull market mojo, up more than 20% from its lows, thanks to the technology stocks that, just days ago, were wheezing. It's largely down to pre-FOMC, post-job numbers investor sentiment; initial jobless claims surged more than expected, to the highest levels since October 2021. Tech investors reckoned this helps build the case for a rate-hike pause at next week's Fed meeting. We'll see if this speculative hunch plays out the way the market seems to think - it's far from clear it will.
The U.S. Consumer Might Be in Trouble
While the markets continue to rally, American consumers might not feel as great as the markets lead us to believe. Soaring credit card debt and bankruptcy filing suggest something certainly has to give, and that could lead to sluggish earnings in the back half of 2023. While bankruptcy filings are not quite at the Financial Crisis level of 2008-2009, it could be very related to credit card debt. Consumer debt has skyrocketed in the past year, and with the return of student loan payments - along with the potential for banks to increase reserve holdings - it could spell trouble for, and of course, from, the vaunted American consumer.
Electric Vehicles Continue to Gain Momentum
In other news, General Motors Corp. (GM) announced it will adapt its electric vehicles to be able to use Tesla Inc.’s (TSLA) Superchargers. GM is following Ford Motor Co's. (F) lead in this. This automotive rendition of Kumbaya is actually a significant, perhaps even huge, move toward widespread electric vehicle adoption for the simple fact that it increases the sheer number of vehicles able to access the 12,000 Superchargers scattered across the United States. This is a huge selling point for new vehicle buyers as standardization will reduce buying confusion; one plug, one fit.
Shah Gilani just recommended what he thinks is the best play on "electrification" right now. It's a classic "breakout" play; the stock is moving up off of lows into a massive demand surge. The shares pay a 5.8% yield, to boot. You can see that ticker right here.
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