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Hang Seng index forms a bullish pattern after strong China GDP data

The Hang Seng index bounced back this week after China reported strong fourth-quarter economic numbers. It rose to a high of H$19,500, up from Monday’s low of H$18,680. So, what next for the blue-chip Hang index?

Strong China GDP data

The Chinese economy rebounded in the fourth quarter, helped by the government’s stimulus measures and exports. 

According to the National Bureau of Statistics (NBS), the economy expanded by 5.4% in Q4 after growing by 4.6% in the third quarter. This recovery was better than the median estimate of 5.0%.

The economy expanded by 1.6% on a quarter-on-quarter basis, after growing by 1.3% in the previous quarter. This growth means that China hit its annual growth target of 5.0%.

More data showed that fixed asset investments rose by 3.2%, lower than the median estimate of 3.3%. 

China’s industrial production rose by 6.2% in December, while retail sales rose by 3.7%, higher than the median estimate of 3.5%. 

These numbers mean the Chinese economy is doing better than most analysts expected. It is also a sign that the stimulus measures have started to work and the slow growth of the last few years has ended. 

Still, Chinese bond yields continued falling as analysts anticipate more stimulus from the People’s Bank of China (PBoC). The 30-year yield dropped to 1.87%, while the 10-year yield has fallen to 1.645%. The yield has dropped for 35 consecutive days, the longest plunge in years. 

Still, some analysts warn that China is going through a rough patch. In an X post, Kyle Bass, a popular American hedge fund manager, said that China was still experiencing a complete financial crash. He cited the overnight policy rate and the ongoing real estate crash. 

Trade war risks remain

The Hang Seng index rose after a report from the United States showed that core consumer inflation data dropped in December. That report led to a strong surge in the stock market as investors anticipated a somewhat dovish Fed. 

A key risk for the Hang Seng index is the upcoming Donald Trump inauguration and the potential implications of the market. Trump has pledged to impose major tariffs to help reboot American manufacturing. In line with this, he wants to create an external revenue service that will be tasked with implementing these tariffs. 

Tingyi, SMIC, NetEase, and Zijin Mining Group are the best-performing Hang Seng index stocks this year. MTR, Citic Pacific, China Construction Bank, and China Mengniu Dairy are the top laggards in the index this year.

Hang Seng index analysis

The daily chart shows that the Hang Seng index has bounced back and crossed the 100-day exponential moving average on the daily chart. 

It has moved between the 38.2% and 50% Fibonacci Retracement levels, a positive sign. Another bullish sign is that the index has formed a falling wedge chart pattern, often leading to a strong bullish breakout. 

Therefore, Hong Kong stocks will likely bounce back in the next few weeks, and possibly move above the key resistance at H$20,000. A drop below the support at H$19,000 will invalidate the bullish view.

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Nifty 50 index nears death cross as Indian rupee plunges

The Nifty 50 index retreated to its lowest level since June 7 last year as the Indian rupee continued its downtrend against the US dollar. It also dropped as several prominent Indian companies published weak financial results. It has moved to ₹23,200, down by almost 12% from the highest level in 2024.

Indian rupee has crashed 

The Nifty 50 index continued its downtrend as concerns about the Indian economy continued. That explains why the Indian rupee has continued crashing in the past few months. Data shows that the USD/INR exchange rate has risen to a record high of 86.50, up from last year’s low of 82.65.

The Indian rupee has crashed against the US dollar for several reasons. First, the US dollar index jumped to $110 after the Federal Reserve turned hawkish in its last meeting. The bank slashed interest rates by 0.25% and hinted that it would deliver two cuts later this year.

Second, there are concerns that the Indian economy has slowed in the past few months. The most recent data showed that the Indian GDP grew by 5.4% in the third quarter, lower than expected. As such, there are concerns that the Indian economy will not hit the 7% target it has been used to before. 

Further, the Indian rupee has crashed in line with the ongoing retreat of emerging market currencies. Some of the most notable currencies that have crashed recently are the Chinese yuan, Turkish lira, and the South African rand. 

