Battery Recycling Firm Redwood Raises $700 Million from Big Fund Managers

By Paul Lienert

The four-year-old Nevada firm aims to recover and refine critical materials such as nickel, cobalt and lithium to slash the cost and carbon footprint of battery production while reducing mining of those raw materials, Redwood Chief Executive J.B. Straubel said.

“An important part of our mission is to get these materials back as quickly and efficiently as possible into the battery supply chain — that’s easier said than done,” said Straubel, a co-founder of Tesla.

T. Rowe Price, Baillie Gifford and Fidelity all were investors in Tesla, according to investor website PitchBook.

Since 2017, Straubel and his team have raised nearly $800 million, giving the company a valuation of around $3.7 billion, according to a source familiar with Redwood.

The latest funding round included Goldman Sachs, Franklin Templeton, Emerson Collective and Valor Equity Partners, as well as prior investors Amazon, Capricorn and Breakthrough Energy Ventures, whose backers include Microsoft co-founder Bill Gates and Amazon founder Jeff Bezos.

Redwood has partnerships with battery makers Panasonic in Nevada and Envision AESC in Tennessee, as well as Amazon.

The new investment “lets us expand the business dramatically and step our way further up the value chain,” Straubel said.

The company is tripling the size of its Carson City, Nevada, facilities and hiring more than 500 people.

“I am very confident that recycling can be a huge lever to improve the emissions footprint of battery manufacturing,” Straubel said: “We’re hell-bent on making the recycling process absolutely sustainable.”

(Reporting by Paul Lienert in Detroit; Editing by Dan Grebler)

Analysis-Tesla Hikes Electric Car Prices in U.S.; Holds Line in China

By Eva Mathews, Nivedita Balu and Hyunjoo Jin

Tesla raised prices for the most affordable versions of Model 3 and Model Y about a dozen times this year in the United States, according data tracked by Reuters. At the same time, Tesla recently introduced an affordable Model Y version in China, where it refrained from price cuts.

Tesla posted record vehicle deliveries in the second quarter, and the price increases in North America boosted quarterly profits to a record.

But in China, the world’s biggest electric vehicle (EV) market, Tesla faces fierce competition from local rivals and problems that include product recalls, high-profile protests by consumers and pressure from regulators.

Bernstein analyst Toni Sacconaghi said introduction of the lower-priced Model Y in China “may make sustained margin improvement difficult” for Tesla and raises questions about “the health of Chinese demand.”

A study by Bernstein analysts found Tesla owners in China were less enthusiastic and had lower repurchase intentions than owners in the United States and Europe.

Tesla raised prices for Model Y Long Range at least six times in the United States this year, bumping by $5,500 to $53,990. In China, the world’s most valuable carmaker raised prices of the Model Y SUV and Model 3 sedan only once this year.

The Model Y version a price tag of 276,000 yuan ($42,393.71). The company also has launched promotional campaigns in China such as loan offers.

“I think Tesla is looking to be as competitive as it can be in China. Lower prices will be a part of that aggressive market positioning,” Roth Capital Partners analyst Craig Irwin said. “There is a very large difference in battery prices in the U.S. and China, as well as local vehicle manufacturing costs.”

Tesla started production at its Shanghai factory in late 2019. It has boosted sourcing of cheaper local components, including batteries from China’s CATL and LG’s Chinese factory.

“It wasn’t so long ago that the group was trimming prices in the U.S. to gain scale and maximize profitability, and it feels like we’re now seeing that in China too,” Hargreaves Lansdown analyst Nicholas Hyett said.

The low cost of producing local EVs in China would have a lasting effect for Tesla, said Gene Munster at Loup Ventures.

“Teslas are on average 3x the cost of a typical EV made in China. So they have to be priced less than the US to compete,” Munster said. “Prices of Teslas in China will be below rest of the world for the next decade.”

Tesla also cut costs and boosted margins in the U.S. market by getting rid of some parts like a radar sensor and lumbar support.

CHINA MARKET SHARE SLIPS

In China, Tesla’s share slipped to 11% in the battery electric vehicle market, which excludes plug-in hybrid cars, in the second quarter from 18% a year earlier, according to GLJ research. But data from Morgan Stanley showed Tesla still held a U.S. battery electric market share of nearly 70% as of February, although that was down from 81% a year earlier.

China accounts for 44% of the global EV market, a much bigger share than the 17% held by the United States.

In China, Tesla faces competition from electric vehicle makers like Nio Inc and Xpeng Inc. In the United States, Tesla’s brand is stronger and its main rivals are legacy automakers like Ford and General Motors, which generate only a fraction of their sales from EVs.

GLOBAL CHIP SHORTAGE

Tesla CEO Elon Musk has reiterated that the company’s mission is to make electric cars affordable, and has blamed vehicle price increases on a shortage of chips and raw materials.

Tesla is coping with the chip shortage by using alternative chips and rewriting software, Musk said.

He provided a cautious outlook for chip shortage. “It does seem like it’s getting better,” he said on the second-quarter earnings call, but added: “it’s hard to predict.”

($1 = 6.5104 Chinese yuan renminbi)

(Graphics: Prices of Tesla models in China: https://graphics.reuters.com/TESLA-PRICES/lgpdwmoaavo/chart.png)

(Graphics: Prices of Tesla models in the U.S.: https://graphics.reuters.com/TESLA-PRICES/xmvjognedpr/chart.png)

(Reporting by Eva Mathews, Subrat Patnaik and Nivedita Balu in Bengaluru and Hyunjoo Jin in Berkeley, California; Editing by Peter Henderson, David Gregorio and Gerry Doyle)

Why Tesla Stock Is Losing Ground After Strong Earnings Report

Tesla Stock Declines Amid Sell-Off In The Electric Vehicle Space

Shares of Tesla are moving lower after the company reported its second-quarter results.

