Reuters / Brendan McDermid
US stocks jumped Thursday as investors cheered strong GDP data and Tesla earnings.
GDP grew 2.9% over the fourth quarter, above estimates of 2.8%.
Tesla rallied almost 11% after posting record results after the bell on Wednesday.
US stocks jumped on Thursday as investors cheered a surprise upside in fourth quarter GDP, bucking some fears of a looming recession.
All three indexes ended the day in the green, with a gain in the Nasdaq Composite led by Tesla, which jumped almost 11% on Thursday after beating earnings estimates and posting record revenue figures.
GDP grew 2.9% annualized over the fourth quarter, according to the Commerce Department, above the 2.8% estimated by economists.
Tesla, meanwhile, reported a record revenue of $24.32 billion over the last quarter, above estimates of $24.16 billion.
Analysts from Goldman Sachs and Wedbush reiterated their “Buy” rating for the EV maker, and predicted shares would rally 38% this year to $200. JPMorgan, though, rated Tesla as “Underweight,” citing disappointing profit margins. The bank predicted shares would slide 24% to $120 this year.
Here’s where US indexes stood at the 4:00 p.m. closing bell on Thursday:
S&P 500: 4,060.43, up 1.1% Dow Jones Industrial Average: 33,949.41, up 0.61% (205.57 points)Nasdaq Composite: 11,512.41, down 1.76%
Despite the positive surprise in GDP, some economists warned that the US is not out of the woods when it comes to a recession.
“The economy grew decently in 2022 — the fears of a recession underway in the first half of last year were misplaced. However, the picture is different looking forward. The trend in real GDP weakened into year-end, and other economic indicators suggest the economy was on the cusp of contracting at the turn of the year,” Comercia Bank chief economist Bill Adams said in a statement on Thursday. “Financial indicators like the inverted yield curve also signal a strong likelihood of a recession ahead,” he added.
“Headline GDP was very strong beating consensus suggesting robust economic activity and if recession were to materialize a softer recession. However, the drivers behind this growth are far from ideal,” Ash Alankar, the head of global asset allocation at Janus Henderson Investors said in a statement.
Alankar noted that personal consumption came in below expectations and the personal savings rate came in above expectations, a sign that consumers are already pulling back from spending out of caution.
Here’s what else is going on:
FTX aims to ask Sam Bankman-Fried’s parents and brother if they got any money from the collapsed crypto exchange, lawyers said.The New York Times, Stanford University, Coinbase, and Netflix are among FTX’s creditors, according to a recent court filing.Chinese electric-vehicle stocks rallied as Elon Musk says Tesla’s biggest rival is coming from China.Tesla may be able to weather an economic storm, but some of its guidance figures aren’t adding up, Gene Munster said.Tesla stock could rally 38% this year after its upbeat earnings report, Wedbush said.Natural gas prices hit their lowest level since April 2021, and have crashed 70% from highs of last year.Chevron wowed investors with a massive $75 billion stock buyback, which at current prices, would retire about 20% of the company’s shares.
In commodities, bonds, and crypto:
Oil prices climbed, with West Texas Intermediate up 1.17% to $81.08 a barrel. Brent crude, the international benchmark, inched higher 1.59% to $84.49 a barrel.Gold edged lower 0.65% to $1,930 per ounce.The 10-year Treasury yield ticked higher by three basis points to 3.498%.Bitcoin moved higher by about 1% to $23,073.41.