A weaker Indian rupee has an impact on the country’s stocks. Some, like technology companies Infosys, TCS, and L&T Tech that do a lot of business abroad do well since they are paid in the US dollar and report in the Indian rupee. 

However, a weaker rupee negatively impacts local companies that import many raw materials from foreign countries. 

The Nifty 50 index has also retreated after the recent earnings misses by some Indian tech companies.

Firms like Tata Consultancy Services, Infosys, and Tech Mahindra have announced results that missed analysts estimates. Just last week, analysts at HSBC downgraded Indian stocks, citing their inflation numbers. 

Looking ahead, the next key earnings to watch will be Zomato, ICICI, Aditya Birla, Trident, HDFC Bank, Interglobe Aviation, Tata Communications, and Adani Green Energy. 

Nifty 50 index analysis

Nifty chart by TradingView

The daily chart shows that the Nifty 50 index peaked at ₹26,255 in 2024 and then pulled back sharply in the past few weeks. It has dropped to a low of ₹23,200, its lowest level since June last year.

The index is about to form a death cross pattern as the 200-day and 50-day Exponential Moving Aveages (EMA) cross each other. Also, the MACD and the Relative Vigor Index (RVI) have continued falling. 

The index has formed a head and shoulders chart pattern, a popular bearish sign. Therefore, the Nifty index will likely continue falling as sellers target the next key support at ₹20,000, down by almost 40% from the current level.

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Best blue-chip ETFs to buy for a SWAN and rich retirement

Investing in quality blue-chip ETFs can be a great way to ensuring a rich retirement. Analysts recommend investing in ETFs that combine growth, value, and regular dividends. This article looks at some of the best SWAN blue-chip ETFs to buy and hold for a rich retirement. SWAN stands for sleep well at night. 

Grayscale Mini Bitcoin Trust (BTC)

The Grayscale Mini Bitcoin Trust is one of the best blue-chip ETFs to buy and hold for a rich retirement. That’s because Bitcoin has some of the best features in that it is in a high demand while its supply is in a freefall. There will only be 21 million Bitcoins, most of which have been mined and held by investors. 

Bitcoin also has a long record of doing well and beating American equities. It has jumped from near zero in 2009 to over $100,000, and this trend may go on for a long time. Some analysts anticipate that the price will surge to over $1 million in the next decade. 

Buying and holding Bitcoin in a private wallet is one of the best ways to invest in the coin because it will not cost you any money. If you have to buy a Bitcoin ETF, Grayscale’s mini fund, which has $3.9 billion in assets is the best fund to buy. 

The BTC fund has an expense ratio of 0.15%, making it the cheapest ETF in the industry. It is much cheaper than the iShares Bitcoin Trust (IBIT), which charges a 0.25% fee. A $100,000 investment in BTC will cost $150, while a similar allocation in IBIT will cost $250 annually. Why pay more for a similar investment?

iShares S&P 500 (IVV) or Vanguard S&P 500 (VOO)

The other best blue-chip ETF to buy and hold for a SWAN retirement is either the IVV or the VOO. These popular funds track the S&P 500 index and charge the same expense ratio of 0.03%. The ETF is slightly cheaper than the SPDR S&P 500 ETF (SPY), which charges about 0.09%. 

The S&P 500 index tracks the biggest companies in the United States, including popular brands like NVIDIA, Microsoft, and Alphabet. These are all some of the most important companies globally because of their services. 

The S&P 500 index has a long track record of performance and beating other American exchange-traded funds. While the fund regularly drops, such as during the dot com bubble and the Global Housing Crisis, it always bounces back. 

IVV and VOO ETF investors might also consider allocating cash in funds tracking the Nasdaq 100 index. 

Pacer US Cash Cows 100 ETF (COWZ)

The Pacer US Cash Cows 100 ETF is another blue-chip ETF to consider because of what it does. It is a fund that invests in 100 companies that have a record of growing their free cash flows, one of the most important metrics in a company’s books.

It is a fairly balanced fund made up of companies from most sectors. Energy companies account for 24% of the fund, followed by companies in the technology, consumer discretionary, and healthcare industries. The biggest names in the fund are names like EOG Resources, Valero Energy, Chevron, ConocoPhillips, and Haliburton. 