The company reported revenue of $11.96 billion and GAAP earnings of $1.02 per share, beating analyst estimates on both earnings and revenue. Importantly for crypto market enthusiasts, Tesla did not sell any Bitcoin.

Tesla reported that its automotive gross margin was 28.4%, which was above analyst consensus. The company noted that it experienced some problems due to global shortages of certain components, but it maintained it multi-year target for 50% average annual growth of deliveries.

The report was strong, but Tesla stock found itself under pressure together with other electric vehicle stocks due to concerns about increased regulatory pressure in China.

China has recently showed that it was ready to implement draconian restrictions for successful companies in the education space if it believed that their business was not fully in line with the country’s goals, and investors fear that regulatory crackdown will continue in other industries.

What’s Next For Tesla Stock?

Tesla had some bad luck this time as its strong quarterly report was released at a time when the market was worried about regulatory crackdown in China. Tesla shares will remain sensitive to news from China as it is a very important market and the company has a factory in Shanghai.

Analyst estimates for Tesla’s earnings have pulled back a bit in recent weeks. Currently, analysts expect that Tesla will report a profit of $4.48 per share in 2021 and $6.18 per share in 2022, so the stock is trading at roughly 104 forward P/E. Analyst estimates will likely move higher after the strong report, but Tesla will remain a very expensive company on a P/E basis.

Back in June, Tesla stock made an attempt to gain upside momentum but faced resistance near the $700 level and pulled back. Tesla is richly valued by the market, and it looks that it will need strong catalysts to move above the resistance near $700.

For a look at all of today’s economic events, check out our economic calendar.

Bitcoin Rejected at $40,000 Amid a Dwindling Bull Run

  • Bitcoin has seen meteoric growth in the past 24 hours as fueled by news from Amazon.
  • Despite the uptrend which stirred a growth of up to 15% in the latest run, the market bears rejected a push-up beyond the $40,000 resistance point.
  • Ethereum is also seeing a rejuvenation as it looks to breach the $2,500 price level.

Unique fundamentals unraveled in the past days have stirred a rejuvenation in the cryptocurrency industry. For a market that has been begging for a bullish awakening in months, the 8.65% in the global crypto market cap to $1.53 Trillion is perhaps enough to suggest a major rally may be brewing. This, however, is dependent on how Bitcoin and Ethereum can sustain their current growth trends.

Bitcoin Sees Impressive Price Growth and a Simultaneous Rejection

The premier cryptocurrency is currently changing hands at $38,282.8, up 9.84% according to data from CEX.IO the price feed. The news that Amazon is looking to hire a crypto expert to help chart its pursuit of accepting Bitcoin payments can be tipped as a major cause for this recent growth.

With the institutional backing which has seen the likes of Tesla, MicroStrategy, and recently SpaceX places a Bitcoin holding on their balance sheets set to be complemented with the Amazon push, market bulls went on an unbridled accumulation, pushing the price to a weekly and monthly high of $39,280.42.

The uptrend as seen on the BTC/USD 4h chart is attaining the peak at the current price level, suggesting a bear action that is repressing the price growth from crossing the $40,000. The RSI and MACD indicators are still showing positive signs of growth, and while we may see a little retracement, crossing the $40,000 resistance point remains the short-term target for investors.

Ethereum Maintaining a Steady Growth

At a current price of $2352.31 and a growth rate of 8.01% in the past 24 hours, Ethereum’s uptrend correlation with BTC was reiterated. However, unlike Bitcoin which has started seeing a gradual bear action, Ethereum bulls are pushing the coin to a new price point, such as has never be seen in the past month.

With prices trading above the short-term Moving Average, a sustained buyup can push Ethereum to the $2,500 to $3,000 price level in the coming weeks.

Today’s Market Wrap Up and a Glimpse Into Tuesday

Stocks started off the week strong, with all three of the major indices finishing at all-time highs. The gains are an extension of last week’s rally and demonstrate a vote of confidence among investors in corporate America’s earnings results. While the Dow Jones Industrial Average, S&P 500 and Nasdaq were up just fractionally, it was enough to send them all into record territory.

In the cryptocurrency markets, the bitcoin price crossed the USD 40,000 level for the first time in over a month, but the gains slowly faded away. Reports previously suggested that Amazon.com was on the brink of accepting bitcoin payments this year. The e-commerce giant, however, reportedly quashed those rumors despite maintaining that it is looking into crypto.

Stocks to Watch

Tesla’s highly anticipated Q2 earnings are out, and Elon Musk didn’t disappoint. The EV maker surpassed Wall Street estimates on earnings and revenue as Tesla continues to hit on all cylinders. Net income crossed over into the billion-dollar territory, which was a first for the company, while revenue came in at USD 11.9 billion vs. estimates of USD 11.3 billion.

Tesla, which delivered more than 200K vehicles in Q2, said it’s on track to produce its Model Y vehicles in Berlin and Austin, Texas this year. The Cybertruck will also be produced in Austin, Texas “subsequent to Model Y.”

Tesla’s stock is inching higher in extended-hours trading after gaining 2% in the regular session. Tesla also noted it “recorded a bitcoin-related impairment of USD 23 million.” The bitcoin price nosedived 40% in the second quarter of 2021.

F5 Networks is rallying in after-hours trading, with shares up more than 5%. Investors rewarded the technology company for its fiscal Q3 results, which came in better than Wall Street expected.

Cryptocurrency exchange Coinbase saw shares fall close to 2% in extended hours, perhaps in sympathy with bitcoin after the air was let out of the Amazon-fueled rally.

Look Ahead

Major technology companies are queued to report earnings on Tuesday, including Apple, Google parent Alphabet and Microsoft. Snap and Twitter’s quarterly results last week revealed a strong online advertising market that is likely to have benefited Alphabet as well.

