Second Half Playbook, EV Spark for Tesla and Rivian, Yellen to Visit China 7/3/23

SPEAKER_1 (0:00)

What's on the horizon for financial markets?

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David Faber (0:31)

Market insight and analysis. You're listening to the opening bell of CNBC's Squawk on the Street.

Good Monday morning. Welcome to Squawk on the Street. I'm David Faber with Leslie Picker and Mike Santoli. We're here at the New York Stock Exchange. Jim and Carl have the morning off. We are heading into an abbreviated session. That ahead, of course, the Independence Day holiday. Market closes today at 1, 1 o'clock Eastern. Bond markets, 2 o'clock Eastern.

That being said, let's give you a look at futures and how we're going to set up for an open that is still at 930 We don't open any earlier. We just close earlier. Our roadmap this morning does start with Tesla and that massive delivery beat shares surging deliveries, top 466,000 for the quarter.

Leslie Picker (1:11)

Plus second half expectations, the NASDAQ coming off its best first half since 1983 and the S&P logging its best quarter since Q4 2021

Mike Santoli (1:22)

And Apple, Amazon, AI and the NVIDIA boom. Tech stocks have been on a tear, but is there more room to run?

David Faber (1:30)

Well, we're gonna start with Tesla of course, extending that rally into the second half of the year. The shares, they are up sharply. This on record second quarter deliveries that as I just said, totaled more than 466,000 vehicles. The number exceeded street forecast. The stock had a very good first half. It seems to be off to a good second half.

Run here, Mike Santoli, and we're very thankful that they gave us some news to discuss as well today.

Mike Santoli (1:56)

Always nice. Always good to have the little weekend nugget that they throw out there every three months. It's fascinating as a mass psychological experiment to see how the market treats Tesla's fundamentals or just the aura of Tesla.

So an absolute beat on the volumes, but I just, I feel like context has to be brought in here. So in the first quarter, they were five to 10,000 units light relative to forecast in volumes. This quarter, they beat by 20,000.

So net-net, they're up 10 or 15 versus what we thought the beginning of the year. 1.8 million units, that's been the expectation for this year since October when it was down from 2 million. And that's what they're on the pace for. They've added 400 billion in market cap year to date. On that. So either it's a car company when you care about the little like, gaining of market share by cutting prices and they're doing this for the long game, or it's just a magical kind of feel good momentum AI machine along with Nvidia trading at 40 times cashflow, even if even da. So I find it fascinating that we're gonna go up on these numbers when you already have 400 billion year to date. And we'll ask Dan Ives about that in a little while.

Leslie Picker (3:09)

It's also gone up on some of the charging news as well, which has been heavily debated as well.

Ives definitely in the camp of this is a game changer akin to AWS. Other analysts are like, it's a plus.

Mike Santoli (3:20)

And not to say it's like the wrong price for the stock. It's just funny to kind of integrate the new volume news alongside how the stock has behaved.

Leslie Picker (3:29)

Without knowing what the actual price of those cars are. Well, for more on Tesla's quarterly deliveries, let's bring in Phil LeBeau, who has been digging in deep into this one. Hey, Phil.

Phil LeBeau (3:39)

Hey, Leslie, you guys set it up perfectly. This is all about how do you look at this number? Do you look at this and say, wow, way better than even the most bullish analysts were expecting just a few days ago? And when you look at the numbers, yes, 466,000 is well above the consensus of 445 And we should point out, even the most bullish analysts were at 450, 451

And as usual, the Model 3 and Y were the bulk of the deliveries, about 95% of the vehicles that they delivered in the second quarter. And as Mike pointed out, they are now about halfway towards their 2023 full-year delivery guidance of 1.8 million vehicles.

I think you add up first quarter, second quarter, you get 889,000. They're gonna increase production and delivery in the second half of this year. So the expectation is, they're gonna at least hit 1.8 million. You've heard Elon occasionally say, oh, we have an outside shot at 2 million.