VanEck Morningstar Wide Moat ETF (MOAT)

VOO vs IBIT vs MOAT vs COWZ

The other blue-chip ETF to consider is the MOAT ETF, which comprises companies with large industry moats. In other words, it looks at companies that have a large competitive advantage against their peers. 

Most of these companies are in the health care, industrials, technology, and consumer staples industry. Some of the most notable members of the portfolio are names like Alphabet, Disney, Bristol-Myers Squibb, Gilead Sciences, and Teradyne. 

The benefit of investing in this fund is that it often beats the S&P 500 index and is uncorrelated with it.

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BNB price prediction: Binance daily trading volume jumps 300% on ‘Trump’s effect’

Cryptocurrencies recorded significant surges over the past few sessions as bulls emerged ahead of Donald Trump’s inauguration ceremony.

Crypto trading platforms confirm the prevailing enthusiasm with surged trader activities.

BitDegree data shows Binance’s 24-hour trading mushroomed from $4.78 billion on 11 January to yesterday’s peak of $19.06 billion.

That suggests a staggering 298.74% within a week. The metric stood at around $17.51 billion at press time.

Chart by BitDegree

Also, data shows Binance dominated crypto trading volumes after Trump’s victory, hitting record peaks in December last year. 

Meanwhile, the surged trading volume on the exchange enriches demand for the native asset BNB.

The altcoin trades at $715 following a nearly 4% surge on its weekly chart.

With players executing speculative positions as attention remains on the US’s 20 January inauguration ceremony, BNB could extend its gains in the upcoming sessions.

BNB’s price turns bullish ahead of the US inauguration

Binance Coin retested $715 in the past 24 hours as cryptocurrencies rallied on Trump’s inauguration optimism.

Enthusiasts expect the 20 January event to welcome a historic pro-crypto government in the United States.

The anticipated “Crypto Ball” could usher in bullish sentiments that will take the digital assets sector to unprecedented highs this year.

BNB displays bullishness as Binance sees increased demand from crypto traders and investors.

The alt jumped from $660 to surpass $715 on Thursday within three days.

The notable jump signaled a soaring demand for BNB as assets in the BNB Chain gained increased attention.

For instance, the Chain’s team unveiled an AI agent tournament on Thursday to attract AI meme developers on the blockchain.

Such ecosystem developments likely contribute to BNB’s surged demand amidst a skyrocketing buying frenzy ahead of the US inauguration.

What’s next for BNB price?

BNB maintained a bullish price structure over the past week as investors flooded the markets ahead of Donald Trump’s inauguration.

Chart by Coinmarketcap

Further, the latest surge saw prices breaking above a descending wedge’s upper boundary, suggesting extended gains.

Magnified buyer activity on Binance amidst broad-based rallies could propel BNB past the nearest $720 resistance.

Clearing this hurdle will trigger smooth rallies to $750. Crypto fan Jake Gagain expects BNB to hit $1,500 during this year’s bull run.

Meanwhile, near-term bearishness could delay the anticipated uptick.

Failure to steady above $720 might plummet BNB to $682. Such a dip will erase the latest gains and nullify the bullish projection.

Nevertheless, sentiments in the crypto industry remain crucial in determining Binance Coin’s performance.

The digital assets space displays significant bullishness as traders capitalize on Trump’s inauguration optimism.

Analysts expect these trends to continue as the new government welcomes a pro-crypto leadership.

Friendlier regulations and bullish developments such as building a Bitcoin reserve and altcoin ETFs suggest a better future for cryptos in the United States and globally.

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EVgo stock price just formed a death cross: buy the dip?

EVgo stock price has crashed hard in the past few months, erasing some of the gains made in the fourth quarter. After soaring to a high of $9.07 on October 25 last year, it has plunged by 60% to the current $3.57. It has moved to its lowest level since August. So, is the EVgo a good stock to buy as it forms a death cross?

Why EVgo share price has crashed

EVgo stock price has crashed after Donald Trump won the election, a move that could affect investments in the EV charging industry. Under Biden, the Inflation Reduction Act (IRA) allocated billions of dollars to expand and improve the charging industry, a move that benefited the company. It received a $1.05 billion conditional loan from the Department of Energy (DoE).