On the economic front, Durable Good Orders for the month of June come out at 10 a.m. ET on Tuesday. Wells Fargo economists predict that this indicator increased 2.3% last month fueled in part by orders for Boeing aircraft.

Stock Index Futures Show Poise Ahead of Monday’s Open

The Dow Jones Industrial Average reached a milestone last week that will be tough to top this week. The index added more than 230 points on Friday to finish above 35K for its first time in history. Friday’s performance brings the Dow’s year-to-date gains to 14% and clinches four consecutive days of finishing in the green. It has been a little over three months since the Dow crossed the 34K threshold for the first time as the bulls continue to flex their muscles.

The S&P 500 and tech-heavy Nasdaq were both up more than 1% on Friday.

Stock index futures are basically flat with a slight leaning to the downside on Sunday evening as investors brace for Monday’s trading. Tech earnings are the name of the game this week. The oil price continues to rebound and is moving fractionally higher to above USD 72 per barrel on expectations that supply constraints will persist for the rest of 2021.

Stocks to Watch

Earnings season is in full swing. All eyes will be on Tesla on Monday when it reports its Q2 results after the closing bell. The company already revealed that it had more than 200K deliveries in the quarter, its best ever for a single quarter. Wall Street is largely expecting the EV maker to top analyst estimates with its earnings, which could fuel the stock higher. Tesla chief Elon Musk hinted at Tesla resuming bitcoin payments soon.

Separately, Snap Inc’s value ballooned by more than 23% on Friday on the heels of better-than-expected results on the top and bottom lines. The social media company’s results were fueled by a robust online ads market in addition to more daily active users.

If Snap’s earnings are any indication, good things could be ahead for tech giants Facebook, Google’s Alphabet and Amazon.com, which are on tap to report quarterly results this week.

Look Ahead

An FOMC meeting will unfold on Tuesday and Wednesday. Policymakers are not expected to roil the markets by shaking up monetary policy despite rising inflation, according to Wells Fargo economists. Meanwhile, investors will get the first glimpse into Q2 GDP on Thursday.

Lockheed Martin reports its quarterly results before the opening bell on Monday. Also this week, more earnings are in the pipeline, including the likes of Dow component Boeing.

Bears In Control Ahead of Tesla Report

Tesla Inc. (TSLA) reports Q2 2021 earnings after Monday’s closing bell, with analysts looking for a profit of $0.98 per-share on $11.4 billion in revenue. If met, earnings-per-share (EPS) will mark a 55% profit decline compared to the same quarter last year. The stock fell more than 4% despite beating Q1 top and bottom line estimates in April and shed another 24% into mid-May.  It’s recovered just half of that loss into July, stuck like glue to the 50-day moving average.

Bearish Long-Term Price Pattern

The stock is taking a multi-month breather after posting an historic 839% return in 2021, closing out last Friday’s session with an 8% year-to-date loss. More importantly, price action has been carving the outline of a bearish descending triangle since November, with the pattern’s characteristic horizontal floor near 540 and lower highs at 781 and 698. Support has now aligned with the 200-day moving average, raising the stakes heading into this week’s confessional.

Fortunately for shareholders, there are good reasons to believe that Tesla will post another strong quarter. An industry publication just reported that “some U.S. deliveries of Model 3 cars were pushed back amid high demand”. Those vehicles are now manufactured at the Freemont facility but the Austin facility is scheduled to come online in coming months, supporting much higher production. Reuters also chimed in with a bullish piece, noting Q2 registrations in California increased 85% in the second quarter.

Wall Street and Technical Outlook

Wall Street consensus has grown cautious after historic share gains, with a ‘Hold’ rating based upon 15 ‘Buy’, 1 ‘Overweight’, 15 ‘Hold’, and 2 ‘Underweight’ recommendations. More importantly, six analysts are recommending that shareholders close positions and move to the sidelines. Price targets currently range from a low of $67 to a Street-high $1,471 while the stock closed Friday’s session about $75 below the median $718 target.

Tesla broke out above 2017 resistance in the 70s in January 2020 and bounced at new support in March. It completed another breakout in June, entering a powerful trend advance that posted an all-time high at 900.40 on Jan. 25. The bearish pattern since that time has dropped accumulation to late 2020 levels while monthly and weekly Stochastics are grinding through sell cycles. This action warns investors to reduce risk if the stock drops to support near 540 after earnings.

For a look at all of today’s economic events, check out our economic calendar.

Disclosure: the author held no positions in aforementioned securities at the time of publication. 

Monstrous Earnings Week Ahead: Tesla, Google, Microsoft, Apple, Facebook and Amazon in Focus

Earnings Calendar For The Week Of July 26

Monday (July 26)

IN THE SPOTLIGHT: TESLA, LOCKHEED MARTIN

TESLA: The California-based electric vehicle and clean energy company is expected to report its second-quarter earnings of $0.94 per share, which represents year-over-year growth of over 113% from $0.44 per share seen in the same quarter a year ago.

The high-performance electric vehicle manufacturer would post revenue growth of about 90% to around $11.4 billion. The electric vehicle producer has beaten earnings three times in the last four quarters.

“A double-fly-wheel. We believe Tesla can leverage its cost leadership in EVs to aggressively expand its user base, over time generating a higher % of revenue from recurring/high-margin services revenue. Services drives the upside. We forecast Tesla’s network services EBITDA as a % of total TSLA EBITDA to reach 11% by 2025, ~18% by 2030 and ~35% by 2040. Tesla Service revenue includes automated driving, infotainment, upgrades, supercharging, maintenance, telematics, etc,” noted Adam Jonas, equity analyst at Morgan Stanley.

