The Markets Today: S&P 500 Braces for Correction; Tesla’s 2024 Plunge Hits 24%

Key Points

• Fundstrat’s Tom Lee predicts a 7% correction in S&P 500.
• Tesla’s shares plummet 24% in 2024, becoming S&P 500’s worst performer.
• Eswar Prasad suggests a second Trump term could benefit China’s economy.
• NTSB report on Boeing 737 Max highlights serious quality control issues.
• Singapore is advancing as a global AI hub, backed by government and innovation.

In today’s fast-paced financial world, staying ahead means keeping a finger on the pulse of the market’s latest developments. Here are the five key insights every market watcher should be aware of:

1. Bear Pause: Fundstrat’s Tom Lee Predicts S&P’s Imminent Correction

Wall Street’s prominent bullish strategist, Fundstrat’s Tom Lee, anticipates a stock market correction after the S&P 500’s 21% rally over 14 weeks. Lee cites historical patterns and market behavior to predict a short-term peak, expecting a drawdown. Despite foreseeing a 7% decline to around 4,600, he remains optimistic about 2024, projecting the S&P 500 to reach between 5,200 and 5,400. Lee also highlights concerns about the timing of the Federal Reserve’s interest rate cuts as a potential trigger for the correction.

2. A Shocking Decline: Tesla’s Spark Fades in the S&P 500

Tesla, once a market darling, is now trailing as the worst-performing stock in the S&P 500 this year. Plagued by numerous recalls and CEO controversies, its shares have plummeted 24%, making it a less desirable investment than troubled Boeing and struggling Etsy. With the S&P 500 up by 4%, Tesla’s downfall is stark. As Valentine’s Day nears, it seems investors are breaking up with Tesla, questioning its reliance on Musk’s erratic leadership.

3. Trump Card: Ex-IMF Official Sees Possible Boost for China Under Second Trump Term

Economist Eswar Prasad, former IMF official, foresees challenges for China’s economy, predicting difficulty in maintaining a 4-5% growth rate. Despite Beijing’s efforts to stabilize the market and economy, persistent issues like the property crisis and deflationary pressure hinder progress. However, Prasad notes a potential upside for China: a second Trump presidency in the U.S. could inadvertently enhance China’s global economic and political influence due to likely trade protectionism and U.S. isolationism.

4. Bolt Blunder: NTSB Finds Missing Links in Boeing 737 Max Mishap

The NTSB’s preliminary report reveals a startling oversight in the Alaska Airlines Boeing 737 Max 9 incident: four crucial bolts were missing, causing a door plug to blow off mid-flight, leading to rapid depressurization and an emergency return to Portland. This incident, with no serious injuries, raises serious quality control concerns at Boeing and its suppliers. Investigations continue into how the bolts were omitted during assembly, intensifying scrutiny on Boeing as it strives to rebuild trust after past tragedies.

5. AI-lion City: Singapore Roars Ahead as Potential Global AI Hub

Singapore is emerging as a global AI hub, according to Google Cloud. Key factors include a supportive environment for innovation and strong public-private partnerships. Caroline Yap of Google Cloud highlighted these aspects at the Explore AI summit, a joint event with the Singapore government.

Singapore’s proactive AI strategy and initiatives like the AI Trailblazers, providing resources and platforms for AI development, further its potential. The city-state’s focus on AI governance and ethics, alongside efforts to address talent shortages and incentivize private investment, strengthens its position in the global AI landscape.