Elon Musk's big Robotaxi event may jolt markets

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Elon Musk attracts a lot of attention. The CEO of Tesla  (TSLA)  has emerged as a hyperactive entrepreneur with a reputation built on the success of his electric car company, Space X, and other ventures.

This week, Musk and Tesla will be the center of attention. On Thursday, Musk and Tesla will unveil the plans for the new Robotaxi at the Warner Bros. studio in Los Angeles.

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It is a key event for Musk and the company, which has had its struggles. The shares fell 44% between the end of 2023 and April 22 on worries about sales stagnating. Since April 22, the shares are up 76% and actually up 0.64% for 2024.

The Tesla event is just one of a busy week of corporate events, investor meetings, economic reports, and the unofficial start of the third-quarter earnings season.

Elon Musk, co-founder of Tesla, is scheduled to unveil Tesla Robotaxis on Oct. 10.<p>Apu Gomes/Getty Images</p>
Elon Musk, co-founder of Tesla, is scheduled to unveil Tesla Robotaxis on Oct. 10.

Apu Gomes/Getty Images

Jobs report cheers investors

Stocks ended the past week with small gains, thanks mostly to investors cheering a very bullish jobs report from the Labor Department on Friday.

The S&P 500 ended the week up 0.2%. The Nasdaq Composite Index added 0.1%, and the Dow Jones Industrials found its way to a 0.1% gain, but Friday saw the index jump 341 points, closing at a record 42,352.75.

Related: Goldman Sachs strategist lays out surprising view on stocks

Three issues seemed to weigh on stocks during the week:

  • Worries on whether the growing violence in the Middle East will erupt in a major war. Oil prices jumped 9% on the week. Retail gas prices continued to move lower.

  • A surprising rise in interest rates after the Federal Reserve's Sept. 18 decision to cut its key interest rate by a half-percentage point.

  • The growing national tensions over the presidential election.

Nonetheless, the S&P 500 is still up 20.6% on the year, with the Nasdaq up 20.8%. The Dow's year-to-date gain is 12.4%.

Tesla's event is important, especially for Tesla

Tesla shares, despite their huge gain since April—including a 22% gain in September—ended the week down about 4%.

Related: Tesla drops bombshell ahead of anticipated robotaxi event

The September gains reflected more confidence Tesla had regained its mojo ahead of the Robocar presentation.

Elon Musk has been advocating the Robotaxi idea for months, arguing that it would revolutionize transportation, particularly in urban areas.

It would boost Musk's contention that Tesla is an artificial intelligence company. Many analysts shake their heads at the idea, saying Tesla is a car company.

More Tesla:

Its Robotaxi (and cars and Cybertrucks, for that matter) are the physical manifestation of a vast network that grabs data from every Tesla vehicle and provides information to drivers on the safest and most efficient routes to a destination.

Musk's risk this week is that he proves unable to convince customers, Tesla fans, and investors that the vehicle will work, although Waymo's taxi seems to work in San Francisco.

Many details are unclear, such as:

  • When a production model will be available.

  • Who might want to operate a Robotaxi? Uber, maybe, owners of the vehicles or even Tesla itself.

  • How a rollout might work.

Tesla is not pioneering robotaxies. Waymo, owned by Google-parent Alphabet  (GOOGL) , has been offering service in San Francisco, Los Angeles and Phoenix, Ariz.

There have been glitches and accidents. In May 2023, a Waymo vehicle in autonomous mode in San Francisco killed a dog, according to a Guardian report.

Pedestrians exit a Waymo self-driving car in front of Google's headquarters in San Francisco.<p>Smith Collection/Gado/Getty Images</p>
Pedestrians exit a Waymo self-driving car in front of Google's headquarters in San Francisco.

Smith Collection/Gado/Getty Images

AMD has a big day on Thursday, too

Semiconductor maker Advanced Micro Devices AMD is holding its Advancing AI event to showcase products such as its AMD Instinct accelerators and EPYC server processors.

Related: Analyst updates AMD stock price forecast ahead of AI event

Barrons noted the presentation will also provide networking and updates on its AI personal computer push.

AMD shares are up about 16% in 2024 (compared with the Nasdaq's 20.8% gain) but is waging a scrappy fight to get recognition and customers.

Earnings season takes off this week

If the second-quarter earnings season seems to be taking forever, the third-quarter reports will start to come out in a big way.

Beverage-and-snack giant Pepsico  (PEP)  reports its results Tuesday morning. The street estimate is $2.30 a share, down from $2.35 a year ago.

Things get more exciting Thursday when India-based software giant Infosys  (INFY)  and Delta Air Lines  (DAL)  and Domino's Pizza  (DPZ)  report.

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Friday is the big day when many financial giants report, including JP Morgan Chase  (JPM) , Wells Fargo  (WFC) , insurer Progressive Corp.  (PGR) , money manager BlackRock  (BLK)  and Bank of New York Mellon BNY come out with results.

Pay attention to the companies' discussions of how they view the U.S. economy. Friday's jobs report, showing non-farm payrolls growing by 254,000 in September, was much more bullish than expected.

The revisions in the October jobs report will tell us more.

The economic reports and Fed talks

The week ahead offers a few economic reports that can easily move markets:

Consumer Price Index for September, due Thursday. Along with core CPI. The consensus estimate is that the index will be up 2.3% from a year ago. That's close enough to keep the Fed happy.

Producer Price Index for September, due Friday. This gauge of inflationary pressures faced by businesses is also projected to show tamer inflation.

Consumer sentiment. The University of Michigan's preliminary October consumer sentiment index is due Friday. This index helps gauge whether consumers are confident about the coming months.

Fed speakers. All week. Everyone except Fed Chair Jerome Powell will speak somewhere next week. The remarks of Fed governors are posted on the Federal Reserve website. Presidents of the 12 Federal Reserve banks post their texts on their banks' websites. Neel Kashkari, president of the Minneapolis Federal Reserve Bank, caused stocks to fall sharply last spring when he suggested may have to be boosted because of sticky inflation.

Fed minutes. These are due Wednesday and can be found here. They summarize the September meeting that resulted in the Fed's rate cut decision. The description of the discussion is always toward the end of the minutes.

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