“Valuation supportive vs. tech. Including Network Services, Energy & Insurance to our core auto fcst, at $900 Tesla trades at ~29x EV/EBITDA in 2025 and ~6x 2025 sales. Expensive vs. auto but not vs. software/tech comps.”

LOCKHEED MARTIN: The Bethesda, Maryland-based global security and aerospace company is expected to report its second-quarter earnings of $6.53 per share, which represents year-over-year growth of about 13% from $5.79 per share seen in the same quarter a year ago.

The world’s largest defense contractor would post revenue growth of over 4% to around $16.9 billion. It is worth noting that the aerospace company has beaten earnings in all last eight quarters.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE JULY 26

Ticker Company EPS Forecast
PSON Pearson £8.40
LMT Lockheed Martin $6.53
PHG Koninklijke Philips $0.47
CHKP Check Point Software Technologies $1.56
LII Lennox International $4.39
RPM RPM International $1.26
BOH Bank of Hawaii $1.31
DORM Dorman Products $1.04
TSLA Tesla $0.94
KOF Coca Cola Femsa Sab De Cv $14.53
ARE Alexandria Real Estate Equities $0.62
AMP Ameriprise Financial $5.20
SUI Sun Communities $0.57
BRO Brown & Brown $0.40
UHS Universal Health Services $2.69
PKG Packaging Of America $1.77
FFIV F5 Networks $2.46
AGNC American Capital Agency $0.65
ACC American Campus Communities -$0.07
AMKR Amkor Technology $0.45
CR Crane $1.39
ADC Agree Realty $0.47
SSD Simpson Manufacturing $1.61
AXTA Axalta Coating Systems $0.46
TNET TriNet $0.81
HXL Hexcel $0.01
RRC Range Resources $0.25
PCH Potlatch $2.55
JJSF J&J Snack Foods $0.76
IBTX Independent Bank $1.31
CATY Cathay General Bancorp $0.83
AIN Albany International $0.73
CALX Calix $0.27
IBA Industrias Bachoco Sab De Cv $1.22
ARI Apollo Commercial Real Est Finance $0.36
PPERY PT Bank Mandiri Persero TBK $0.18
CDNS Cadence Design Systems $0.76
OTIS Otis Worldwide Corp $0.72
RYAAY Ryanair -$1.46
HAS Hasbro $0.48
WWD Woodward $0.98
ACKAY Arcelik ADR $0.46
GT Goodyear Tire & Rubber $0.16
TTM Tata Motors -$0.31
CBU Community Bank System $0.80
SANM Sanmina $0.91
BDN Brandywine Realty $0.01
FRME First Merchants $0.91

Tuesday (July 27)

IN THE SPOTLIGHT: GOOGLE (ALPHABET), MICROSOFT, APPLE

GOOGLE (ALPHABET): The parent of Google and the world’s largest search engine that dominates internet search activity globally is expected to report its second-quarter earnings of $19.33 per share, which represents year-over-year growth of about 90% from $10.13 per share seen in the same quarter a year ago.

The Mountain View, California-based internet giant would post revenue growth of more than 45% to around $56.16 billion. It is worth noting that the company, on average, has delivered an earnings surprise of over 43% in the last four quarters.

Alphabet’s better-than-expected results, which will be announced on Tuesday, July 27, would help the stock hit new all-time highs. Alphabet shares surged more than 50% so far this year. On Friday, the stock closed at a fresh record high at $2,660.30, up 3.57%.

MICROSOFT: The Redmond, Washington-based global technology giant would report its fiscal fourth-quarter earnings of $1.91 per share, which represents year-over-year growth of over 30% from $1.46 per share seen in the same quarter a year ago. The world’s largest software maker would post revenue growth of over 15% to around $44.1 billion, up from the $38.03 billion a year earlier.

“Channel work and our CIO survey point to building momentum across the Cloud, Hybrid and On-premise portfolio, which should power a solid Q4. While investors seek reassurances margin expansion continues into FY22, our model suggests durable high-teens EPS growth and upside in the shares,” noted Keith Weiss, equity analyst at Morgan Stanley.

Microsoft’s better-than-expected results, which will be announced on Tuesday, July 27, would help the stock hit new all-time highs. Microsoft shares have surged more than 30% so far this year.

APPLE: The consumer electronics giant would post its fiscal third-quarter earnings of $1.01 per share, which represents year-over-year growth of over 55% from $0.65 per share seen in the same quarter a year ago.

The iPhone manufacturer would post revenue growth of over 20% to around $73.3 billion up from $59.69 billion a year earlier. It is worth noting that the company has beaten earnings in all last eight quarters.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE JULY 27

