Broad rally for equities as UK goes for lockdown-lite, Tesla fails to spark, precious metals under pressure

European markets rose 1% in early trade on Wednesday, extending mild gains from the previous sessions following the steep selling on Monday. Yesterday, the S&P 500 rose 1%, and the Nasdaq climbed 1.7%, whilst markets across Europe were a little more mixed with London and Frankfurt higher but Paris lower.

Today sees solid bid across sectors and bourses with a slate of manufacturing and services PMIs in focus. The FTSE 100 recovered the 5,900 level, with even IAG and easyJet getting in on the action, rising 6% each. Safe-haven play Fresnillo was off by a similar margin as silver and gold prices come under a good deal of pressure again today.

There is no clear evidence for the airlines to rally except that perhaps there was an overreaction earlier in the week.

PMIs underline the fragility of the recovery

I will issue the usual caveat about extrapolating too much from these diffusion indices, but they do highlight an interesting trend. The manufacturing sector can sustain a recovery as firms can work out how to function in the new environment, but it’s harder for many service sector businesses to operate at all, which drags on the number.

Service sector companies are also much more exposed to the caprice of lockdowns. Both German and French services PMIs came in under 50, indicating contraction (survey respondents think things are worse than the month before), while both countries’ manufacturing PMIs pointed to expansion.

The UK is heading for a second lockdown-lite

This will dent the recovery and hit some sectors especially hard, but perhaps more importantly this is spurring the chancellor into action. With the furlough scheme slated to end in October, there is a risk of a jobs calamity even without further lockdown restrictions, which are a possibility.

Rishi Sunak is reported to be working on new plans to support jobs, which may ease worries among investors that the UK economy could fall off a cliff for a second time just as the Brexit process reaches its finale.

Individual stocks are putting some very big moves daily which only indicates the kind of dislocation in market pricing, uncertainty about the path of the pandemic and the fact that no one really knows where a lot of these securities ought to be trading.

Whether it’s value or growth, tech or travel, the unevenness of both the recovery and government policy means it’s hard to know what a fair value is. Trying to extrapolate a narrative to fit all of this is often a fool’s errand.

Tesla stock tumbles after Battery Day reveals fall flat

A case in point: Tesla shares fell over 5% and extended their decline by a further 7% in after-hours trading, despite Elon Musk outlining the company’s plans to halve the cost of battery manufacturing and market an electric car at $25,000. The new battery tech would deliver 16% more range and x6 more power, but the company said production in volume is three years away.

There is some debate about whether Tesla’s Battery Day announcements amount to incremental or revolutionary changes to battery technology, but two things are clear: Tesla has not suddenly acquired warp speed capability, but clearly the company has a roadmap to cheaper, longer life battery technology that it will make itself and will allow it to lead the EV field for a while longer.

Panasonic and other suppliers were hit with Tesla planning to make its own battery. Nevertheless, given all the anticipation around a potential game-changer in battery technology, investors were a little underwhelmed by the news. Tesla’s Frankfurt-listed shares declined 7% at the open, before paring losses a touch.

Nike climbs as online sales surge, Ant Group takes another IPO step

Nike shares shot higher after-market following an 82% rise in online sales, with the company expecting to benefit from a permanent shift to direct online sales. EPS of $0.95 beat the $0.47 expected, on revenues of $10.6bn vs the $9bn expected. Nike continues to benefit from its strong brand presence that is akin to Apple in the smartphone space, as well as large investments in its web and mobile platforms. Shares in Adidas and Puma rose about 4% on the read-across.

Ant Group took a step closer to its mega-IPO after it submitted documents for registrations of the Shanghai side of the listing. The company plans to list both on Shanghai’s STAR Market and in Hong Kong, with valuation estimates in the region of $250bn-$300bn.

Cable softens, BoE Baily fails to quell negative rate fears

In FX, GBPUSD traded under 1.27 in early European trade after the downside breach of the 200-day EMA presented bears with an obvious momentum play. Yesterday’s move under the 1.2760 level has opened up the path to further losses and today the pair is trading through the 100-day line and testing the 38.,2% retracement at 1.2690.

Whilst Andrew Bailey attempted some push back on negative rates, saying they are not imminent, the takeaway from his comments was that this unorthodox and dangerous tool is very much being actively considered by the bank’s Monetary Policy Committee.

Chart: GBPUSD downside exposed

The USD continues to find bid, which is weighing on gold. DXY extended its push out of the channel, forcing gold to trade under $1,900 and test the 50% retracement around $1875, corresponding with the horizontal support of the descending triangle formed by the August lows. Silver has a bearish bias after breaching the August low.

Chart: Dollar continues breakout

 

Chart: Gold tests 50% retracement

Chart: Silver breaks August lows

الأسبوع المقبل: يوم البطارية لشركة Tesla يثير اهتمام المستثمر

تستضيف Tesla يوم الثلاثاء يومها للبطارية، الذي طال انتظاره وحظي بصخب إعلاني كبير، مع ترقب المستثمرين لإعلان عن تكنولوجيا محتملة تغير قواعد اللعبة. في الوقت ذاته تتدفق البيانات الاقتصادية بمؤشرات مديري المشتريات الآنية من منطقة اليورو وقرار معدل الفائدة لبنك الاحتياطي النيوزيلاندي وتقرير الوظائف الأمريكي الأسبوعي.

من المقرر أن يتحدث كل من رئيس الفيدرالي جاي بويل ومحافظ بنك إنجلترا آندرو بايلي في الأيام القادمة، بعد اجتماعات اللجنة الفيدرالية للسوق المفتوحة ولجنة السياسة المالية في الأسبوع الماضي.

يوم البطارية لشركة Tesla

سينعقد اجتماع حملة أسهم Tesla السنوي لعام 2020 يوم الثلاثاء 22 سبتمبر 2020 في الساعة 1:30 م بتوقيت المحيط الهادي. بعد هذا الاجتماع مباشرة، ستعقد Tesla حدث يوم البطارية، والذي أثار كمًا من التكهنات حول الأسهم مماثل لما قد يوشك الرئيس التنفيذي إلون ماسك على كشفه.

