5 Things You Need to Know to Start Your Day: Americas

Good morning. Tesla plunges after disappointing earnings, the global stock rally stalls and traders await a slew of US data . Here’s what’s [View in browser]( [Bloomberg]( Good morning. Tesla plunges after disappointing earnings, the global stock rally stalls and traders await a slew of US data . Here’s what’s moving markets.  —[David Goodman]( Tesla Troubles [Tesla shares plunged in early tradingÂ](after its 2024 delivery guidance failed to soothe investor concerns about slowing demand. The firm’s results yesterday narrowly missed earnings estimates and contained a warning that its rate of expansion will be “notably lower” this year. In a departure from past practice, Tesla avoided offering specific targets for the year ahead. The company fell well short of the 50% annual growth that management guided to in the past, despite slashing prices throughout 2023. The stock fell as much as 8.5% in early trading Thursday, Stocks Stall Tesla’s earnings are just one of a number of reports out in the past 24 hours which have left traders subdued. That’s prompted global equities to [take a breather]( after recent sharp gains. The blue-chip Euro Stoxx 50 traded flat after soaring to a 23-year high on Wednesday, while US futures were also little changed. Notable results include chipmaker STMicroelectronics, which dropped as much as 6% after reporting softer customer orders and guiding for weak revenue ahead. Meanwhile South Korea’s SK Hynix Inc., the world’s no. 2 maker of memory chips, fell the most in three weeks after its own results. There’s a flurry of earnings still to come today, with LVMH, American Airlines, and Intel among those reporting results. US Data US data out later could also alter the mood in markets. The [GDP report](is expected to show the economy expanded at a 2% annualized rate in the fourth quarter, while releases covering inventories, new home sales and weekly unemployment claims will also offer snapshot of the economy before next week’s Federal Reserve meeting. ECB Decision The[ European Central Bank’s latest decision]( is also a possible catalyst for market swings. The institution is set to keep borrowing costs on hold for a third meeting, but how long it maintains that stance remains the big question facing investors. While President Christine Lagarde has joined many of her colleagues in signaling a summer reduction is “likely,’’ the ECB is stepping up efforts to convince markets a move won’t come sooner. Fed Move The Federal Reserve made its own announcement last night, as it raised the rate on loans to banks issued under an emergency lending program launched last year. Borrowing had surged in recent weeks as institutions took advantage of the attractive financing terms of the Fed’s Bank Term Funding Program, which was unveiled during the regional banking crisis to ease stress in the financial system. The program is set to end in March, but, effective immediately, the adjusted interest rate for borrowing will “be no lower” than that of reserve balances in effect on the day the loan is made, the Fed said on Wednesday night. For banks, the drop in BTFP borrowing costs had spelled a larger arbitrage opportunity, one where institutions could tap the facility before parking the proceeds in their accounts at the Fed to earn interest on reserve balances. The change effectively eliminates that opportunity. What We’ve Been Reading This is what’s caught our eye over the past 24 hours. - Joe Lewis’ habit of tipping off staff [landed him in court.]( - More signs of optimism are emerging in the [UK housing market](. - The [EquiLend cyberattack]( leaves banks with a headache. - The [Bloomberg Daybreak podcast]( takes a look at Boeing’s woes. - Andrea Felsted warns against [betting your bonus]( on a bargain Rolex. - German business outlook [unexpectedly soured](at start of 2024. - How often is Taylor Swift [actually shown at NFL games](? And finally, here's what Joe’s interested in this morning There's been a lot of news about layoffs lately. Just yesterday there were some announced at eBay and SAP. And of course in the media world, it's been a disaster day in and day out. Today at 8:30 AM ET we get a fresh Initial Jobless Claims number, and the expectation is for a reading of 200K, which is very low by historical standards. One measure that I post from time to time is the 52-week moving average of the Non-Seasonally Adjusted claims number. It's a simple, albeit slow moving way, of stripping out any noise and getting the trend. Anyway, it's also very low, and actually -- although it's impossible to really discern in the chart -- down vs. where it was a couple of months ago. In the chart the white line is the weekly number, and then the magenta line is the moving average. At least for now, the story has been a deceleration in hiring, but extremely low layoffs. That's a combo that the Fed is probably fine with, but obviously it's important to watch for any signs of an uptick. Follow Bloomberg's Joe Weisenthal on X [@TheStalwart]( Like Bloomberg's Five Things? [Subscribe for unlimited access]( to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. 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