The stock has also crashed because of the recent fires in Los Angeles, where the company has hundreds of stations. These fires have likely destroyed many of its stations and incinerated many electric vehicles. 

EVgo Los Angeles stores

Still, EVgo has some of the best fundamentals and is seeing substantial growth, helped by more deployments and its partnership with General Motors. 

The company’s most recent financial results showed a record $67.5 million in revenue, a 92% increase from last year. Most of this revenue came from the charging network business, which brought in $43.1 million.

This revenue growth happened as the company’s network throughput increased from 37 GWh to 78 GWh. The firm anticipates that its network will more than double in the next few years as demand for charging infrastructure grows. 

EVgo has some of the best fundamentals in the EV charging companies in the US. It is growing faster than other companies like ChargePoint and Blink Energy. Analysts anticipate that its annual revenue for 2024 was $258 million, a 60% annual growth. It will get to $361.5 million this year, and $500 million next year. 

On the other hand, ChargePoint’s 2024 revenue will be $415 million, a 17% annual decline from a year earlier. Blink Charging’s revenue was $126.8 million, a 9.8% annual decline in 2024 and analysts expect that it will get to $158 million this year. 

Read more: EVgo stock price analysis: risk/reward is very attractive

EVgo stock price forms a death cross

EVgo stock chart by TradingView

The daily chart shows that the EVgo share price peaked at $9.07 in October and fell to $3.50 today. Most recently, it dropped below the key support level at $4.75, its lowest level in November last year. 

The stock has formed a death cross pattern as the 50-day and 200-day Exponential Moving Averages (EMA). This is a popular pattern that often leads to a strong bearish breakout. It has also lost below the key support level at $3.82, its highest swing in December 2023. 

Therefore, technically, the stock will likely continue falling as sellers target the next key support level at $1.68, its lowest swing in April 2024. This price is about 53% below the current level.

However, this drop may be a good opportunity to buy the stock because of its growing market share in the EV charging industry. A move above the key resistance point at $4.75 will invalidate the bearish view.

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Why Trump’s presidency could lead to the launch of more crypto ETFs

As spot Bitcoin exchange-traded funds (ETFs) mark their first anniversary and Ethereum ETFs reach the six-month milestone, the cryptocurrency market is gearing up for a potential wave of new offerings.

With pro-crypto Donald Trump set to assume the presidency, market participants anticipate a friendlier regulatory environment that could pave the way for additional cryptocurrency ETFs.

Trump’s public endorsement of Bitcoin has already had a noticeable impact.

According to Nicholas Elward, head of institutional product and ETFs at Natixis Investment Managers, Trump’s stance has bolstered confidence in crypto investments.

“As a result, all signs point toward more positive developments for cryptocurrency ETFs in 2025,” Elward wrote in a note.

This optimism extends to spot ETFs—funds that hold actual cryptocurrencies rather than futures.

Asset managers such as 21Shares, Bitwise, WisdomTree, and Canary Capital have filed with the Securities and Exchange Commission (SEC) to launch ETFs tied to popular digital assets like XRP, Solana, Hedera, and Litecoin.

New SEC chair Atkins expected to make it easier for ETFs to gain approval

The SEC’s approach to crypto regulation has been a significant barrier to ETF approvals.

However, with SEC Chair Gary Gensler stepping down on Inauguration Day, analysts expect a shift in tone.

Trump’s nominee for the role, Paul Atkins, has criticized the SEC’s strict stance on digital assets.

This change could ease the path for crypto ETFs to gain approval.

Despite the optimism, regulatory challenges remain. Dom Harz, co-founder of blockchain network firm BOB, told Barron’s “The momentum we’re seeing with Bitcoin and Ethereum ETFs is just the tip of the iceberg.”

For Harz, “there are regulatory hurdles to overcome” before XRP and Solana ETFs are approved.

But “we will see increased movement towards single-asset ETFs across the board in 2025, especially for well-known tokens with strong brands,” he said.

Bitcoin and Ethereum ETFs maintain dominance

While there is excitement about new ETFs, Bitcoin and Ethereum remain the cornerstones of the market.

