Tesla Unveils Flying Roadster as Stocks Shrug Off Hot PPI

Tesla unveiled a flying Roadster with SpaceX thrusters and TSLA rose 5.6%. Stocks shrugged off a 6.3% PPI print as Micron, CoreWeave and Asia bounced back.

TLDR

• Tesla unveiled its next-generation Roadster early Friday IST at a SpaceX test site in Texas. The car comes with an optional SpaceX thruster package, and Tesla showed it flying in a demo.
• Musk claimed 0 to 60 mph in 1 second, a top speed above 230 mph and more than 300 miles of range. Production is planned for 2028. TSLA is up about 5.6% on the perp at $381.91.
• US stocks bounced on Thursday even though September PPI came in at 6.3% from a year ago against 5.3% expected. The Dow rose 1.08% to 52,177.69 and the S&P 500 added 0.33% to 7,744.06.
• Nvidia CEO Jensen Huang backed CoreWeave, which reversed a 9% drop to close up 5.94%. Micron climbed off an $858 low to close up 1.87% at $931.24.
• In Asia, the Kospi rebounded more than 3% after Thursday’s near 8% fall, the Nikkei ended a six-day losing streak, and Indonesia crashed 11%, its worst day since 1998.
• Tesla reports Q3 earnings early Thursday, October 22 IST. The Fed meets October 27 to 28, with Cleveland Fed President Beth Hammack warning more aggressive action may be needed.

Market Regime

This is a relief rally inside a hot inflation tape. Producer prices are running at 6.3% a year and consumer prices at 3.7%, and the Fed has not ruled out another hike this month. Yet stocks went up on Thursday because bond yields fell about 10 basis points, money rotated into health, defense and blue chips, and Nvidia’s Jensen Huang calmed the AI debt scare around CoreWeave. About $850B came back into US stocks from this week’s lows.

Friday adds a company story on top of that. Tesla’s flying Roadster lifted TSLA about 5.6%, and Musk used the stage to pitch Tesla and SpaceX as one story, which lifted SPCX too. What could break the bounce is the same thing that caused the selloff: a hawkish Fed headline before October 28, or another round of AI debt worries hitting chips.

Bullish Factors

• Tesla’s flying Roadster demo put TSLA up about 5.6% on the perp, with Q3 earnings less than a week away.
• Nvidia stood behind CoreWeave. Huang said CoreWeave’s cost of capital is falling and its strength is improving every day, and Cathie Wood’s Ark bought 192,566 CoreWeave shares.
• AI demand is showing up in trade data. South Korea’s September exports jumped a record 83.5% from a year ago, and Singapore’s rose 46.2%.
• Fund managers are leaning into tech. A BofA survey shows 37% of global fund managers overweight technology, the most since August 2020.
• Stablecoins went mainstream. Mastercard launched stablecoin payments across more than 200 countries, and the EU named USDC its first significant e-money token. CRCL is up about 10.7% on the perp, the top mover on the app.

Bearish Factors

• Inflation is running hot. September PPI was 6.3% against 5.3% expected, the highest in almost four years, and core PPI was 5.0% against 4.4%.
• The Fed may need to do more. Hammack warned of more aggressive action, and Fed Chair Kevin Warsh would not say whether rates rise again at the October 27 to 28 meeting.
• Chips are still bruised. Semiconductor stocks lost more than $2 trillion in value from October 6 before this bounce, and memory makers alone lost about $1 trillion since October 2.
• CoreWeave’s credit risk is at a record. Its 5-year default insurance hit 1,194.5 basis points on worries about roughly $50B of debt.
• Emerging markets are cracking. Indonesia fell 11% after MSCI said the market no longer merits emerging market status, and Taiwan will curb AI chip exports to China as part of a US deal.

Asian Markets This Morning

Most of Asia bounced on Friday after Thursday’s AI debt scare, with chipmakers leading the recovery. Indonesia was the big exception.

• Kospi: up about 3.3%, recovering part of Thursday’s near 8% fall. Samsung and SK Hynix led after the record September export print.
• Nikkei 225: closed up 0.99% at 65,252.34 after rising as much as 2% earlier, ending a six-day losing streak. Kawasaki Heavy and Mitsubishi Heavy were among the top gainers.
• Hang Seng: up about 1%. Taiwan’s Taiex added about 0.3% as the AI chip export curb on China came into focus.
• Indonesia: the Jakarta Composite fell 11%, its biggest one-day drop since 1998, after MSCI proposed removing the market from emerging market status. Global funds that track MSCI could be forced to sell.

