ASX LIVE: Australian shares to fall, US stocks drop on higher rate forecasts

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Australian shares are set to open lower, amid losses in New York. US central bank boss Jerome Powell says Fed not close to ending its rate-rising cycle.

The relentless decline in the shares of Tesla has pushed the electric-vehicle maker’s valuation to close below the half-trillion dollar mark for the first time since November 2020.

The stock closed down 2.6 per cent at $US156.80 in New York on Wednesday, taking its market capitalisation to $US495 billion, and bringing its decline this year to 55 per cent. The slump is painful for a swath of investors: the company is the sixth-biggest member of the SP 500 Index as of Wednesday’s close. It’s been the third-largest drag this year on the benchmark, which Tesla joined two years ago next week.

On top of that, the company’s own troubles, including supply shortages, soaring raw material costs and production disruptions, as well as Elon Musk’s preoccupation with turning around newly acquired Twitter, have all weighed heavily on the stock. Musk has been dethroned as the world’s richest person because of the slide.

Meanwhile, the outlook for next year is darkening as well. On Wednesday, at least two Wall Street analysts struck a cautious note on Tesla and the electric vehicle sector overall. Goldman Sachs lowered estimates to reflect “softer” supply and demand, while Morgan Stanley warned that the brakes were “screeching on electric vehicle demand,” and cut its projections for adoption in the US.

 

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Would be nice if the ASX got a life of its own, instead of living vicariously through other exchanges.

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ASX LIVE: Australian shares to fall, US stocks drop on higher rate forecastsAustralian shares are set to open lower. US stocks swing wildly in frantic trading. Jerome Powell says Fed not close to ending its rate-rising cycle.
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