Stocks rose on Friday, with the S&P 500 and Nasdaq Composite posting their strongest week of 2024. The S&P 500 rose 4%, the Nasdaq Composite gained 5.9% for the week, and the Dow increased by 2.6%. Utilities, communications services, and industrials were the leading sectors, each up around 1%. The market is anticipating the Federal Reserve's upcoming meeting on September 18-19, where a 25-basis-point rate cut is expected. Recent economic data, including a moderation in inflation, supports this expectation.
BOEING
Boeing CFO Brian West warned that a labour strike, which began after factory workers rejected a new contract, will hurt aircraft deliveries and hinder the company's recovery, particularly affecting production of its bestselling 737 Max. The strike's financial impact depends on its duration, with a 30-day strike potentially costing $1.5 billion. Boeing shares fell nearly 4% after Moody’s and Fitch Ratings signalled potential credit downgrades. The company aims to return to negotiations, but workers seek larger wage increases to address the rising cost of living. The last Boeing strike in 2008 lasted nearly two months.
BA (Weekly). After breaking the support level at $163 formed for 2.5 years, Boeing is experiencing negative fundamental effects. We anticipate the price falling further until an agreement is reached with its workers.
TESLA
A Tesla Semi truck crash on California’s Interstate 80 last month required 50,000 gallons of water and aerial fire retardant to extinguish due to its massive battery fire. CAL Fire successfully contained the fire, preventing it from spreading. The truck was heading to Tesla’s battery factory in Nevada when the crash shut down part of Interstate 80 for 15 hours. Tesla’s driver-assistance systems were not in use during the incident. Though the Semi truck has yet to reach high-volume production, Tesla plans to start by late 2025. The NTSB is investigating the crash. Tesla declined to comment.
TSLA (Weekly). Experiencing several ups and downs, this stock has formed a triangle pattern and is expected to approach the upper band at 250.00. A correction is anticipated in the weeks to come.
MODERNA
Pharmaceutical company Moderna, currently out of favour, may be poised for a rebound. The vaccine maker saw its stock drop over 3% on Friday after JPMorgan downgraded it to underweight due to adjustments in its revenue outlook. Despite this, the average price target for Moderna suggests nearly 76% upside potential, though most analysts have a "hold" rating on the stock. Moderna shares have fallen 7.4% last week, contributing to a 32% decline in 2024.
MRNA (Weekly). Having declined for 4 consecutive months and lost over 60% of its price, Moderna is nearing its major support level at 66.00. Following this extended drop, we anticipate a rebound towards the 38.2% Fibonacci level at 104.50.
Fullerton Markets Research Team
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