What Moved Wall Street Today

Thursday’s session opened lower on the hot PPI print and closed higher as yields fell and Nvidia’s comments on CoreWeave settled the AI trade.

• Dow: up 556 points, or 1.08%, to 52,177.69. Home Depot, Chevron, McDonald’s and Walmart led.
• S&P 500: up 0.33% to 7,744.06. Accenture rose 5.96%, while Corning and Oracle fell more than 5%.
• Nasdaq Composite: up 0.08% to 26,713.03. Nvidia fell 2.94% and Amazon 2.25%, even as CoreWeave closed up 5.94% at $69.69.
• Bonds: the 10-year Treasury yield fell about 10 basis points to 5.09%, which gave stocks room to recover from a weak open.
• Memory split: Micron closed up 1.87%, while Seagate fell 3.19% and Western Digital 2.10%.

Assets in Focus

TSLA: Tesla’s Roadster takes flight

Tesla unveiled the next Roadster at an event that started at 6:25 AM IST on Friday, held at a SpaceX test site in Texas. The car has an optional SpaceX thruster package. Tesla showed a flying demo and used the thrusters to land the car after a ramp jump. Musk claimed 0 to 60 mph in 1 second, a top speed above 230 mph and more than 300 miles of range, with production planned for 2028. TSLA is up about 5.6% on the perp to $381.91, from $361.55 24 hours ago. Next up is Q3 earnings, early Thursday, October 22 IST. The risk is timing: 2028 is a long way off, and event pops often fade into earnings if the numbers disappoint.

SPCX: Musk pitches Tesla and SpaceX together

The Roadster runs on SpaceX thruster technology and was shown at a SpaceX site, and Musk used the event to make the case that the two companies belong together. Barclays says a Tesla and SpaceX merger announcement is possible before December. SPCX is up about 2.6% on the perp at $152.15. Merger talk cuts both ways, so headlines can move the price sharply in either direction. SPCX trades on CoinDCX Global Futures as a Pre-IPO Perp.

CRCL: Circle is the top mover on the app

CRCL is up about 10.7% on the perp at $85.10, from $76.90 24 hours ago. Two things drove it. Mastercard launched stablecoin payments across more than 200 countries, and the EU named USDC, Circle’s stablecoin, its first significant e-money token. Both point to stablecoins moving into everyday payments, which is Circle’s core business.

MU: Memory bounces off the lows

Micron recovered from an $858 low overnight and closed up 1.87% at $931.24. It is up about 4.3% on the perp at $920.04. South Korea’s record 83.5% jump in September exports gave the memory trade fresh support, and SKHY, Samsung and the DRAM index are up about 3% to 4% on the app. This is a bounce from deeply oversold levels, since memory makers had lost about $1 trillion in value since October 2. Rate fears hit chips hardest this week, so a hawkish Fed headline could end the bounce quickly.

NVDA: Huang steadies the AI debt scare

Nvidia closed down 2.94% on Thursday, but its CEO did the heavy lifting for the wider AI trade. Jensen Huang said Nvidia does not need to backstop CoreWeave and that CoreWeave’s cost of capital is falling. That turned CoreWeave from a 9% loss into a 5.94% gain by the close and helped the Nasdaq finish green. The open question is CoreWeave’s roughly $50B of debt, with its default insurance at a record 1,194.5 basis points.

Index Levels to Watch

• S&P 500: the perp is at 7,759, up 0.8%. The 7,698 area is where it traded 24 hours ago. Thursday’s cash range was 7,669.66 to 7,754.15.
• Nasdaq 100: the NSDQ100 perp is at 29,972, up 1.1%. The 29,638 area is where it traded 24 hours ago.
• Dow: closed at 52,177.69. Thursday’s range was 51,681.37 to 52,250.18, so the index finished near the top of the day.
• Nikkei 225: closed at 65,252.34 after six straight losing sessions. The 64,614 area was Thursday’s close.

Disclaimer

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