Bitcoin funds, according to JPMorgan analysts, have more than $100 billion in assets while Ethereum ETFs have $12 billion.

The iShares Bitcoin Trust leads the pack with over $45 billion in assets, and the Grayscale Ethereum Trust dominates the Ethereum ETF space with $4.6 billion.

In contrast, analysts estimate that Solana ETFs may attract only $3 billion to $6 billion in net new assets while XRP funds may get only $4 billion to $8 billion in investments.

JP Morgan analysts said,

We don’t see a next wave of cryptocurrency [ETF] launches as being meaningful for the cryptoecosystem given much smaller market capitalization of other tokens and far lower investor interest.

Harz acknowledged the disparity, noting that Bitcoin and Ethereum have established themselves as dominant ecosystems.

Still, crypto ETFs present a valuable entry point for novice investors, providing exposure to volatile assets without requiring direct ownership.

Opportunities for institutional winners

The evolving crypto ETF landscape is poised to benefit major market players.

Firms like Coinbase, BlackRock, and market maker Virtu have already profited from Bitcoin and Ethereum ETFs and are likely to see further gains if new ETFs are approved.

While demand for second-tier tokens may be more limited, the combination of a pro-crypto administration and a potentially less restrictive SEC has created a cautiously optimistic outlook for 2025.

Bitcoin and Ethereum will likely retain their dominance, but the market is ready for diversification, with institutional players well-positioned to capitalize on the next wave of crypto ETFs.

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Adani Group stocks gain as Hindenburg Research ceases operations

Adani Group stocks surged today as Hindenburg Research, the short-selling firm infamous for its critical reports, announced its immediate closure.

Hindenburg’s founder, Nate Anderson, cited the completion of their “pipeline of ideas” as the reason for the firm’s shutdown.

The market’s response indicates renewed investor confidence in Adani Enterprises and its subsidiaries.

Adani stocks cheers after Hindenburg exit

Hindenburg Research’s abrupt closure has sent ripples through global financial markets, but nowhere has the impact been more pronounced than on Adani Group stocks.

Shares of Adani Enterprises opened at ₹2,500 today, marking a rise from the previous day’s close of ₹2,388.

Other companies in the group, including Adani Power, recorded substantial gains, as investors reassessed the group’s prospects in the absence of further scrutiny from the short-seller.

The firm, known for its high-profile short-selling campaigns, had targeted Adani Group earlier in 2023.

Hindenburg Research published a highly critical report accusing the Adani Group of financial misconduct.

This led to a massive decline in the conglomerate’s market value. Although the Adani Group has vehemently denied the allegations, the impact of Hindenburg’s report on the conglomerate.

Many of the conglomerate’s listed entities including the flagship Adani Enterprises still trade below the pre-Hindenburg levels.

These allegations wiped billions off the conglomerate’s valuation and drew political and regulatory attention in India. However, with Hindenburg now out of the picture, the Adani Group appears to be regaining momentum.

The report also saw the group’s chairman Gautam Adani’s net worth crashing to record lows. Before the release of the report in 2023, Adani had briefly become the second richest person in the world.

Adani Group stock price action

NDTV (New Delhi Television Ltd) is currently trading at ₹163.47, up 10.99%.

Ambuja Cements Ltd is currently trading at ₹539.40, up 3.87%.

Adani Green Energy Ltd is currently trading at ₹1,074.20, up 3.78%.

Adani Power Ltd is currently trading at ₹562.40, up 2.36%.

Adani Ports and Special Economic Zone Ltd is currently trading at ₹1,155.45, up 2.35%.

Adani Total Gas Ltd is currently trading at ₹675.60, up 2.02%.

Adani Enterprises Ltd is currently trading at ₹2,435.40, up 1.98%.

Adani Energy Solutions Ltd is currently trading at ₹792.90, up 1.63%. ACC (ACC Ltd) is currently trading at ₹1,998.40, up 1.46%.

Implications for Adani and market dynamics

The closure of Hindenburg Research not only marks the end of a controversial era but also alters the dynamics of market oversight and investor sentiment.