يمكن العثور على دليلنا الكامل للحدث هنا.

كيف يسير التعافي الاقتصادي؟

هل يفقد التعافي الاقتصادي العالمي زخمه؟ بينما كان الازدهار بعد عمليات الغلق أمرًا سهلًا، ستكون العودة إلى مستويات 2019 أكثر صعوبة. أصبح الحصول على المكاسب الهامشية أصعب وبدأت بعض المؤشرات الاقتصادية عالية التردد في الاستقرار. على سبيل المثال مؤشرات مديري المشتريات في منطقة اليورو صارت أقل حدة.

من المقرر أن تصدر الجولة الأخيرة لاستطلاعات الرأي الصناعية والخدمية الآنية في منطقة اليورو والمملكة المتحدة والولايات المتحدة يوم الأربعاء. في الوقت ذاته سيشاهد المتداولون أرقام مطالبات البطالة الأمريكية الأسبوعية عن كثب كما هو الحال دائمًا يوم الخميس، بينما تقدم أوامر السلع المعمرة الأمريكية يوم الجمعة مؤشرًا رائدًا مفيدًا لطلب الأعمال.

كيف تستجيب البنوك المركزية؟

أشار الاحتياطي الفيدرالي وبنك انجلترا إلى أنهما مستعدان لفعل المزيد كما يتطلب الأمر، وأن معدلات الفائدة من المقرر أن تبقى منخفضة لمدة طويلة. يشهد هذا الأسبوع تحرك بنك الاحتياطي النيوزيلاندي بعد أن أعلنت البلد عن أسوأ انتكاساتها في عقود.

حيث تقلص اقتصاد البلد بنسبة 12.2% بين أبريل ويونيو، وهو الانحدار الأشد منذ بدء نظام القياس الحالي عام 1987 بسبب إعاقة تدابير الغلق الوطني الصارم للنشاط.

ينظر بنك الاحتياطي النيوزيلاندي في المعدلات السالبة مع قول مساعد المحافظ كريستيان هاوكسبي في الشهر الماضي إن البنك المركزي «يعد الأعمال التحضيرية» للمزيد من أدوات السياسة، والتي تتضمن المعدلات السالبة. هل يحققون القفزة الآن، أم يقدِّرون أن الاقتصاد سيتعافى بفضل عدد الحالات المنخفض للغاية؟

 

تسليط الضوء على XRay هذا الأسبوع

اقرأ كامل الجدول الزمني لتحليل السوق المالي والتدريب عليه.

15.00 UTC 21-Sep Tesla Battery Day Preview
17.00 UTC 21-Sep Blonde Markets
17.00 UTC 22⁠⁠⁠-⁠⁠⁠⁠⁠⁠Sep Webinar: Identify Trends and Choose Technical Indicators
14.45 UTC 24⁠⁠-⁠⁠⁠⁠⁠⁠Sep Master the Markets
17.00 UTC 24⁠-⁠⁠⁠⁠⁠⁠Sep Election2020 Weekly

الأحداث الاقتصادية الأساسية

أحترس من أكبر الأحداث على التقويم الاقتصادي هذا الأسبوع. متاح على المنصة تقويم كامل للأحداث الاقتصادية و أحداث الشركات.

06:00 UTC 

22-Sep  Kingfisher – Half-Year Results 
14.00 UTC  22-Sep  Eurozone Consumer Confidence 
02.00 UTC  23-Sep  Reserve Bank of New Zealand Rate Decision 
07.15 – 08.00 UTC  23-Sep  Eurozone Flash Services / Manufacturing PMIs 
Pre-Market  23-Sep  General Mills – Q1 2021 
08.30 UTC 23-Sep  UK Flash Services / Manufacturing PMIs 
14.30 UTC 23-Sep  US EIA Crude Oil Inventories 
23.50 UTC  23-Sep  Bank of Japan Meeting Minutes 
08.00 UTC  24-Sep  German Ifo Business Climate 
Pre-Market  24-Sep  Accenture – Q4 2020 
12.30 UTC 24-Sep  US Weekly Jobless Claims 
14.30 UTC  24-Sep  US EIA Natural Gas Storage 
After-Market  24-Sep  Costco Wholesale Corp – Q4 2020 
11.00 UTC  25-Sep  Bank of England Quarterly Bulletin 
12.30 UTC 25-Sep  US Durable Goods Orders 

 

Tesla Battery Day primer: Can Musk deliver as TSLA rallies on event hype?

Tesla Battery Day primer

  • Battery Day event scheduled for Sep 22nd
  • Signs of speculative buying ahead of event
  • Elon Musk hints at more energy dense batteries

Investors are charged up with excitement ahead of Tesla’s Battery Day event. Shares have rallied about 25% in the last week after the stock tapped on the 50-day simple moving average following some heavy selling in the middle of the Nasdaq’s early September pullback.

This of course followed disappointment at missing out on S&P 500 inclusion, and some very aggressive bid that took place in and around the stock split. So is Battery Day all hype, or is there something to it?

Tesla’s 2020 annual meeting of stockholders will be held on Tuesday, September 22, 2020, at 13:30 Pacific Time. Immediately after this meeting, Tesla will hold the Battery Day event.

CEO Elon Musk, in his usual caution, said in January that the event will ‘blow your mind’. Recently he toned it down a bit, teasing ‘many exciting things’. Whilst we should always take his pronouncements on Twitter with a pinch of salt, clearly there is a high degree of expectation and speculation – and speculative buying of TSLA stock – taking place in the run-up to the event.

Batteries matter

To deliver on its EV promise, Tesla needs to own the battery space. Without this, it’s not so different to an OEM. Musk commented on this at Tesla’s Q4 2019 earnings call in January, explaining that in order to ramp up Model Y production, introduce the Cybertruck and launch the Semi electric truck, a lot more batteries would be needed.

“So, the thing we’re going to be really focused on is increasing battery production capacity because that’s very fundamental because if you don’t improve battery production capacity, then you end up just shifting unit volume from one product to another and you haven’t actually produced more electric vehicles,” Musk said.

