Tesla slips 14% as Musk–Trump tensions add to market pressure

Local Market Commentary

The JSE All Share index gained 0.8% to 96,411.8 points, with the Top 40 rising 0.92% to 88,796.1 points. South Africa’s current-account deficit narrowed slightly to R35.6 billion (0.5% of GDP) in Q1 2025, beating Bloomberg economists’ median forecast of a R50 billion shortfall, as imports rose faster than exports, narrowing the trade surplus to R221.2 billion from R226.4 billion in Q4 2024. Meanwhile, Chinese electric-vehicle manufacturer BYD (002594.SZ) plans to nearly triple its South African dealership network by 2026 amid intensifying competition in the growing new energy vehicle market, alongside peers GAC, Chery, and GWM.

European Market Commentary

European equities closed modestly higher on Thursday after initially wavering following ECB President Christine Lagarde’s hawkish remarks that tempered expectations for further rate cuts despite a widely anticipated 25 basis point reduction. Lagarde signalled a likely pause in the ECB’s easing cycle after inflation reached the 2% target, prompting markets to price in only one additional cut by year-end. Meanwhile, Ukraine’s finance ministry plans to revise its 2025 budget to increase defence spending amid ongoing conflict, while Germany’s construction sector is set for a modest 1% revenue rebound in 2025 following a 3% decline in 2024, as forecast by the BVB construction association.

 U.S. Market Commentary

Wall Street closed lower on Thursday as a steep 14% plunge in Tesla shares, triggered by escalating tensions between CEO Elon Musk and President Trump, outweighed optimism from progress in US-China tariff negotiations. Despite mutual invitations for state visits announced after Trump and Xi Jinping’s call, investor sentiment was dampened by Tesla’s recent $150 billion market value loss linked to the public dispute and criticism of tax policies affecting EV incentives. Meanwhile, initial jobless claims rose for a second consecutive week, and Kansas City Fed President Jeff Schmid voiced concerns that tariffs may reignite inflationary pressures, suggesting the Federal Reserve is likely to maintain interest rates at the June meeting, reinforcing a cautious stance amid trade uncertainties.

 Asia Market Commentary

Asia-Pacific markets mostly advanced following a positive 90-minute phone call between U.S. President Donald Trump and Chinese President Xi Jinping, agreeing on near-term negotiations to ease the ongoing trade war. Trump characterised the discussion as “very good,” highlighting a constructive outcome for both nations. However, gains were tempered by disappointing Japanese data showing a 0.1% decline in household spending year-on-year in April, missing forecasts for growth, alongside a fourth consecutive month of falling real wages due to persistent inflation outpacing pay increases. These factors add to concerns over Japan’s economic outlook amid global trade uncertainties.

Commodity Market Commentary

Gold prices rose on Friday, poised for a weekly gain as softer-than-expected US economic data tempered early optimism from President Trump’s call with China’s Xi Jinping, while markets awaited upcoming US payroll figures. Meanwhile, oil prices dipped slightly but remained on track for their first weekly advance in three weeks, supported by revived US-China trade discussions boosting demand prospects. Saudi Arabia cut July crude prices to Asia to near two-month lows, a smaller reduction than anticipated despite OPEC+’s planned 411,000 barrels per day output increase, reflecting Riyadh’s ongoing strategy to regain market share and enforce discipline among producers.

 Currency Market Commentary

The South African rand strengthened on Thursday, buoyed by better-than-expected current account figures, while sterling edged higher against the US dollar, one of the few major currencies to hold ground as the dollar recovered from a dip triggered by weak US data on Wednesday. The dollar is set for a weekly decline amid signs of economic fragility and stalled trade negotiations between Washington and key partners. Market focus now shifts to Friday’s US nonfarm payrolls report, which is expected to attract heightened attention following a series of disappointing economic releases this week, highlighting challenges posed by President Trump’s tariff policies.

MultiChoice Group Limited (MCG) -0.17%

MultiChoice forecasts FY25 basic EPS of 1197–1234 cents (FY24: -935c), supported by cost optimisation, the partial sale of NMSIS, and a reduced Showmax liability. Headline loss per share is expected to narrow to 243–272c (FY24: -715c), despite a 47–51% decline in reported trading profit to ZAR 3.9–4.2bn, driven by macro pressures and investment in Showmax. On an organic basis, trading profit declined by a more moderate 7–11%. Adjusted core headline loss per share is forecast to widen to -178–-191c (FY24: 313c), partly offset by lower losses from Nigerian cash constraints. Final results are due on 11 June 2025.

Nictus Limited (NCS) 0.00%

Nictus expects strong earnings growth for FY25, with EPS forecast to rise 75.10–95.10% to 35.84–39.94 cents (FY24: 20.47c) and HEPS to grow 74.07–94.07% to 35.61–39.71 cents (FY24: 20.46c). The results remain unaudited and under the responsibility of the Company’s directors.

Jubilee Metals Group plc (JBL) +4.17%

Jubilee Metals has accepted a conditional offer of up to US$90m to sell its South African chrome and PGM operations, excluding the Tjate Platinum project, enabling reinvestment in Zambian copper growth. The transaction supports Jubilee’s copper strategy amid strong demand and includes a new refining step at Roan and additional high-grade ore procurement, partly funded by an equity raise at a premium. Subject to shareholder and regulatory approval, with Absa CIB as advisor.

AYO Technology Solutions Limited (AYO) 0.00%

The JSE has issued a public censure and suspended R500,000 fine to AYO Technology for breaching paragraph 11.25 of the Listings Requirements by failing to promptly disclose a R600m share repurchase agreement with the GEPF, linked to a March 2023 settlement. The full details were only disclosed nearly two months later, compromising transparency and investor decision-making.

Tesla Inc. (TSLA) -14.26%

Tesla shares tumbled 14.3%, wiping out $152 billion in market value and dropping the company’s market capitalisation below $1 trillion to $916 billion—the largest single-day loss on record for Tesla. The stock closed at $284.70, down 41% from its all-time high of $488.54. The sharp decline followed a public spat between CEO Elon Musk and US President Donald Trump, sparked by Musk’s vocal criticism of recent tax legislation that reduces electric vehicle tax credits and imposes a $250 annual EV fee. Musk had lobbied to amend the bill to protect Tesla’s profitability. Trump retaliated on social media, accusing Musk of ingratitude after Musk was removed from his advisory role. The ongoing feud has injected uncertainty into Tesla’s outlook amid broader market volatility.

Lululemon Athletica Inc. (LULU) -1.32%

Lululemon lowered its full-year profit forecast to $14.58–$14.78 per share from prior guidance of $14.95–$15.15, citing elevated costs linked to US tariff mitigation and weaker-than-expected demand for new products amid intensifying competition from emerging athleisure brands like Vuori. The company highlighted reduced store traffic in the Americas driven by economic uncertainty, inflation, and diminished consumer confidence affecting discretionary spending. Lululemon also projected second-quarter profits below consensus estimates, while its revenue outlook of $2.54–$2.56 billion remained broadly in line with expectations.

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