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Impact of Hertz’s EV Move on Electric Vehicle Stocks Impact of Hertz’s EV Move on Electric Vehicle Stocks

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Ebb in EV Sector After Hertz’s U-Turn

This is an abridged transcript of the podcast.

Thursday on the afternoon edition of this podcast Wall Street Lunch, listeners were apprised of Hertz’s colossal shift in strategy, opting to offload approximately 20,000 electric vehicles, constituting a third of its global fleet, and consequently reinvest in internal combustion engine vehicles.

Electric Vehicle Stocks Reel from Hertz’s Decision

The seismic tremors of Hertz’s announcement were felt across the EV landscape as Tesla (NASDAQ:TSLA) stumbled by 2.87%, Fisker (FSR) plummeted by 6.31%, Lucid Group (NASDAQ:LCID) dipped by 4.40%, Rivian Automotive (NASDAQ:RIVN) waned by 1.47%, and Polestar Automotive (PSNY) nosedived by 8.00%. Meanwhile, legacy automakers Ford (F) and General Motors (GM) weren’t spared either, ending in negative territory.

Hertz’s EV Sell-Off Adds to EV Sector Woes

While the quantum of Hertz’s EV fleet divestiture may not be overwhelming, it signals a departure from its initial plan to purchase 100,000 Tesla vehicles. This move has compounded existing concerns about demand in the EV sector apperehensions, amid retrenchment of some ambitious EV production targets.

This development has stirred the pot, contributing to a growing disquiet in the electric vehicle realm, which has been intensified by rollbacks on assertive EV production objectives.

Tesla’s Operational Hiccups and Labor Stirrings

In a separate setback, Tesla’s Berlin factory has suspended operations for two weeks due to a supply chain disruption resulting from the strife in the Red Sea, impeding the delivery of essential components.

Adding to Tesla’s tribulations, reports have surfaced of an impending pay rise at its U.S. factories, coinciding with the intensifying efforts of United Auto Workers to unionize the workforce at Tesla (TSLA), Toyota (TM), and other non-unionized auto companies.

CVS Health’s Strategic Move and Pharma M&A Buzz

In other news, CVS Health (NYSE:CVS) is set to shutter multiple pharmacy locations housed within Target (NYSE:TGT) stores, citing shifts in demographics, consumer purchasing patterns, and future healthcare requirements.

Amidst speculation about Novartis (NVS) dropping its pursuit of Cytokinetics (CYTK), the rumor mill is churning with whispers of Amgen (AMGN) and Johnson & Johnson (JNJ) expressing interest in acquiring Cytokinetics (CYTK), as the latter’s shares soured by 16% post the speculation.

Delta’s Earnings Call Under Scrutiny

Today, Delta Air Lines (DAL) is scheduled to release its earnings, following a strong year-end traffic performance. Industry observers are keenly awaiting Delta’s prognosis for 2024, given the robust year-end numbers.

Market Close and Pre-Market Preview

Thursday witnessed a seesawing session on Wall Street before concluding mixed, as reflected by the Nasdaq closing marginally higher, the Dow slightly up, and the S&P edging lower. The ensuing pre-market activity has seen Dow, S&P, and Nasdaq futures in negative territory. Additionally, crude oil has surged by 4.3% to over $75 per barrel, while Bitcoin has receded by 2.2% to above $46,000.

Insights into the pre-market movement reveal escalated tensions in the Red Sea triggering bullish strides in several shipping stocks, notably ZIM Integrated Shipping (NYSE:ZIM) and Nordic American Tankers (NYSE:NAT).

Global Economic Indicators

Across the pond, the FTSE 100 and the DAX have made noteworthy gains.

As the day unfolds, the market remains poised to react to critical economic data and geopolitical tremors, underscoring the intertwined nature of global financial systems.

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