🪫↔️ Tesla EV Sales Stall

Happy Wednesday all,

From Tesla’s surprising first annual sales decline to Waymo dominating the robotaxi market, the new year is kicking off with a mix of highs and lows. Mortgage rates are rising again, suppressing demand, while jobless claims hit an eight-month low—hinting at a complex economic landscape ahead. And on Wall Street, stocks are celebrating the best two-year performance in 25 years, even as Chinese markets face their worst January start since 2016.

With big moves in tech, housing, and employment, these stories offer a glimpse of the trends that will shape 2025. Let’s dive into the headlines that matter most.

Enjoy this week’s Hump Days!

- Humphrey & Rickie

👀 Eye-Catching Headlines

Waymo dominated U.S. robotaxi market in 2024, but Tesla and Amazon’s Zoox loom (CNBC)

Tesla shares slide after it reports first drop in annual deliveries (CNBC)

How Health Insurers Racked Up Billions in Extra Payments From Medicare Advantage (WSJ)

Stocks Cap Best Two Years in a Quarter-Century (WSJ)

Chinese Stocks Tumble in Worst Start to a Year Since 2016 (BBG)

The Weekly Brief

Tesla’s Annual EV Sales Drop for First Time in Over a Decade

• Tesla experienced its first annual decline in vehicle sales in over a decade, despite achieving record deliveries in the fourth quarter of 2024. The company sold 1.79 million vehicles last year, falling short of both its 2023 performance and analysts' expectations.

  • Looking ahead to 2025, CEO Elon Musk is projecting 20-30% growth, driven by the introduction of a more affordable vehicle and advancements in autonomous technology.

• However, uncertainties remain regarding the company's ability to meet these targets, particularly if EV tax credits are scaled back under the incoming Trump administration.

US Initial Jobless Claims Fall to Eight-Month Low to End 2024

• New jobless claims fell by 9,000 to 211,000 last week beating almost all expectations. Continuing applications, a proxy for the number of people receiving benefits, also fell, to a three-month low of 1.84 million.

  • A spike in the unemployment rate over the summer had raised eyebrows, prompting the Fed to cut interest rates by 50 basis points in September to help support the labor market.

• Michigan, New Jersey, and Pennsylvania registered the steepest increases, while Texas and California posted the largest declines.

• Despite the drop in continuing claims, recurring applications for US unemployment benefits are expected to increase for a second straight year, which is rare outside of recessions.

• In general, employers have mostly held onto their employees, and they’re not hiring as much as they used to. That means it takes longer for people out of a job to find work.

US Mortgage Rates Rise to Highest Since July, Suppressing Demand

• Mortgage rates in the US climbed to their highest level in nearly six months during the Christmas holiday week, with the average 30-year fixed mortgage rate climbing to 6.97%.

  • This increase was largely driven by rising Treasury yields and the Federal Reserve's projection of fewer interest rate cuts in 2025.

• As a result, mortgage applications for home purchases fell by almost 7% to their lowest level since mid-November, while refinancing activity plummeted by more than 23% to a one-year low.

• However, despite the rise in mortgage rates, there are signs that potential homebuyers are adapting to the higher-rate environment.

  • The National Association of Realtors reported that contract signings for previously owned homes increased in November to their highest level since February 2023, when rates averaged around 6.8%.

  • This suggests that while higher rates are still affecting the market, some buyers are adjusting their expectations and moving forward with purchases.

Personal Finance Corner

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