Ticker Company EPS Forecast
SIRI Sirius XM $0.07
IEX IDEX $1.62
PCAR PACCAR $1.40
MMM 3M $2.29
MSCI Msci $2.31
ENPH Enphase Energy $0.42
LSXMK Liberty Media SiriusXM C $0.36
LSXMA Liberty Media SiriusXM A $0.48
CVLT Commvault Systems $0.52
LOGI Logitech Internationalusa $0.90
MXIM Maxim Integrated Products $0.85
ST Sensata Technologies $0.88
CNC Centene $1.22
UPS United Parcel Service $2.79
TRU TransUnion $0.91
SHW Sherwin-Williams $2.67
IVZ Invesco $0.70
FELE Franklin Electric $0.80
LW Lamb Weston Holdings Inc $0.42
IQV IQVIA Holdings Inc $2.07
RTX Raytheon Technologies Corp $0.93
ENTG Entegris $0.79
LECO Lincoln Electric $1.48
FISV Fiserv $1.28
DTE DTE Energy $1.36
GE General Electric $0.03
ROK Rockwell Automation $2.09
WM Waste Management $1.19
SWK Stanley Black & Decker $2.88
ADM Archer-Daniels Midland $1.02
HUBB Hubbell $2.16
PNR Pentair Ordinary Share $0.79
BSX Boston Scientific $0.37
ECL Ecolab $1.21
PPBI Pacific Premier Bancorp $0.71
GPK Graphic Packaging $0.28
PHM PulteGroup $1.73
AWI Armstrong World Industries $1.05
RGEN Repligen $0.52
SFNC Simmons First National $0.52
SSTK Shutterstock $0.68
ABG Asbury Automotive $4.60
MPWR Monolithic Power Systems $1.69
CHRW C.H. Robinson Worldwide $1.33
MANH Manhattan Associates $0.43
GOOG Alphabet $19.33
CB Chubb $3.00
AMD Advanced Micro Devices $0.54
PGRE Paramount Group -$0.05
SBUX Starbucks $0.77
CAKE Cheesecake Factory $0.72
EGP EastGroup Properties $0.67
AXS Axis Capital $1.42
WSBC WesBanco $0.75
HIW Highwoods Properties $0.33
STAG STAG Industrial $0.12
VIST Vista Oil Gas $0.15
NAVI Navient $0.85
EHC Encompass Health Corp $0.98
OMAB Grupo Aeroportuario Del Centro Nort $11.31
NOV National Oilwell Varco -$0.13
V Visa $1.34
GOOGL Alphabet $19.24
BXP Boston Properties $0.57
AAT American Assets $0.11
MSFT Microsoft $1.91
JNPR Juniper Networks $0.39
BYD Boyd Gaming $0.90
MASI Masimo $0.90
MTDR Matador Resources $0.75
CSGP CoStar $0.23
FIBK First Interstate BancSystem $0.72
OLN Olin $1.44
EQR Equity Residential $0.19
EXR Extra Space Storage $1.06
EPR EPR Properties $0.06
USNA USANA Health Sciences $1.72
THG Hanover $2.38
UMBF UMB Financial $1.75
CHE Chemed $4.29
SYK Stryker $2.13
MDLZ Mondelez International $0.65
MAT Mattel -$0.06
PFG Principal Financial $1.52
AAPL Apple $1.01
TER Teradyne $1.75
VIV Telefonica Brasil $0.13
ASH Ashland $1.31
GLW Corning $0.51
PII Polaris Industries $2.15
JBLU JetBlue Airways -$0.74
RDY Drreddys Laboratories $0.55
XRX Xerox $0.40
CIT CIT $0.86
SID Companhia Siderurgica Nacional $0.86
RNST Renasant $0.77

Wednesday (July 28)

IN THE SPOTLIGHT: FACEBOOK

The world’s largest online social network is expected to report its second-quarter earnings of $3.04 per share, which represents year-over-year growth of about 70% from $1.80 per share seen in the same quarter a year ago. The Menlo Park, California-based social media conglomerate would post revenue growth of over 49% to around $28.0 billion.

“Monetization Potential: We are positive on FB’s monetization roll-out of Instagram as well as FB’s ability to continue to innovate and improve its monetization (Canvas Ads, Dynamic Ads, video). Combined with the high and growing engagement we see monetization upside going forward,” noted Brian Nowak, equity analyst at Morgan Stanley.

“Investing from Position of Strength to Drive Faster Long-Term Growth: We are modeling ~33% GAAP opex (excl. one-time items) growth in 2021, implying an incremental ~$18bn in opex. Our base case model implies opex per employee moderates in ’21 while FB hiring remains roughly flat on an absolute basis. We believe FB will grow EPS at a ~39% CAGR (2019-2022).”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE JULY 28