While the Adani Group still faces unresolved questions from Indian and global regulators, the absence of a vocal critic like Hindenburg is likely to shift the narrative in its favour.

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AUD/USD analysis: outlook ahead of US retail sales data

The AUD/USD exchange rate rose slightly after the latest US inflation and Australian jobs data. After bottoming at 0.6133 on Monday, the pair rose to a high of 0.6215 as the focus shifted to the upcoming US retail sales data. So, what next for the Australian dollar?

Australia’s strong jobs data

The AUD/USD pair rose slightly after Australia released relatively strong jobs numbers. According to the statistics agency, the economy created over 56.3k jobs in December after it added 28.2k jobs a month earlier. That increase was higher than the median estimate of 14.5k.

The country’s labor participation rate rose from 67% to 67.1%, also higher than the expected 67%. This is an important number that looks at the percentage of working age people who are either working or actively looking for work. The unemployment rate rose slightly from 3.9% to 4.0%. 

These numbers mean that the Australian economy is doing modestly well even as interest rates remains stubbornly high. With inflation falling, the Reserve Bank of Australia (RBA) will likely start cutting interest rates this quarter.

The most recent data showed that the headline Consumer Price Index (CPI) fell to 2.8% in Q3 from 3.8% in the previous quarter. It has dropped from a high of 7.8% in 2023, a sign that the country is making progress.

Still, the prices of key items has remained high and have no chance of going down. For example, the housing shortage has led to higher rents in key cities like Sydney and Melbourne. Insurance costs have also rebounded in the past few months.

The AUD/USD also stabilized after China’s economy made some modest improvement, leading to higher iron ore prices. This is notable since iron ore is one of Australia’s biggest exports.

US retail sales ahead

The AUD/USD pair rose slightly after the US released an encouraging consumer inflation report. While the headline Consumer Price Index (CPI) rose from 2.7% in November to 2.9% in December, the closely watched core inflation dropped slightly from 3.3% to 3.2%.

These numbers pushed the US dollar index (DXY) lower to $108.95, down from last week’s high of $110 as investors assessed the Federal Reserve’s reaction. The Fed has hinted that it would maintain a hawkish tone this year because of the stubbornly high inflation.

The upcoming US retail sales data will be the next important catalyst for the AUD/USD pair. Economists expect the numbers to show that headline retail sales fell from 0.7% in November to 0.6% in December. 

Core retail sales, which exclude the volatile food and energy items, is expected to move from 0.2% to 0.5%.

Retail sales are an important part of the economy because they send a sign about the health of the American consumer. Higher retail sales growth are a sign that consumers are doing well.

These sales may bounce back as many people in California start rebuilding after the recent fires.

AUD/USD technical analysis

AUD/USD chart by TradingView

The daily chart shows that the AUD/USD exchange rate bottomed at 0.6133 last week and is currently at 0.6210. It has remained below the important support level of 0.6360, which was its lowest swing in April and August last year. 

The pair remains below the 50-day moving average. Also, the MACD indicator is below the zero line, while the Relative Strength Index (RSI) has tilted upwards. Therefore, the pair’s path of the least resistance is lower, with the next point to watch being at 0.6135. 

The bearish case is because the Federal Reserve and the RBA will remain divergent this year. In this, the RBA will start cutting interest rates, while the Fed will hold them higher for longer.

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What’s fuelling the recent surge in aluminium prices?

Aluminium prices on the London Metal Exchange have risen sharply over the past couple of sessions after the European Union considered imposing more sanctions on Russian aluminium products. 

On the LME, aluminium prices had hit $2,622 per ton earlier on Thursday, its highest level since November 26, 2024. 

The three-month contract on the exchange was hovering around $2,620 per ton at the time of writing. 

Draft measures

The draft measures from the EU would be part of its 16th package of sanctions on Russia. 

The sanctions would come ahead of the three-year anniversary of the Russia-Ukraine war in late February. 

Restrictions on aluminium would be gradual with a timeframe and scope is yet to be determined, according to reports. 

Proposals, which are being discussed with member states, could be changed before formally introduced. The measures are likely to be rolled out next month. 

