Market Overview

Only a week remains before the U.S. Federal Reserve's (Fed) policy decision on September 20. Therefore, its governors entered a blackout period when no one of them is ready to make public comments. FedWatch tool clearly shows that more than 90% of investors are betting on a central bankers' pause this time, but the number of sceptics for November and December is hovering around 50%, give or take 10%. 

Investors on Wall Street are awaiting for a consumer inflation data from the U.S., and if the core inflation would continue to be elevated, that may give another clue for the interest rates in the world's leading economy to stay at restrictive levels for longer. A degree of uncertainty does not look too high from this particular point of view, yet it has a negative connotation. Meanwhile, the market sentiment is torn by contradictory corporate news from powerful flagships of Wall Street, which are pulling the major market peloton up and down, and therefore the S&P 500 and Nasdaq indexes seemingly cannot find any definite direction this month. 

That's probably why the current market mood is rather similar to a mental disorder, with extreme mood swings of emotional highs quickly followed by depressive lows. When the crowd becomes depressed, it may feel sad losing interest or pleasure in most investing activities or may indulge in short positioning. Last week after Beijing's introduced ban on using iPhones for any governmental or municipal employees, Apple (APPL) shares dropped ahead of  most other stocks. Yet, the next and this time positive wave of the market mood experience came this Monday with a 10% one-day rally of another public favourite Tesla (TSLA).

The world's most valuable EV-maker responded to analytical predictions made by Morgan Stanley's Adam Jonas as he wrote that Tesla-designed Dojo supercomputer may eventually provide a near $600 billion surge in the company's market value by 2040. He raised a revenue estimate for Tesla's network services business to $335 billion from $157 billion earlier, watching the "emerging opportunity" in third-party fleet licensing and increased average monthly revenue per user. Though the primary purpose of Dojo is to train artificial intelligence (AI) models for self-driving cars, analysts feel that it could open up new market niche "well beyond selling vehicles at a fixed price". If Dojo can help make cars "see" and "react", one may also think of "any device at the edge with a camera that makes real-time decisions based on its visual field", they added in a note.

Morgan Stanley raised its 12-18 month target on Tesla's shares by 60% to $400 per share, which is the best estimate among large Wall Street brokerages, according to LSEG data. Such a forecast would mean a market capitalization of about $1.4 trillion in time, compared to nearly $870 billion at $278 per share where Tesla was traded within 30 minutes after the opening bell on September 12.

Meanwhile, Oracle (ORCL) stock price sank by more than 12% at the same moment, following quite positive quarterly results but weaker than expected forecast. Other companies related to the AI and cloud computing industry also suffered from a partial domino effect. Despite all this, shares of Qualcomm (QCOM) added more than 11% to its market value after the chipmaker revealed an agreement to provide its 5G modems for iPhones in 2024-2026. This cemented its position in the market, yet tied it closely to a trend in Apple, which now looks not so clear as it was before. The whole market case becomes mixed anyway, or deeply differentiated by segments and companies.

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