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Today in the Market (10/18/2023)

Good Evening! On Wednesday, it was not a great day for the U.S. markets as investors absorbed weak profits from companies today. In addition, escalating tensions in the Middle East were reflected in an increase in the price of oil.

The three indexes all witnessed significant declines with the Nasdaq Composite sliding down by 1.62%, the S&P 500 falling by 1.34%, and the Dow Jones decreasing by 0.98%.

A CRAZY DAY FOR TESLA

Tesla (TSLA) shares exhibited volatility during after-hours trading after the electric car manufacturer’s failure to meet expectations in terms of both revenue and profit. However, the firm did disclose that Cybertruck deliveries are scheduled to proceed as planned in November of this year.

  • Revenue: $23.4 Billion vs. $24.06 Billion Expected
  • Gross Margin: 17.9% vs. 18.0% Expected
  • Earnings Per Share: $0.66 vs. $0.74 Expected

Let’s talk about car deliveries so far! Tesla reaffirmed its objective of manufacturing 1.8 million cars by 2023. So far Tesla has worldwide delivered over 1.3 million cars in the first three quarters of the year. However, in order to achieve its annual delivery target, the business will need a robust quarter of approximately 500,000 deliveries to meet the goal.

Did someone say Cybertruck? No? Well too bad! Tesla confirmed that the delivery schedule for the Cybertruck remains unchanged, and customers may expect to get their vehicles starting in November. However, despite Tesla’s announcement of a delivery event scheduled for Q3, no such event transpired during the quarter, but expect to see them on the road before the end of the year!

NOT AS BAD AS WE THOUGHT?

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Based on a limited survey of borrowers, researchers at the Federal Reserve Bank of New York are forecasting that student loan repayments would not significantly impede the economy.

Why does this matter? Well… Retailers, borrower advocates, and other concerned parties express concerns about the possible consequences of resuming repayments after a 43-month hiatus. However, according to the analysis, resuming loan payments would result in a decrease of $1.6 billion each month in borrowers’ expenditure, equivalent to a 0.1% decline from August levels. The delinquency rates would ultimately revert to their pre-pandemic levels.

What does that look like for an individual borrower? According to the analysis, debtors were granted pandemic forbearance, resulting in more than $260 billion in waived payments. Following the halt, borrowers anticipate reducing their monthly expenditures by an average of $56 compared to their stated average in August.

The overall picture? Although some borrowers faced difficulties, the researchers emphasized that the overall effect would be mitigated by many variables.

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