Ticker Company EPS Forecast
PTC PTC $0.63
URI United Rentals $4.90
ENSG Ensign $0.88
ALKS ALKERMES $0.12
TYL Tyler Technologies $1.63
AMG Affiliated Managers $3.85
SF Stifel Financial $1.38
FIX Comfort Systems USA $0.91
MSA MSA Safety $1.04
CBD Companhia Brasileira De Distrib $0.04
ALGT Allegiant Travel $2.55
GD General Dynamics $2.55
HES Hess $0.11
PFE Pfizer $0.97
QCOM Qualcomm $1.68
HP Helmerich & Payne -$0.56
UMC United Microelectronics $0.14
BA Boeing -$0.81
EQIX Equinix $1.87
DB Deutsche Bank $0.33
RJF Raymond James Financial $2.27
SAN Banco Santander $0.13
HNP Huaneng Power International $0.86
LRCX Lam Research $7.59
APH Amphenol $0.55
EVR Evercore Partners $2.71
PPC Pilgrim’s Pride $0.52
R Ryder System $1.38
NSC Norfolk Southern $2.97
FORM FormFactor $0.33
SHOO Steven Madden $0.31
SCI Service International $0.67
ADP ADP $1.14
MNRO Monro Muffler Brake $0.52
SLAB Silicon Laboratories $0.93
BXMT Blackstone Mortgage $0.60
PAG Penske Automotive $2.76
ROL Rollins $0.18
BCS Barclays $0.54
CAJ Canon $0.33
XLNX Xilinx $0.78
HUM Humana $6.82
AVY Avery Dennison $2.05
NYCB New York Community Bancorp $0.30
SCL Stepan $1.84
GSK Glaxosmithkline $0.55
CME CME $1.61
TEVA Teva Pharmaceutical Industries $0.59
MCD McDonalds $2.11
BSBR Banco Santander Brasil $0.20
EXP Eagle Materials $2.07
DT Dynatrace Holdings $0.15
EEFT Euronet Worldwide $0.65
SPOT Spotify -$0.38
OC Owens Corning $2.14
FMX Fomento Economico Mexicano Sab $14.29
BMY Bristol-Myers Squibb $1.89
VRTS Virtus Investment Partners $8.11
GRMN Garmin $1.26
SIX Swiss Exchange -$0.22
CCJ Cameco USA -$0.05
TDY Teledyne Technologies $2.70
IART Integra LifeSciences $0.66
GNRC Generac $2.30
MCO Moody’s $2.77
VRT Veritas Pharma $0.24
EPD Enterprise Products Partners $0.50
GIB CGI Group USA $1.08
TMO Thermo Fisher Scientific $5.47
TEL TE Connectivity $1.58
SLGN Silgan $0.83
PB Prosperity Bancshares $1.39
ODFL Old Dominion Freight Line $2.17
BG Bunge $1.62
LFUS Littelfuse $2.24
CNMD CONMED $0.62
CP Canadian Pacific Railway USA $1.00
AVB AvalonBay Communities $0.74
ALGN Align Technology $2.52
AM Antero Midstream Partners $0.19
CNO CNO Financial Group $0.54
CINF Cincinnati Financial $0.99
SSNC SS&C Technologies $1.14
MTH Meritage Homes $3.28
TTEK Tetra Tech $0.88
MKSI MKS Instruments $2.95
ROIC Retail Opportunity Investments $0.06
SIGI Selective $1.23
VAC Marriottacations Worldwide $0.89
PDM Piedmont Office Realty $0.05
IRBT Irobot $0.32
UDR UDR $0.01
EXAS Exact Sciences -$0.75
MOH Molina Healthcare $3.39
EQT EQT $0.04
MXL MaxLinear $0.50
IR Ingersoll Rand $0.42
AGI Alamos Gold $0.11
MAA Mid-America Apartment Communities $0.55
KGC Kinross Gold USA $0.13
ESRT Empire State Realty -$0.01
BSMX Santander Mexico Fincl Gp Sab Decv $0.17
CRUS Cirrus Logic $0.39
MUSA Murphy USA $3.21
RE Everest Re $8.58
VALE Vale $1.47
DRE Duke Realty $0.19
PYPL PayPal $1.12
NOW ServiceNow $1.21
CCS Century Communities $2.84
NLY Annaly Capital Management $0.27
TROX Tronox $0.52
XPO XPO Logistics $1.66
SAVE Spirit Airlines -$0.86
PAC Grupo Aeroportuario Del Pacifico $1.14
CHX ChampionX Corp $0.10
NUVA NuVasive $0.44
FBHS Fortune Brands Home Security $1.39
NOVA Nova Mentis Life Science Corp -$0.24
FB Facebook $3.04
ACGL Arch Capital $0.84
CONE CyrusOne $0.04
AR Antero Resources $0.20
AEM Agnico Eagle Mines USA $0.59
RBC Regal Beloit Corporation $2.07
PEGA Pegasystems -$0.18
AFL Aflac $1.28
PKI PerkinElmer $2.44
CHDN Churchill Downs $2.51
PEB Pebblebrook Hotel -$0.65
CTSH Cognizant Technology Solutions $0.96
HOLX Hologic $1.12
KRC Kilroy Realty $0.29
ALSN Allison Transmission $0.93
F Ford Motor -$0.04
ASGN On Assignment $1.29
HIG Hartford Financial Services $1.34
ORLY O’Reilly Automotive $7.51
ISBC Investors Bancorp $0.31

Thursday (July 29)

IN THE SPOTLIGHT: AMAZON.COM

The eCommerce leader for physical and digital merchandise is expected to report its second-quarter earnings of $12.24 per share, which represents year-over-year growth of about 19% from $10.3 per share seen in the same quarter a year ago.

The Seattle, Washington-based multinational technology giant would post revenue growth of about 29% to around $115 billion. The company has beaten earnings per share (EPS) estimates at all times in the last four quarters.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE JULY 29

