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Tesla Shares Surge After Morgan Stanley Raises the Valuation

Miguel A. Rodriguez
Miguel A. Rodriguez
12 September 2023

Tesla shares rose after Morgan Stanley predicted Tesla’s Dojo supercomputer could add to its market value. Apple shares also regained some ground in the wake of the release of the new iPhone today. 

Tesla shares jumped more than 9%

The major Wall Street indexes gained on Monday as buyers flocked to Tesla and other large-cap stocks.  

In response to Morgan Stanley's announcements that it had raised the electric car maker's valuation from neutral to "overweight" in light of the possible increase in market value brought on by Dojo, the artificial intelligence supercomputer created by Tesla, the stock of the electric car maker increased by more than 9% during the session.

Other technology stocks, including Alphabet, Microsoft and Amazon, performed more modestly but remained positive.

Stocks of Apple recovered some losses

With investors anxiously anticipating the reveal of the new iPhone model, that will take place today, Apple also rebounded after a roughly 6% dip last week because of China's limitations on iPhone use by government employees.  

With robust oil prices and better-than-expected economic data fuelling worries about persistent inflation forcing the Federal Reserve (Fed) to maintain high interest rates for an extended period of time, U.S. stocks experienced falls last week. It seems the market now has a more positive risk mood heading into this week.

US CPI will be released tomorrow

In fact, market interest rates (bond yields) are still rising, with the 10-year bond at 4.29%, and they aren't showing any signs of slowing down. The important US Consumer Price Index (CPI) data for August will be released tomorrow, providing additional context and possibly indicating how the stock markets will develop going forward. The stock market may once again encounter periods of significant volatility if the current rising pressure on interest rates persists, which would happen with a high CPI reading.

US Dollar slightly weakened

Even though interest rates were still at their highest point yesterday, the US Dollar slightly declined on the foreign exchange market. Apart from the USD/JPY pair, which was pressured to go lower by the strength of the Japanese Yen after the governor of the Bank of Japan, Ueda, hinted in some statements at potential interest rate increases for the end of this year, most of the pairs' movement can be attributed to a technical correction. The Japanese 10-year bond's yield skyrocketed to 0.70%, the highest level in the previous thirteen years.

Tesla graph Sep 12 2023.png

Tesla monthly chart September 12, 2023. Sources: Bloomberg, Reuters

Key Takeaways

  • Tesla stocks surged after Morgan Stanley predicted the company’s value will increase.
  • Stocks of Alphabet, Microsoft and Amazon also performed well yesterday.
  • Apple regained some of its losses.
  • Markets await the release of the new iPhone today.
  • Bond yields are at the highest levels in months.
  • The 10-year bond is at 4.29%.
  • Investors wait for the US CPI data for August will be published tomorrow.
  • The US Dollar slightly declined yesterday.
  • USD/JPY was pressured by comments that interest rates may increase in Japan.
  • The yield of the Japanese 10-year bond shot up to 0.70%.

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Miguel A. Rodriguez
Miguel A. Rodriguez

Miguel worked for major financial institutions such as Banco Santander, and Banco Central-Hispano. He is a published author of currency trading books.