And whilst Tesla has a lead in the powertrain stakes, traditional players may catch up. “It’s worth noting that the Model S has like a 100 kWh pack, the [Porsche] Taycan has like a 95 kWh pack. The Model S is steadily approaching 400 miles of range. The Taycan has 200 miles of range. So we must be using that energy pretty efficiently, and the powertrain is a big part of that,” Musk added in January.

Whilst battery production is one thing, making the batteries more efficient is quite something else. Tesla’s acquisition of Maxwell, an ultra-capacitor manufacturer and battery technology business based in San Diego, is a considerable factor.

What to expect from Tesla’s Battery Day

My expectation is that Musk is about to announce if not a leap then a progression in battery technology that brings EV costs down to, or close to, traditional automobiles. It would be a surprise if Tesla were not able to say it has made further progress on batteries that are more energy dense and have a longer life.

We note for example, that on August 24th this year Musk said battery cells of 400 Watt hours per kilogram (Wh/kg) with a high cycle would be possible in volume within 3 to 4 years, way beyond the current 260 Wh/kg in the Model 3, which could indicate knowledge of some improvement coming in the Tesla batteries.

There has also been speculation that Tesla may unveil “silicon nanowire anode” technology that can greatly increase battery density and cell life. All of this remains speculation, of course.

If Tesla can both lower costs and increase battery energy density and life, it would be a significant step forward for the company and further cement its lead in the EV space. However, given the recent rampant speculation on the stock and Musk’s capacity to somewhat overstate his case, there is a considerable risk of a buy-the-rumour, sell-the-fact trade.

Tesla Stock Signals

Whilst client flows remain positive (87% bullish), analysts remain downbeat – the average price target of $300 vs the current $450 for the stock implies a 34% downside. We also note that hedge funds have been decreasing their holdings.

Baillie Gifford, one of the top shareholders, recently reduced its stake as the holding approached fund limits, but also because of fears that valuations had just got silly. Our insider signals tool also delivers a sell signal on the stock.

Pound at 6-week low, European stocks stabilise but risk sentiment fragile

Tech stocks bled heavily again for a third straight day as trading resumed on Wall Street following the Labor Day weekend. Tesla slumped a whopping 21% to notch its worst day ever. The other major tech giants also dropped heavily as the Nasdaq fell 4% and entered correction territory – down 10% from its recent peak.

Whilst this began as more of a technical correction within tech following the astonishing ramp in August than a broad risk-off move, it is nonetheless bleeding into the broader market and dragged down the majority of stocks. US benchmark yields have retreated and oil prices have rolled over.

SPX not far behind after Nasdaq enters correction territory

There was some rotation going on – Disney, Nike, McDonald’s, Ford and GM rose – but the S&P 500 still declined almost 3% and is not so far off correction territory itself. On the whole there is a sense that this selloff represents that sentiment has become too exuberant and needed to correct.

We may expect the US market now to chop in W-pattern over the coming months and follow the path taken by European equities since June with the loss of momentum in the economic recovery and US election risks likely to become more visible in equity markets.

Asian equities fell with the weak US handover. European stocks opened a little bit higher in early trade but risk sentiment appears very fragile. The FTSE 100 is enjoying the pound’s distress with heavyweight dollar-earners like BP, Shell, Unilever and British American Tobacco among the best risers.

In dollar terms the market is flat. The index got a confidence boost as Barclays raised their call on UK equities to ‘market-weight’ from ‘underweight’.

Increase in coronavirus cases weighs on recovery outlook

Nevertheless, investors are becoming worried again about rising Covid cases across many developed markets which threaten the trajectory of the recovery and may well weigh on demand in a number of sectors.

The evidence is evident in a couple of markets. Oil prices have rolled over with WTI dropping under $37 to hit its weakest since the middle of June. Another tell that this tech-led selloff is more than just a simple technical correction are bond yields.

US 10-year Treasury yields logged their biggest drop in a month, sliding from 0.72% Friday to 0.682%. Despite the move in yields gold prices remain resolutely stuck to the $1930 anchor having tested $1906 and the 50-day SMA yesterday.

There is also some negative headlines around work on a vaccine which may weigh on risk a touch, or at least provide algos with a sell signal. AstraZeneca shares fell after it was forced to pause clinical trials of its Covid-19 vaccine candidate after a participant in the study was taken ill.

Such are the problems with pinning hopes on a vaccine for a return to normal to be possible. The worry is that while we have all kind of assumed that one company will come up with vaccine later this year, it’s not going to be plain sailing.

Tesla tumbles after S&P 500 snub

Tesla shares got well and truly smoked after it was not added to the S&P 500, to some surprise. Tesla stock hadn’t traded below its 50 day average price since April 13 and closed the day at this level at $330 – this level needs to hold or we could see further declines for the stock.

The market was surprised by Tesla not being included in the index. At the time, we talked a lot about how possible inclusion in the S&P 500 was a big driver of the stock’s rally earlier in the year and therefore being snubbed will force some funds to rethink whether they need to hold such a high beta stock if it’s not part of the index.

Pound sinks on Brexit worries, strong dollar

In FX markets, sterling is finding the going very tough, sinking to a 6-week low with the dollar catching a bid and Brexit risks weighing. DXY has advanced to clear 93.50 and test the top of the descending wedge, while EURUSD dropped further under 1.18 ahead of the ECB meeting which might be a lot more dovish than the market thinks.

This is not a pure dollar move by any means – the pound was also at its weakest since the end of July against the euro, too. For cable this has meant the build-up of downside pressure has blown out the stops at 1.30 and GBPUSD is running south with not a lot of support until 1.28.

Brexit risks are a major factor – the UK government admitted it will break international law in order to fix the withdrawal agreement should there be no deal by October 15th. Talks continue today between the UK and the EU and there are clear headline risks as traders see a higher chance of no deal emerging.

However, we should caution that a deal will likely emerge at the last moment after considerable brinkmanship from both sides that makes it seem as though a deal is impossible. Nevertheless, with still 5 weeks to go before the deadline imposed by the British government, there may be a very rough ride ahead for the pound.

