Market Beats | Tesla Annual Sales Drop for First Time; Suspect Behind Cybertruck Explosion Identified; Rolex Hikes Prices by 8%; US Mortgage Rate Marches Towards 7% Again; Citadel Offers Investors Profit Cashout; Hindenburg Shorts Carvana; US Big Tech Stocks to Lose Reign in 2025

—— Tesla Annual Sales Drop for First Time; Suspect Behind Cybertruck Explosion Identified; Rolex Hikes Prices by 8%; US Mortgage Rate Marches Towards 7% Again; Citadel Offers Investors Profit Cashout; Hindenburg Shorts Carvana; US Big Tech Stocks to Lose Reign in 2025

1. Tesla Annual Sales Drop for First Time

For the first time in over a decade, Tesla Inc. experienced a decline in its annual vehicle sales, despite achieving record deliveries in the fourth quarter due to a significant year-end effort.

Led by Elon Musk, the company reported sales of 1.79 million vehicles last year on Thursday, a slight decrease from its 2023 figures and below the consensus estimate of analysts.

This downturn highlights the tangible challenges faced by electric vehicle manufacturers. Despite the excitement surrounding autonomous vehicles and Musk’s relationship with President-elect Donald Trump boosting Tesla’s stock, tepid consumer interest is impacting electric car sales. This situation could worsen with President-elect Trump’s initiatives to curtail incentives for electric vehicles.

On Tesla’s recent earnings call, Musk informed investors that he anticipates a growth of 20% to 30% this year. This projection is partly driven by the anticipated introduction of a more affordable vehicle in the first half of the year, alongside developments in the company’s autonomous technology. However, the company has remained relatively quiet regarding the specifics of the new vehicle, including its appearance and pricing.

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2. Suspect Behind Cybertruck Explosion Identified

Matthew Alan Livelsberger was identified as the individual who perished in a Cybertruck explosion outside the Trump Las Vegas hotel on Wednesday, according to sources close to the investigation.

The FBI is considering the incident as a potential terrorist attack, as reported by anonymous sources involved in the private investigation. Livelsberger held the rank of master sergeant in the U.S. Army Special Forces and was on leave from active duty, according to an Army statement.

The Cybertruck involved was rented through Turo, the same vehicle-rental platform used by Shamsud-Din Jabbar, who is the suspect in a separate, deadly attack in New Orleans on the same day. Authorities are exploring a possible connection between the two incidents.

According to Denver7, an ABC television station, both Jabbar and Livelsberger were stationed at the same military base.

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3. Rolex Hikes Prices by 8%

Rolex SA, the leading Swiss luxury watch brand, increased the prices of some of its most sought-after models following a surge in gold prices in 2024.

Controlled by a Swiss foundation named after its co-founder Hans Wilsdorf, the Geneva-based company initiated the year by implementing price hikes of up to 8% on certain models crafted from precious metals.

For example, a yellow gold Day-Date with a 40-millimeter black dial now costs €44,200 ($45,809), up from €41,000, as listed on Rolex’s French website as of January 1. Similarly, the price of a yellow gold GMT-Master II has risen to €44,600 from €41,300.

Rolex typically adjusts its prices annually on January 1. These price adjustments often reflect factors such as the demand for premium luxury goods, costs of materials and labor, and inflation.

Notably, in 2024, gold experienced its largest annual price increase in 14 years, surging by 27%.

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4. US Mortgage Rate Marches Towards 7% Again

U.S. mortgage rates are nearing 7%, posing challenges for potential homebuyers in the market.

The average rate on a 30-year mortgage increased to 6.91% as of January 2, up from 6.85% the previous week, according to data from Freddie Mac released on Thursday. Similarly, a measure from the Mortgage Bankers Association rose by 8 basis points to 6.97% for the week ending December 27, marking a nearly six-month high.

These rising borrowing costs are impacting affordability and have recently dampened demand, with the MBA’s index of home-purchase applications dropping nearly 7% to its lowest level since mid-November. Although these figures are adjusted for seasonal effects, they can still experience significant fluctuations during the year-end holiday season.+

“It’s not exactly a good way to start the new year,” remarked Odeta Kushi, deputy chief economist at First American Financial Corp. “Industry experts are coming to the consensus that 2025 is another year of ‘higher for longer’ for the housing market. It’s not great news.”

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5. Citadel Offers Investors Profit Cashout

Citadel recently invited its clients to cash out their profits after achieving a roughly 15% gain in its flagship strategy last year. However, the majority of investors chose to keep their funds within the multistrategy hedge fund.

This opportunity for an elective profit distribution, presented in recent weeks, attracted minimal participation. Out of the billions of dollars in profits generated by Citadel last year, only about $300 million is being withdrawn, according to a source familiar with the matter who preferred to remain anonymous due to the confidentiality of the details.

This approach marks a departure from previous years when Citadel mandated profit redemptions, rather than offering it as an option. The firm, which currently manages $66 billion in assets, had previously allowed clients the choice to redeem profits, a practice it had not employed in recent years.

The option to retain profits within high-performing hedge funds is particularly valuable for investors at a time when opportunities to allocate capital to top investment firms are dwindling. Many of these firms are not accepting new investments, and some are even returning capital to their investors.

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6. Hindenburg Shorts Carvana

Carvana Co. has come under scrutiny from Hindenburg Research, a well-known short-seller, which accused the online auto retailer of engaging in risky business practices and unsustainable growth. The allegations were detailed in a report titled “Carvana: A Father-Son Accounting Grift for the Ages.”

According to the report, Carvana’s subprime loan portfolio is fraught with substantial risk due to lax underwriting standards. Additionally, Hindenburg claims that Carvana uses a company owned by the father of CEO Ernest Garcia III to artificially enhance its financial results. These accusations came to light following Hindenburg’s research, which included interviews with former Carvana employees.

Following the release of the report, Carvana’s stock experienced a significant drop, though it partially recovered and was down about 3% by early afternoon.

Despite this setback, the company’s stock had previously surged 284% last year, fueled by improving financial results and growing optimism that Carvana was overcoming previous concerns related to its heavy debt burden and consistent losses.

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7. US Big Tech Stocks to Lose Reign in 2025

The technology giants known for driving significant market gains are expected to face challenges in maintaining their market dominance in 2025 due to slowing earnings growth. Last year, these companies, often referred to as the “Magnificent Seven”—Alphabet Inc., Amazon.com Inc., Apple Inc., Meta Platforms Inc., Microsoft Corp., Nvidia Corp., and Tesla Inc.—contributed to over half of the S&P 500 Index’s 23% increase.

Lisa Shalett, the chief investment officer for Morgan Stanley’s wealth management unit, expressed concerns during a Bloomberg Television interview, suggesting that the deceleration in profits might catch some optimistic investors off guard. These investors have been anticipating continued high double-digit earnings growth, which may not sustain into 2025.

According to data from Bloomberg Intelligence, the combined earnings growth for these tech behemoths is expected to be 18% this year, a significant drop from the 34% projected for 2024.

This slowdown indicates a shift in market dynamics and suggests that the group may not collectively lead the market as effectively in the coming year.

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