OptionsDesk broker Sebastian Blanco joins Proactive's Stephen Gunnion with the latest market trends and strategies.
Blanco highlighted the anticipation surrounding the European Central Bank's (ECB) upcoming rate decision. According to him, markets are expecting a 1.3% rate cut with an 80% probability of the first cut by April, following ECB president Christine Lagarde's statement at the World Economic Forum about delaying rate decisions until late spring wage pressure data is available.
The conversation then shifted to major corporate earnings reports, focusing on Tesla. Blanco noted Tesla's 4Q earnings per share are projected at 73 cents, a 38% decrease year-on-year. This decline in profitability is concerning for investors, particularly as Tesla has been surpassed by Chinese EV maker BYD, backed by Warren Buffett, as the world's leading electric vehicle manufacturer.
Tesla's stock has fallen 14.6% since the start of the year, the worst among the 'Magnificent Seven', due to a price war aimed at boosting sales amidst rising competition.