Chart: Stops are out as GBPUSD trades below 50-day SMA

Chart: Having pushed clear of the 21-day SMA the dollar tests top of the descending wedge, 50-day SMA above

FTSE lags as dollar continues to drop

Back to school: the unruly mob are back. But that is enough about MPs going back to work – children start the autumn term this week and the furlough scheme starts to unwind with the government reducing its contribution to employees’ wages to 70% in September.

Furlough forever is simply not an option – zombie staff, zombie businesses. But it means unemployment is surely set to rise – and consumer confidence always follows. The chancellor is floating a tax raid – better to monetize the debt surely?

Stocks soft after strong August

Stocks were a tad weaker on Monday, but August was a great month. The MSCI World index rose 6.6% and the S&P rallied over 7% to record their best August since 1986. The Nasdaq rose 10%. August is usually a poor month for stocks.

Tuesday morning saw a firm bounce for the major European bourses, though the FTSE 100 lagged as it played catchup following the bank holiday. A stronger sterling is also dragging on the big dollar earners. AstraZeneca has started large-scale human trials of its coronavirus candidate vaccine in the US.

The Federal Reserve has put a floor under markets and a ceiling on rates, delivering conditions where stocks can only float higher. We call this TINA – There Is No Alternative. It’s not sustainable of course, but it won’t stop the Fed and other central banks continuing to inflate the bubble. The Fed’s policy shift on inflation has marked a important change for the central bank and it may be followed by the ECB and others.

Vix futures – the so-called ‘fear gauge’ are telling another story. These have started to grind higher despite stocks rallying, which raises a warning about the future path of the market. As previously mentioned, volatility should rise as the election approaches and the races proves far tighter than it currently looks. In summary, the options market is sending a signal that the stock market is not.

Strong China manufacturing PMI lifts sentiment, despite soft readings from France, Spain

Sentiment this morning is helped by data showing Chinese factory activity rose at the fastest pace since 2011. French and Spanish manufacturing PMIs softened, dropping under 50 to signal contraction, while Italy’s was a little better than expected at 53.1.

Some of the moves in US shares are striking. Apple rose over 3% to $129 after splitting, whilst Tesla shares rocketed 13% on its busiest day ever. Stock splits shouldn’t make a difference, except this time they have. Tesla is up 74% for the month.

Zoom races higher after smashing earnings forecasts

Zoom rose almost 23% in after-hours trade after it reported a 355% rise in revenues to $663.5m for the July quarter, smashing forecasts for around $500m. Zoom has proved to be a Covid winner of epic proportions – but shouldn’t we all be going back to the office by now? The UK significantly lags Europe and others in ‘getting back to work’ statistics – this has a huge implication for productivity and for the wider economy.

The dollar continues to soften and trying to guess the bottom is akin to catching a falling knife. The dollar index sank to fresh two-year lows in the wake of the Fed’s inflation shift. Perennial dollar bulls have been caught off guard with the unwind, however the Fed’s recent shift on inflation targeting only underlines that bears called this early.

More inflation and a central bank prepared to let it happen should reduce the purchasing power of the dollar and therefore it ought to weaken. However, with the buck usually a safe harbour, it shouldn’t soften too much more.

The pound was up, with GBPUSD pressing on the post-election euphoria high of last December a little above 1.34. There are Brexit risks ahead – talks recommence next week – but for the moment the major driver of this is the dollar’s weakness. Gold futures rose to $2,000/oz as the weaker dollar lifted commodity markets and US real rates – 10-year TIPS – have sunk again as inflation expectations rise.

Apple and Tesla announce stock splits – here’s what you need to know

Apple and Tesla have both announced that they will split their stocks at the end of this month. Apple shareholders will be granted three additional shares for each one they hold, while Tesla shareholders will receive another four shares for each one they hold. 

The price of each share will be divided by the size of the split to reflect the increased supply: AAPL will start trading at 0.25 times the pre-split price, while Tesla stock will trade at 0.2 times the pre-split price. 

But why are Apple and Tesla splitting their stocks, and how will this affect your trades? 

Why are Apple and Tesla splitting their stocks? 

Apple was the first to announce its stock split earlier this month, followed a few days later by Tesla. Both shares have rallied hard since the announcements although a split shouldn’t theoretically affect their value. 

Stock splits usually happen for two reasons: to increase liquidity and to make the stock more attractive to retail investors. 

Liquidity 

An asset’s liquidity refers to how easily it can be bought and sold without impacting its pricePutting more shares into circulation often increases its trading volume, which can narrow the spread between bid and ask prices. This could make it easier for buyers and sellers to get a fair price for the shares they want or have. 

Appeal 

Apple stock currently trades for around $430 per share, while Tesla has surged towards $2,000 recently. The high valuation could be putting investors off. Shares are often bought and sold in standardised blocks – a “board lot” of 100 shares would cost an investor $43,000. If the stock were split today, 100 shares would cost $10,750. 

However, modern ways of trading shares (such as leveraged products like Contracts for Difference) have made it more affordable to trade even expensive stocks, so the benefit isn’t as obvious as it used to be 

Regardless of the why the decision was made, investors have taken it as a sign of confidence in the stock – Apple and Tesla wouldn’t want to lower their share price if the companies felt that there wasn’t the potential for further appreciation. 

How will the stock splits affect my trades? 

On August 31st Apple stock will start trading at a quarter of the pre-split price, and Tesla will begin trading at a fifth of the pre-split price. 

Any existing positions on AAPL CFDs will be closed at the original opening price and new positions opened at the new split-adjusted price but for four times more units. The same will happen with positions on TSLA CFDs, but with five times more units. 

See below for an example – note that the prices given are based upon the market value as of August 20th and are for indicative purposes only. 

  • Before the split you have 100 units of Apple CFDs, each valued at $462 for a total value of $46,200. 
  • When the stock is split your position for 100 units will be closed at the original opening price (so P&L will display as zero) and a new position will be opened that is four times larger. In this instance your holdings would now be for 400 units of Apple CFDs.
  • The price of each unit will be worth a quarter of the pre-split price, meaning in this example each unit is valued at $115.50 for a total for $46,200 – exactly as before. 

