Wednesday’s premarket trading looked set to continue Tuesday’s rally. The three major U.S. indexes posted solid gains on Tuesday and traded higher Wednesday morning. All 11 sectors finished in the green, led by tech (up 3.5%) and energy (up 2.3%). Chipmakers led the tech charge, with Nvidia adding 8% and Marvell jumping by more than 7%. Crude oil traded flat Wednesday morning at just over $72 a barrel, while Bitcoin dropped back below $50,000. Yields on 10-year Treasuries also traded flat at around 1.48%.
Among our watch list of meme stocks, eight posted double-digit gains Tuesday, with e-commerce retailer and platform provider Aterian Inc. (NASDAQ: ATER) leading the pack with a gain of more than 19%. That pulls the stock back near its level at the beginning of November, during which it dropped nearly a quarter of its value. The company had no specific news Tuesday. Shares traded up another 6% in Wednesday’s premarket session to $5.80.
GameStop Corp. (NYSE: GME) shares rose by nearly 6.5% on Tuesday and traded up by less than 1% in early trading Wednesday. The company will report quarterly earnings after markets close, and the estimates don’t point to any major performance improvement. Until supplies of gaming consoles from Microsoft and Sony improve, GameStop likely will face revenue challenges. Investors will be looking (again) for details on the company’s plan to transition to a digital business model.
Shares of DiDi Global Inc. (NASDAQ: DIDI) plunged by 10% last Friday but have risen by more than 18% in the past two days. That appears to run counter to common sense for a company that will drop its listing in New York (probably at no small cost to investors) in an effort to make peace with the Chinese government. The shares added 8% on Tuesday but traded down about 1.4% in Wednesday’s premarket session.
Tesla Inc. (NASDAQ: TSLA) added more than 4% on Tuesday to close at $1,051.75, and the stock traded up less than 1% in premarket trading. Wednesday morning, China’s automakers’ association reported that Tesla sold 52,859 vehicles in the country in November. Of that number, 21,127 were manufactured for export. In October, Tesla sold 54,391 vehicles in China, including 40,666 for export. Passenger car sales in China totaled 1.85 million in November, a 12.5% year-over-year decline.
Tuesday’s big news from Tesla came from CEO Elon Musk who said that he does not believe that the U.S. Congress should pass the Democrats’ Build Back Better bill. While the bill would reinstate the $7,500 federal tax credit for all electric vehicle sales, it would also add a $5,000 credit for EVs built in union shops in the United States. Tesla is not a union shop, and Musk said Tesla doesn’t need the $7,500 tax credit in order to sell its vehicles.
As for the bill’s $7.5 billion to build out of charging stations at the country’s gas stations, Musk commented, “Do we need support for gas stations? We don’t. So there’s no need for support for a charging network. I would delete it. I’m literally saying get rid of all subsidies, but also for oil and gas.”
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