The US and the UK banned the import of metals produced in Russia in 2024. The EU has so far banned aluminium products, including wire, tube, pipe, and foil, which account for less than 15% of EU imports.

Russia is the world’s largest aluminium producer outside China, accounting for about 5% of global aluminium production.

EU’s aluminium imports have fallen

The European Union continues to purchase aluminium products from Russia. However, the volumes have declined over the last couple of years after Russia’s invasion of Ukraine. 

European imports of primary aluminium from Russia have decreased by 50% since 2022 and now account for approximately 6% of total imports.

Ewa Manthey, commodities strategist at ING Group, said in a note:

The gap left by Russian supplies has mostly been filled by imports from the Middle East, India, and Southeast Asia, and this trend is likely to continue. 

China, the world’s largest consumer of aluminium, has seen a significant increase in its imports of Russian primary aluminium. 

During the first three quarters of 2024, China imported 263,000 tonnes from Russia, representing 33% of the total imports last year. 

Source: ING Research

“We expect this trend to continue in 2025,” Manthey said. 

China aluminium production nearing capacity cap

Aluminium production in China is reaching record levels, nearing Beijing’s annual capacity limit of 45 million tonnes. 

The current output is approximately 43 million tonnes. Abundant rainfall has facilitated full-capacity operations in the Yunnan province, a region heavily reliant on hydropower for aluminium production, according to Manthey.

This surge in output follows several consecutive years of production cuts in Yunnan due to power shortages caused by drought conditions. The increased availability of hydropower has enabled smelters in the province to operate at maximum capacity, contributing significantly to the record-high national aluminium production figures.

This high production rate, coupled with Beijing’s capacity cap, leaves limited room for further growth.

“China’s capacity cap also means that the country remains a net importer of aluminium,” Manthey further said. 

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Tesla stock priced for perfection: analyst sees 70% slide ahead

Shares of Tesla Inc (NASDAQ: TSLA) are priced for perfection following a 100% increase over the past three months.

Even a minor setback could trigger a sharp decline in this EV stock that’s currently trading at a massive premium to the industry at large.

In fact, Wells Fargo analyst Colin Langan continues to see a possibility of a crash in Tesla stock that could bring it all the way back to the $125 level.  

Langan does not expect the company’s robotaxis to be its savior in 2025.

Minor setback could trigger a crash in Tesla stock

Tesla runs the risk of taking a hit to its net margins as Chinese rivals, including BYD and NIO continue to win share not just in their homeland but also in the international markets.

Their competitively priced, high-quality offerings are resonating well with consumers worldwide.

So, if Tesla misses expectations or so much as takes a cautious view on the future when it reports earnings on January 29th – investors will likely punish its shares rather aggressively.  

Earlier this month, Tesla said it delivered 495,570 vehicles in its fourth quarter to end the year with a total of 1,789,226 deliveries marking its first-ever annual decline in deliveries. The EV company delivered 1.81 million vehicles in 2023.  

Cybercab and Optimus projects are severely overvalued

Wells Fargo cited persistently weak fundamentals as it stuck with its contrarian “underweight” rating on Tesla shares today.

The investment firm remains ultra bearish on TSLA as price cuts are failing to boost its deliveries amidst rising competition from China-based electric vehicle manufacturers.

Additionally, the company’s EVs will turn about 12% more expensive if Donald Trump chooses to rescind parts of the Inflation Reduction Act after taking office on January 20th. “Despite a lot of razzle-dazzle in 2024, these concerns remain,” Colin Langan told clients on Wednesday.

Langan expects Tesla to be hit the hardest if EV tax credits are removed under the new government, citing a 41% decline in sales it witnessed when Germany ended its electric car subsidy programme in late 2023.

Wells Fargo also sees the company’s Cybercab and Optimus projects as severely overvalued with material downside risk. “We believe Cybercab risk outweighs the reward, given the potential for setbacks on regulation or safety that would damage credibility,” it argued in a research note today.

Tesla Inc is expected to report per-share earnings of 64 cents for its fourth financial quarter. In the same quarter last year, it had earned 57 per share. Last week, the EV maker debuted its new Model Y with enhanced features in China.  

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