If you didn’t already have a position in Apple and wanted to trade it, or want to expand an existing position, you would be able to buy the same quantity of units for a lower price, or more units for the same cost as before. 

In effect, the size of your AAPL and TSLA positions will be multiplied by the same quantity as the stock prices are divided by, meaning the value of your holdings will not change. 

How the Apple split will impact the Dow 

Anyone trading the Dow will also need to pay attention to the Apple stock split. 

The Dow Jones Industrial Average is a price-weighted index, so when Apple’s stock price drops thanks to the split the company will no longer be the index’s biggest constituent (that will be UnitedHealth). 

Moves in Apple stock will therefore have less of an influence on the Dow than they currently do. 

Will other companies copy Apple and Tesla? 

Investors are now looking to other tech giants to see whether they decide to follow suit. Amazon and Alphabet will be of particular interest – Amazon’s stock price is over $3,100, while Alphabet is trading near $1,500 at the time of writing. 

A lower stock price for Apple would make the stock more attractive, and Amazon and Alphabet may want to ensure they aren’t pricing potential investors out of the market. However, as the huge cost of an individual share in either of them proves, neither Amazon nor Alphabet has felt the need to resist high prices in the past. 

Stocks firm, gold chased higher, Tesla earnings beat

European stocks were firmer after US stocks rallied yesterday to finish at the best level in months, whilst Asia was mixed. The S&P 500 closed at 3,276, its best finish since February as decent corporate earnings supported the bulls who continue to shrug off the rising Covid cases as well as mounting US-China tensions. The broad index also managed to close at the high of the previous session, having previously closed 20 pts short of this level. 

 

There are some concerns with US-China tensions after the closure of the consulate in Houston, with China retaliating by closing the US consulate in Chengdu. But this kind of tit-for-tat is nothing new – we have been dealing with a trade war for years and I think the market is fully expecting friction to increase, particularly as the US presidential election looms and domestic strife makes it all too convenient for the White House to bash China. UK-China tensions are something a little fresher and have led to Chinese authorities taking the English Premier League off air.  

 

Tesla posted its first full year of GAAP profitability, meaning it can now be considered for inclusion in the S&P 500. Excluding special items, EPS came in at $2.18 on revenues of $6bn. Whilst the beat on deliveries reported earlier by the company indicated a strong quarter, this was better than most had forecast. Whilst the stock is still exceedingly rich based on the fundamentals, it’s one with such a backing that it just doesn’t seem to matter. In some ways it’s a talisman for the whole stock market – old fashioned ideas like valuation and discounted free cash flow models simply don’t matter when you have such an incredible amount of liquidity. It’s also a bet on the future of the automotive industry – which carmaker is going to be around in 50 years? 

 

Microsoft shares fell after hours following its quarterly earnings revealed a slowing in cloud growth, with revenues from the Azure business down from 59% to 47%, although overall the company beat on both the top and bottom lines. XBox revenues soared as gamers found ways to pass the time in lockdown. Likewise Americans stocking up on ice cream and other goodies lifted Unilever sales but emerging markets -without the help of an Ocado to bring consumers lockdown treats – were tougher.

 

On the data front, Germany’s Gfk consumer confidence survey was better than expected, printing –0.3 vs the –4.6 expected. South Korea’s economy is in recession after the worst slump 57 years.  

 

Today the focus is on the US weekly unemployment numbers, with initial jobless claims forecast to hold steady at 1.3m. Initial jobless claims last week of 1.3m were almost unchanged from the prior week. As noted after the release of the numbers last Thursday, the improving trend in initial jobless claims has all but halted, which may reflect the spike in coronavirus cases that has coincided with renewed lockdown measures in a number of economically important states such as Texas and California. There are also big worries that temporary layoffs are turning into permanent firings. 

 

Continuing claims fell to 17.3m vs the 18m in the prior week, which was a tad better than the 17.6m expected. The total number of people claiming benefits in all programmes for the week ending June 27th fell to 32m a decrease of 430k from the previous week.  

On the Covid front, US deaths exceeded 1,000 for the second day, whilst California – the most populous and economically important state – saw more than 12k cases on Wednesday, its largest single-day rise. 

 

In FX, the dollar remains on the backfoot with major peers cementing gains. EURUSD has cleared the January 2019 peak at 1.1570 and looking for a further extension towards the next big Fibonacci level at 1.1760 and the September 2018 swing highs at 1.18. The outlook for the euro is more bullish – on a technical note the clearance of 1.15 is a big hurdle out of the way, whilst the agreement on the EU pandemic fund is fundamentally vital to pushing the euro higher. Longer term is could have very far-reaching repercussions for bond investors, too. GBPUSD was trading above 1.27 and the 200-day moving average and testing the descending trend line that forced the pullback on Tuesday – clearance of these two hurdles opens up a path to 1.30 albeit the fundamental bullish thesis on sterling is far cloudier. 

 

Oil nudged up despite the rise in US crude inventories. WTI (Aug) pressed up above $42 after the EIA reported a crude oil inventory build of 4.9m barrels in the week to July 17th, vs the 2m barrel draw expected, albeit the API print had already flagged a likely increase in stockpiles. Stocks at the Cushing, Oklahoma, hub rose 1.375m vs last week’s build of almost 1m. 

 

Gold continues to march higher as real rates hit all-time lows with 10yr TIPS finishing at –0.88%. Gold pressed up to $1,876 this morning to mark a new 9-year peak. The momentum that is chasing this trade should easily enable bulls to find the $1921 all-time high last achieved in 2011 – you get the feeling there is a lot of appetite to take out this level, but expect some considerable resistance and another pullback to $1800 may be required first. After clearing the all-time high there is a chance of a move to $2k, but we should question whether the support from declining real rates will continue to act as a driver of gold prices without a significant inflationary follow-through. Nevertheless, it’s clear that the combination of a very uncertain macro backdrop, fresh geopolitical risk, the threat of inflation stemming from the massive injection of both monetary and fiscal stimulus make gold a clear-cut Covid winner. 