Ticker Company EPS Forecast
RLGY Realogy $1.08
VSTO Vista Outdoor $0.90
AGCO AGCO $2.20
PCG PG&E $0.28
MATX Matson $2.96
PRFT Perficient $0.79
NATI National Instruments $0.05
GPI Group 1 Automotive $7.59
CFX Colfax $0.53
CMS CMS Energy Corporation $0.46
LYG Lloyds Banking $0.14
MHK Mohawk Industries $3.59
EBS Emergent BioSolutions $1.41
TXT Textron $0.65
AUOTY AU Optronics $0.56
CMCSA Comcast $0.66
VLO Valero Energy $0.17
CG Carlyle $0.60
ABEV Ambev $0.02
NLSN Nielsen $0.36
MTD Mettler Toledo International $7.62
ADS Alliance Data Systems $3.68
FTNT Fortinet $0.88
FTV Fortive Corp $0.60
ASX Advanced Semiconductor Engineering $0.16
LKQ LKQ $0.75
ERJ Embraer -$0.26
TFX Teleflex $2.87
CARR Carrier Global Corp $0.55
CX Cemex Sab De Cv $0.16
ORAN Orange $0.18
CVE Cenovus Energy USA $0.26
MT Arcelormittal $2.52
MA Mastercard $1.74
KBR KBR $0.50
HOCPY Hoya Corp $0.85
YUM Yum Brands $0.96
EIX Edison International $1.02
EME EMCOR $1.58
AGIO Agios Pharmaceuticals -$1.35
KPELY Keppel Corporation $0.18
BUD Anheuser-Busch $0.87
CS Credit Suisse $0.22
DANOY Danone PK $0.45
SNY Sanofi $0.77
AZN Astrazeneca $0.45
TEF Telefonica $0.14
STM Stmicroelectronics $0.37
GRFS Grifolsbarcelona $0.26
THRM Gentherm $0.65
WWW Wolverine World Wide $0.49
CNX Consol Energy $0.24
CBRE CBRE Group Inc $0.77
TAP Molson Coors Brewing $1.35
VC Visteon $0.05
KEX Kirby $0.14
TREE LendingTree -$0.63
SAH Sonic Automotive $1.38
HSY Hershey $1.42
AMT American Tower $1.27
TW Towers Watson $0.39
OSK Oshkosh $2.25
MAS Masco $1.04
MO Altria $1.18
TROW T. Rowe Price $3.19
CTXS Citrix Systems $1.22
SPGI S&P Global Inc $3.26
BAX Baxter International $0.75
ICE Intercontinental Exchange $1.16
SO Southern Co. $0.79
NTCT Netscout Systems $0.18
GOL Gol Linhas Aereas Inteligentes -$0.91
CFR Cullen/Frost Bankers $1.56
CWT California Water Service $0.41
FSS Federal Signal $0.45
AER AerCap $1.37
COLB Columbia Banking System $0.66
COR CoreSite Realty $0.45
WEX WEX $1.95
TMHC Taylor Morrison Home $0.96
XEL Xcel Energy $0.56
FLEX Flextronics International $0.38
SAIA Saia $2.05
OSTK Overstock $0.67
IDA IdaCorp $1.21
FCN FTI Consulting $1.52
LAWS Lawson Products $0.60
WST West Pharmaceutical Services $1.74
MLM Martin Marietta Materials $3.85
MTSI MACOM Technology Solutions $0.53
LH Laboratory Of America $5.62
EXLS ExlService $1.01
BSAC Banco Santander Chile $0.50
AOS A.O. Smith $0.65
TPX Tempur Sealy International $0.56
HBAN Huntington Bancshares $0.32
WAB Westinghouse Air Brake Technologies $0.96
NOC Northrop Grumman $5.83
MMP Magellan Midstream Partners $1.02
HLT Hilton Worldwide $0.39
KDP Keurig Dr Pepper $0.37
OMCL Omnicell $0.82
BC Brunswick $2.14
MRK Merck & Co $1.40
TRP Transcanada USA $0.77
KIM Kimco Realty $0.12
IP International Paper $1.06
MDC MDC $1.99
PRLB Proto Labs $0.44
SGEN Seattle Genetics -$0.61
CPT Camden Property $0.34
SIMO Silicon Motion Technology $1.25
CUBE CubeSmart $0.21
DLB Dolby Laboratories $0.28
BIO Bio-Rad Laboratories $2.66
CC Chemours Co $0.94
ZEN Zendesk $0.16
FWRD Forward Air $0.97
AJG Arthur J. Gallagher $1.08
SPSC SPS Commerce $0.40
ROG Rogers $1.89
ERIE Erie Indemnity $1.51
CUZ Cousins Properties $0.20
WELL Welltower Inc $0.15
PTCT PTC Therapeutics -$1.81
AUY Yamana Gold USA $0.06
LPLA LPL Financial $1.67
WWE World Wrestling Entertainment $0.25
WRE Washington Real Estate Investment -$0.04
TXRH Texas Roadhouse $0.98
ATR AptarGroup $0.97
GLPI Gaming And Leisure Properties $0.57
OFC Orate Office Properties $0.14
RSG Republic Services $0.95
TEX Terex $0.60
X United States Steel $3.08
LBTYA Liberty Global Class A Ordinary Shares $0.46
KLAC KLA-Tencor $3.99
SWKS Skyworks Solutions $2.14
DXCM Dexcom $0.44
HUBG HUB $0.70
VCYT Veracyte -$0.25
POWI Power Integrations $0.75
LGND Ligand Pharmaceuticals $1.38
FHI Federated Hermes Inc $0.66
FSLR First Solar $0.55
CWST Casella Waste Systems $0.24
DLR Digital Realty $0.24
MTX Minerals Technologies $1.25
VRTX Vertex Pharmaceuticals $2.37
PFPT Proofpoint $0.49
ESS Essex Property $0.88
GILD Gilead Sciences $1.73
WERN Werner $0.87
MMSI Merit Medical Systems $0.45
LBTYK LIBERTY GLOBAL $0.46
AMZN Amazon $12.24
QGEN Qiagen $0.65
EW Edwards Lifesciences $0.55
NRZ New Residential Investment $0.31
MSTR Microstrategy $0.81
SM SM Energy -$0.26
SWN Southwestern Energy $0.21
TMUS T-Mobile Us $0.51
DECK Deckers Outdoor -$0.15
CORT Corcept Therapeutics $0.17
TWOU 2U -$0.16
SBH Sally Beauty $0.62
MPW Medical Properties $0.29
CACC Credit Acceptance $10.36
SJW SJW $0.64
SHEN Shenandoah Telecommunications $0.86
ES Eversource Energy $0.80
KMPR Kemper $1.33
WRI Weingarten Realty Investors $0.10
OPK Opko Health $0.02
SU Suncor Energy USA $0.39
APELY Alps Electric $0.11
ACI AltaGas Canada $0.69
EXPO Exponent $0.42

Friday (July 30)

