Bulls come back on Wall Street. Tesla loses after price cuts 📊

• Wall Street opens lower but the indexes are back on the rise in no time. US100 gains 0.4%
• After strong NFP report, market expects first Fed rate cuts in September 2024 
• Aehr Test Systems (AEHR.US) shares lose more than 16% after results
• Tesla (TSLA.US) once again cuts car prices in the US - shares retreat 2%
• LeviStrauss (LEVI.US) cuts profit forecasts
• Strong declines in beverage sector - Coca Cola (KO.US) extends losses

Today, investors quickly returned to buying after the US market opened - but the first reaction to the strong NFP report was downward. Ultimately, we can associate the change in sentiment with a kind of 'realization of facts' as strong data from the US labor market is slowly ceasing to surprise the market. However, looking at the report more closely - the positive for stocks seems to be the 0.1% increase in US unemployment (the market expected a decline). As a general rule - a strong labor market also means a strong consumer and potentially solid corporate earnings. The US earnings season is se to begin in October.

Shares of Chevron (CVX.US) and Exxon (XOM.US) are losing heavily - both companies are weighed down by uncertainty over the continued trend in oil, with JP Morgan expecting $86 per WTI by year-end. Yesterday's declines are extended by Coca Cola and Pepsico - the market is pricing in concerns over the impact of obesity-fighting semaglutide drugs (Wegovy and Ozempic) gaining traction on consumer trends in processed foods and sweetened beverages. Source: xStation5

US100 chart (M30)

Looking at the US100 on the M30 interval, we can see how quickly demand reacted after the US opening, allowing the index to return above the 100-session average. Currently, the main level to overcome is still the level of 15,000 points. If the index manages to bounce above this psychological boundary - there will be a chance of a broader at least short-term trend reversal. Source: xStation5

The change in employment according to the NFP report was 336,000 vs. 170,000 forecast and 187,000 previously. Wages rose 0.1% less than expected, at 4.2% y/y vs. 4.3% previously. The unemployment rate rose to 3.9% vs. 3.8% previously and an expected drop to 3.7%. Source: XTB Research

News from companies

• Aehr Test Systems (AEHR.US) loses 15% - The semiconductor test equipment provider released fiscal first-quarter results that disappointed Wall Street at a still very high book value valuation.

• Elf Beauty (ELF.US) gains after analysts at Jeffereies raised their rating to buy from a previous hold seeing the prospect of a rebound after the company's recent valuation decline

• Levi Strauss (LEVI) is trying to bounce back after nearly 3% declines - the company lowered revenue and profit expectations for the new fiscal year

• Shoals Technologies Group (SHLS.US) gains as analysts at Piper Sandler raised its rating to 'outperform' from its previous 'neutral' rating

• Walt Disney Co. (DIS.US) gains after the company received a positive 'buy' recommendation with a $93 price target at Seaport Global - analysts pointed out that its current valuation reflects extreme levels of investor pessimism

• Tesla (TSLA) loses after another price cut on its most popular electric car models in the U.S.