الأسبوع المقبل: آمال اللقاح وأرباح Tesla في محور الاهتمام

 

يحدث هذا الأسبوع – هل يمكن أن تفعل Tesla ما يكفي لأن تبرر تقييمها الهائل بإعلان أرباحها للربع الثاني؟

أرباح Tesla للربع الثاني

حظيت Tesla (TSLA) بارتفاع مذهل في قيمة أسهمها في عام 2020، مرتفعة بنسبة 270% منذ بداية العام حتى تاريخه. ارتفع السهم بأكثر من 500% في الإثني عشر شهرًا الأخيرة فيما لا يمكن أن يوصف إلا بواحد من أروع التحولات في تاريخ الشركات. خلال تلك الفترة كسب S&P 500 حوالي 7%. التقييمات خارج النافذة والسهم يتداول على مضاعفات التكنولوجيا – قد يقول البعض لسبب وجيه، غير حيازة السهم على المكشوف – نسبة الأسهم المُعارة للمتداولين الذين يراهنون على أن السهم سيهبط – تبقى عالية نسبيًا عند 7.5%.

اسهم Tesla ارتفع في العام الماضي 

لكن الأمر يعود للأساسيات هذا الأسبوع مع إصدار Tesla لنتائجها المالية للربع الثاني من 2020. ستصدر الشركة على الأرجح تقرير بأرباح للربع الرابع على التوالي يوم 22 يوليو، وهو ما سيمهد الطريق أمامها لتدخل S&P 500، وقد يفسر الارتفاع الأخير في قيمة الأسهم مع قرار الصناديق أنها ستحتاج لامتلاك بعضًا منها.

اندفع السهم إلى أعلى ارتفاع له على الإطلاق قريبًا من 1،800 دولار بعد أن قالت الشركة أنها سلمت 90،650 مركبة في الربع الثاني، متقدمة كثيرًا عن كل من توقعات الشارع، وما خططت له الشركة بعدد 83،000 مركبة. لقد رفعت الشركة بنجاح من إنتاجها في موقعها في فريمونت وعاد أيضًا مصنع شنغهاي للعمل بعد أن أُجبر على الإغلاق في الربع الأول بسبب كوفيد. مبيعات الصين عادت من حيث توقفت مع بيع Tesla حوالي 12،000 من طراز 3S في مايو. ارتفع السهم أيضًا بعد أن رفعت Wedbush Securities هدفها السعري على السهم إلى 1،250 دولار من 1،000 دولار، بينما حصل السيناريو الارتفاعي على هدف سعري بقيمة 2،000 دولار.

ويبقى المحللون منقسمون حول Tesla… 

…لكن صناديق التحوط كان تزيد من أرصدتها

أرباح أخرى تجب مشاهدتها هذا الأسبوع تأتي من Microsoft وCoca-Cola وUnilever.

نتائج لقاح AstraZeneca وجامعة Oxford

تواصل الآمال بإنتاج لقاح دعم مزاج سوق الأسهم، بالرغم من علامات التعافي الأبطأ من انتعاش على شكل حرف V الذي أمل فيه الجميع. تعلقت الكثير من الآمال على لقاح مرشح تُطوره AstraZeneca وجامعة Oxford – ومن المقرر أن تظهر نتائج المرحلة الأولى من التجارب السريرية يوم الإثنين، وقد تحدد الاتجاه العام في سوق الأسهم لباقي الأسبوع.

ترقب أيضًا تفاعل في أسهم AstraZeneca، والتي ارتفعت قيمتها كثيرًا هذا العام حتى صارت أكبر سهم في FTSEF 100.

بيانات اقتصادية للمشاهدة

كما هو الحال دائمًا يوم الخميس نتوقع صدور تحديث هام من الولايات المتحدة يساعد على إظهار سرعة إعادة الفتح والتعافي الاقتصادي في صورة مطالبات البطالة الأسبوعية المبدئية والمستمرة.

لدينا يوم الجمعة مبيعات تجزئة المملكة المتحدة لشهر يونيو، ومن المتوقع أن تُظهر تحسنًا بعد انتعاش صحي بلغ 12% في مايو جاء بعد الهبوط الذي بلغ -18% في أبريل في ظل الغلق الكامل.

يشهد الجمعة أيضًا إصدار أحدث تقارير مؤشرات مديري المشتريات الموجزة لمنطقة اليورو، والتي أظهرت انتعاشًا جيدًا في الشهر الماضي. تواجه مؤشرات مديري المشتريات، وهي مؤشرات انتشار، بوجه خاص تحديات من سرعة وحجم التقلص الاقتصادي. لذا، بينما قد تحقق التقارير شكل حرف V، لا يعني هذا أن التعافي يأخذ شكل حرف V. لا تسأل مؤشرات مديري المشتريات إلا حول ما إذا كان المشاركون في الاستقصاء يظنون الأمور أفضل أم أسوأ من الشهر الماضي، لذا يعطون صورة غير مثالية على الإطلاق للنشاط الاقتصادي في أوقات الأزمات. أي قراءة تتجاوز 50 تخبرنا أن الأمور أفضل من الشهر الماضي، وهو ما لا يمثل في الوقت الحالي سقفًا عاليًا للتوقعات يصعب تجاوزه.

تسليط الضوء على XRay هذا الأسبوع

اقرأ كامل الجدول الزمني لتحليل السوق المالي والتدريب عليه.

07.15 UTC Daily European Morning Call
17.00 UTC 20-Jul Blonde Markets
From 15.30 UTC 21-Jul Weekly Gold, Silver, and Oil Forecasts
14.45 UTC 23-Jul Master the Markets with Andrew Barnett
17.00 UTC 23-Jul Introduction to Currency Trading – Is it For Me?

