Tesla, New Home Mortgages Disappoint

The pebble that starts the selling

Tesla held their investors day yesterday. The following is a brief summary.

Tesla held its 2023 Investor Day presentation in Austin, Texas, on Wednesday, with CEO Elon Musk discussing his "Master Plan 3" and how the company plans to scale up in the face of increasing competition. Musk discussed Tesla's plans to produce 20 million electric vehicles per year by 2030 and to play a role in “re-powering the grid with renewable fuels”. He also discussed the challenges of increasing Tesla's market share in China and how the company is working to reduce costs and pass these savings onto customers. Following the 3-hour presentation, Tesla reported they had produced 4 million cars in total and executives discussed new car and battery cell factories and other manufacturing changes meant to improve the efficiency of Tesla vehicle production. Tesla shares have increased by 60% for the year so far and Mizuho Securities analysts see Tesla in a leadership position in the growing market for fully electric vehicles.

As the event went on the TSLA stock price began to sell off in after market trading. Good if your short TSLA or bad if you bought at the top side of the range.

New Mortgage Applications

Mortgage applications fell to a 28-year low for the second straight week according to the Mortgage Bankers Association data. Purchase applications were 44% lower than a year ago. Refinance applications were down more than 70% vs last year's trend. The decline in applications has been linked to the economic downturn caused by the Fed’s Fed Funds Rate hikes, as well as higher mortgage rates, which make new home purchase and refinancing less attractive.

U.S. National Home Price Index is down 4.5% since the peak in June 2022 to the last reporting of December 2022. I am curious to see what the January 2023 and 1st Quarter of 2023 prices look like.

*This is not advise or a recommendation.

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