Top Earnings Reports this Week

Here are some of the biggest earnings reports scheduled for this week:

After-Market 20-Jul IBM – Q2
07.00 GMT 21-Jul UBS – Q2
Pre-Market 21-Jul Coca-Cola Co – Q2
Pre-Market 21-Jul Philip Morris – Q2
Pre-Market 22-Jul Biogen – Q2
After-Market 22-Jul Tesla – Q2
After-Market 22-Jul Microsoft – Q2
After-Market 22-Jul Gilead Sciences – Q2
07.00 GMT 23-Jul Unilever – Q2
Pre-Market 23-Jul AT&T – Q2
Pre-Market 23-Jul Twitter – Q2
After-Market 23-Jul Intel – Q2
23-Jul Southwest Airlines – Q2
Pre-Market 24-Jul Verizon – Q2
Pre-Market 24-Jul American Express – Q2

Key Events this Week

Watch out for the biggest events on the economic calendar this week:

01.30 GMT 21-Jul RBA Monetary Policy Meeting Minutes
02.30 GMT 21-Jul RBA Governor Lowe Speech
12.30 GMT 21-Jul Canada Retail Sales
00.30 GMT 22-Jul Japan Flash Manufacturing PMI
01.30 GMT 22-Jul Australia Retail Sales
12.30 GMT 22-Jul Canada CPI
14.30 GMT 22-Jul US EIA Crude Oil Inventories
06.00 GMT 23-Jul German GfK Consumer Climate
12.30 GMT 23-Jul US Weekly Jobless Claims
14.30 GMT 23-Jul US EIA Natural Gas Storage
06.00 GMT 24-Jul UK Retail Sales
07.15-08.00 GMT 24-Jul Flash Eurozone Services, Manufacturing PMIs
08.30 GMT 24-Jul Flash UK Services, Manufacturing PMIs
13.45 GMT 24-Jul US Flash Manufacturing PMI

US Election2020 fast update: Biden ramps clean energy plans

  • Biden plans $2tn clean energy investment
  • Clean energy stocks may prosper under Democrat clean sweep
  • Potential risks?

Clean energy stocks were among yesterday’s best gainers as Joe Biden, presumptive US Democrat president, outlined a $2tn green energy and infrastructure spending plan. Traditional oil companies also rebounded, with Chevron and Exxon up over 3% and Schlumberger, EOG Resources and Halliburton both adding over 5% as Biden appeared to steer clear of any fracking bans.

Biden plans “irreversible path” to net-zero emissions

First the numbers – it’s more money, faster with a more ambitious target than in the primaries after – it has all the hallmarks of Bernie Sanders on it. The $2tn over 4 years exceeds the $1.7tn over ten imagined in Biden’s primary campaign.

Biden outlined plans to set the US on an “irreversible path” to net-zero carbon emissions by 2050, with an ambitious goal to build a carbon pollution-free power sector by 2035. There is a clear break being made with the oil & gas sector implicit in this, but crucially we did not hear an aggressive take on fracking or proposals to restrict US shale.

The focus was on job creation in new industries, not on going after the oil & gas sector per se, albeit the proposals clearly imply a far more aggressive shift away from fossil fuels than a Trump administration would pursue. As much as it cemented the Democrats as the green party, this is an election pitch to voters in some key swing states who may have lost their jobs.

Meanwhile, the Democrat proposals would also involve upgrading millions of commercial and residential properties over 4 years to increase energy efficiency, with among other things the installation of solar panels, which is a potentially huge growth area (Sunrun, Solaredge, FirstSolar).

We also note a positive policy position on EV (Tesla, Nikola) with plans to invest in 500,000 electric vehicle charging stations. Biden’s goal is to combine going green with economic recovery: to Build Back Better. He is promising to create 1 million new jobs in the auto industry, domestic auto supply chains, and auto infrastructure, from parts to materials to electric vehicle charging stations, which will depend on the repurposing of the auto industry from ICE to EV.

How will oil and gas sector workers react in key states?

Whilst Biden is playing a strong hand here in tying jobs and economic recovery to the green economy, killing two albatrosses with one very large boulder, there are of course risks to this strategy, notably among the millions of workers in the oil & gas sector in states like Pennsylvania and Texas.

Biden boasts of creating more than 250k jobs “immediately to clean up local economies from the impacts of resource extraction”, but they may see Trump as a better guarantor of their jobs when it comes to the crunch.

Broadly the announcement appeared to be positive for the S&P 500 Energy sector, which rose 3.43%. Our Biden20 Blend clean energy constituents, selected as potential gainers from a Democrat clean sweep, notched broad gains, with some solar energy names taking off after Biden’s announcement.

 

Company Ticker % daily move
Nikola Corporation NKLA -1.5%
Nextera Energy NEE +2.46%
Brookfield Asset Management Inc BAM +2.93%
Tesla TSLA +1.32%
First Solar FSLR +9.91%
Terraform Power TERP +4.59%
Brookfield Renewable Partners BEP +3.92%
Sunrun RUN +12.26%
SolarEdge SEDG +8.74%
Enphase Energy ENPH +6.8%
Ormat Technologies ORA +0.48%
Atlantica Sustainable Infrastructure AY -1.95%
Plugpower PLUG +4.09%
Nextera Energy Partners NEP +2.95%

Short sellers triumph as Wirecard collapses – but who’s next?

Those shorting Wirecard will have been rubbing their hands with glee after the events of the past few days.

The company, once one of Germany’s tech darlings, last week filed for insolvency after admitting that almost €2 billion in cash missing from its balance sheet likely didn’t exist.

In the space of 11 days the stock price collapsed from just over €100 to as low as €1.15. In the week ending June 26th, Wirecard short sellers made $1.2 billion, with hedge funds accounting for the bulk of that.

Wirecard has been a heavily-shorted stock for a long time, thanks in part to negative coverage by the Financial Times, which has long warned that the company’s finances don’t add up. The stock was so heavily shorted that in February the German financial regulator took the unprecedented step of banning new short positions on Wirecard for an entire month.

Wirecard stock is a fraction of its former value after the 95% drop witnessed over the past 12 days. While hedge funds are still piling in to short the stock, many shorts have already locked in their profits. So what might be the next big target for short sellers?

GSX: Inflated revenues and fake users?

GSX Techedu is a tech company and online education provider focusing on after-school tutoring for primary and secondary school children, as well as courses in foreign language, and professional development amongst others.

The company has been the focus of short sellers for some time now. As of mid-May over a fifth of its publicly traded stock was sold short – 27.3 million shares, worth $815 million at the time. This makes GSX the fourth largest Hong Kong or Chinese equity traded short on US exchanges after Alibaba, Pinduoduo and JD.com.

The company faces claims from Citron Research and Muddy Waters that it has inflated its revenue figures. Citron, which has called GSX “the most blatant Chinese stock fraud since 2011”, has questioned the 431% year-on-year revenue surge reported by GSX in 2019. Additionally, Muddy Waters believes that around three quarters of the company’s reported students are actually bots rather than paid users.

GSX listed on the New York Stock Exchange on June 6th 2019 with an initial offer price of $10.50. The stock is now trading at around $58, and has surged 146% this year.

You can trade this hotly-watched stock on the Marketsx platform.

Tesla shorts down but not out

Tesla founder Elon Musk has been battling against short sellers for a long time. The huge rally seen in the stock price in recent months, while dealing a painful financial blow to short sellers, seems to have only hardened their resolve. Back at the end of January, a stronger than expected earnings report from Tesla saw shorts lose $1.5 billion in a single day. Then, at the beginning of March as the pandemic panic set in, Tesla’s tumble netted shorts $2.8 billion.

Tesla is the most shorted US stock, with the value of its float out on loan rising around $3 billion in the last two months to over $16 billion. That’s around 11% of its publicly available stock. The stock recently rose to trade above $1,000 per share for the first time, helped by resilient demand for its vehicles in China and progress towards a one million mile battery, which could revolutionise the electric vehicle market.

However, shorts believe there is still a large disconnect between where the stock is now and the fundamentals of the company – it went public ten years ago and, while the stock is up over 4,000% since then, Telsa has never delivered a full year of profitability. Shorts are betting that a lot of the recent gains seen in Tesla stock is because of momentum traders, and that the bubble will eventually burst.

Will Hammerson follow Intu into administration?

In the UK, shopping centre owner Hammerson attracted a lot of attention from short sellers during the height of the pandemic panic in March. It’s the most shorted UK stock, with 13% of its publicly traded shares out on loan. A total of nine hedge funds are betting against the stock, as the impact of the lockdown to battle Covid 19 and the prospect of a sluggish reopening hampered by social distancing measures, threatens the outlook for the company.

Rival Intu, owner of some of the UK’s largest shopping centres, entered administration this month. The company was already heavily laden with debt, and the coronavirus pandemic proved to be the final straw.

The fate of Intu shows just why short sellers are interested in Hammerson: as of the end of last week the collapse in its stock price left Intu valued at just £16 million, down from £13 billion in 2006.

While Hammerson raced higher from its mid-May low as its tenants prepared to reopen their stores, the stock has since lost nearly half its value again.

CySEC (أوروبا)

  • يتم حفظ أموال العملاء في حسابات مصرفية منفصلة
  • تعويضات صندوق تعويضات المستثمر FSCS تصل إلى 20000 جنيه إسترليني
  • حماية الرصيد السلبي

المنتجات

  • CFD
  • تعاملات الأسهم
  • Quantranks

Markets.com، التي تتولى تشغيلها شركة Safecap للاستثمارات المحدودة ("Safecap”) مرخصة من قبل مفوضية قبرص للسندات والتداول (CySec) بموجب الترخيص رقم 092/08 ومن قبل هيئة سلوكيات القطاع المالي ("FSCA") بموجب الترخيص رقم 43906.

FSC (العالمية)

  • يتم حفظ أموال العملاء في حسابات مصرفية منفصلة
  • التحقق الإلكتروني
  • حماية الرصيد السلبي

المنتجات

  • CFD

Markets.com، التي تتولى تشغيلها Tradetech Markets (جزر العذراء البريطانية) ذ.م.م. المحدودة ("TTMBVI”) مرخصة من قبل لجنة الخدمات المالية في جزر العذراء البريطانية ("FSC") بموجب الترخيص رقم SIBA/L/14/1067.

FCA (المملكة المتحدة)

  • يتم حفظ أموال العملاء في حسابات مصرفية منفصلة
  • تعويضات صندوق تعويضات الخدمات المالية تصل إلى 85000 جنيه إسترليني *بحسب المعايير والأهلية
  • حماية الرصيد السلبي

المنتجات

  • CFD
  • المراهنة على الهامش

Markets.com، التي تتولى تشغيلها TradeTech Alpha المحدودة ("TTA”) مرخصة من قبل هيئة السلوك المالي ("TTA") بموجب الترخيص رقم 607305.

ASIC (أستراليا)

  • يتم حفظ أموال العملاء في حسابات مصرفية منفصلة
  • التحقق الإلكتروني
  • حماية الرصيد السلبي

المنتجات

  • CFD

Markets.com، التي تتولى تشغيلها Tradetech Markets (أستراليا) ذ.م.م. المحدودة ("TTMAU”) تحمل ترخيص هيئة الخدمات المالية الأسترالية رقم 424008، وهي مرخصة لتقديم الخدمات المالية من قبل هيئة الأوراق المالية والاستثمار الأسترالية ("ASIC”).

FSCA (إفريقيا)

  • يتم حفظ أموال العملاء في حسابات مصرفية منفصلة
  • حماية الرصيد السلبي

المنتجات

  • CFD

Markets.com، التي تتولى تشغيلها TradeTech Markets (جنوب إفريقيا) (ذ.م.م.) المحدودة ("TTMSA”) مرخصة من قبل هيئة سلوكيات القطاع المالي ("FSCA") بموجب الترخيص رقم 46860.

سيؤدي تحديد إحدى هذه الجهات التنظيمية إلى عرض المعلومات المتوافقة على نطاق الموقع الإلكتروني بأكمله. لمزيد من المعلومات انقر هنا

Marketsi
An individual approach to investing.

Whether you’re investing for the long-term, medium-term or even short-term, Marketsi puts you in control. You can take a traditional approach or be creative with our innovative Investment Strategy Builder tool, our industry-leading platform and personalised, VIP service will help you make the most of the global markets without the need for intermediaries.

Share Dealing in the Markets Group is only offered by Safecap Investments Limited regulated by CySEC under license number 092/08. We are now re-directing you to Safecap’s website.

Redirect