Ticker Company EPS Forecast
KMTUY Komatsu $0.40
VFC VF $0.11
ABR Arbor Realty $0.42
PEXNY PTT Exploration & Production $0.16
LAZ Lazard $0.89
HRC Hill-Rom $1.35
XOM Exxon Mobil $1.00
COG Cabot Oil Gas $0.29
MFG Mizuho Financial $0.08
GCTAY Siemens Gamesa ADR $0.02
TU Telus USA $0.21
JCI Johnson Controls $0.83
CL Colgate-Palmolive $0.80
BAH Booz Allen Hamilton $0.97
TOTDY Toto $0.25
ASEKY Aisin Seiki Co $1.13
BBVA Banco Bilbaoizcaya Argentaria $0.06
E ENI $0.33
FMS Fresenius Medical Care $0.48
SMFG Sumitomo Mitsui Financial $0.21
SBGSY Schneider Electric SA $0.63
PG Procter & Gamble $1.09
CHD Church Dwight $0.70
ALNPY ANA Holdings ADR -$0.20
CVX Chevron $1.58
BNPQY BNP Paribas ADR $1.07
NMR Nomura $0.17
CHT Chunghwa Telecom $0.34
HUN Huntsman $0.81
LIN Linde PLC $2.55
AON AON $1.85
PNM PNM Resources $0.46
CAT Caterpillar $2.41
CPRI Capri Holdings Ltd $0.79
BLMN Bloomin’ Brands $0.66
CHTR Charter Communications $4.79
DAN Dana $0.50
ITW Illinois Tool Works $2.09
GWW Grainger $4.59
CERN Cerner $0.76
NWL Newell Brands Inc $0.45
POR Portland General Electric $0.37
ENB Enbridge USA $0.45
LYB LyondellBasell Industries $5.30
ABBV AbbVie $3.08
SHLX Shell Midstream Partners $0.35
WPC W. P. Carey $0.56
AVNT Avient Corp $0.81
WY Weyerhaeuser $1.37
IDXX Idexx Laboratories $2.02
BCPC Balchem $0.82
For a look at all of today’s economic events, check out our economic calendar.

Tesla Stock Keeps Its Cool Ahead of Upcoming Earnings

Elon Musk drums up so much attention for his cryptocurrency portfolio that Tesla seems to take a backseat. In less than a week, however, Tesla will be thrust back into the spotlight when the electric vehicle maker reports its Q2 earnings on July 26. The stock is up by more than 1% today. After a white-hot stretch that started last year, TSLA shares are off their best levels of 2021.

More often than not, investors tend to be bullish on Tesla’s stock in the days before its quarterly earnings release. Barron’s pointed out that the average increase in the trading sessions leading up to earnings is 1.6%.

Software vs. Hardware

Morgan Stanley analysts reportedly suggest that Tesla’s revenue model could shift to where the company generates more sales from software vs. hardware, such as its Model 3s, for instance. The analysts address a shift in Wall Street coverage away from the traditional auto sector to more of a tech stock, which could warrant a rerating of the stock.

Tesla sells various software packages including a recently introduced Full Self Driving monthly subscription for USD 199 rather than a USD 10K lump sum. In turn, Tesla collects ongoing revenue and could attract more drivers with the added payment options. Tesla reminded drivers that the software won’t make the vehicle drive itself and they still must stay “fully attentive” and keep their “hands on the wheel.”

Performance Snapshot

Tesla already provided a snapshot into its Q2 performance with some stats, including the delivery of more than 200K vehicles across Model S/X and Model 3/Y despite supply chain constraints. The more vehicles that Tesla delivers, the more bullish the outlook for the stock as this means fewer cars sitting in inventory and more of them on the open road.

In addition, some performance results out of China are available thanks to China Automotive Information Net data cited by Bloomberg. Tesla saw close to a 30% spike in the number of registrations last month to more than 28,500 for the following vehicles that were built at its Shanghai site:

  • Model 3 sedans
  • Model Y SUVs

Meanwhile, Model 3 registrations came close to 17K and registrations for Model Y vehicles dipped vs. May levels. Last year, Tesla generated USD 6.6 billion in sales from China, representing about 20% of its overall revenue.

Tesla Launches Subscription Service for Advanced Driver Assistance Software

Tesla has previously said its subscription service would generate recurring revenue and expand the customer base for pricy features including lane changing on highways and parking assistance.

But the U.S. electric carmaker reiterated on Saturday that the current features “do not make the vehicle autonomous,” adding they “require a fully attentive driver, who has their hands on the wheel.””FSD capability subscriptions are currently available to eligible vehicles in the United States. Check your Tesla app for updates on availability in other regions,” Tesla said on its website.

Tesla’s CFO Zachary Kirkhorn said in April that its planned subscription service would generate recurring revenue for the company, although “there could be a period of time in which cash reduces in the near term.”

“If … you look at the number of customers who did not purchase FSD upfront or on a lease and maybe want to experiment with FSD, this is a great option for them,” he said during an earnings call in April.

Tesla said the subscription service is available in vehicles equipped with Full Self-Driving computer 3.0 or above. It told customers that upgrading to the new hardware will cost $1,500.

Tesla Chief Executive Elon Musk forecast in 2019 that robotaxis with no human drivers would be available in some U.S. markets in 2020. In March, Tesla told a California regulator that it may not achieve full self-driving technology by the end of this year.

Tesla has been testing its new semi-autonomous driving software for city streets and last week released “FSD Beta v9” to a limited number of customers.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Hyunjoo Jin; Editing by Kirsten Donovan and Daniel Wallis)

Baby Doge Follows in Meme Father’s Footsteps, Makes Payments Push

While bitcoin continues to drag most altcoins lower, one cryptocurrency is bucking the downward trend: Baby Doge Coin. The newcomer to the cryptocurrency scene is up by a double-digit percentage in the last 24-hour period, according to CoinGecko. Over the past seven days, however, Baby Doge has shaved off roughly one-third of its value.

Source: CoinGecko

E-Commerce Push

Baby Doge Coin claims to have “learned a few tricks and lessons” from its “meme father Doge.” Now Baby Doge is looking to make a major splash in the e-commerce space. The project has been teasing a new partnership that will pave the way for the dog-themed cryptocurrency to be used as a payment method at millions of online businesses. Now it’s official.

Baby Doge Coin has teamed up with crypto commerce company Coin Payments in an official capacity, the project’s Telegram channel revealed. The deal has the potential to give the cryptocurrency great exposure, as it “can be integrated as a payment method by an estimated 5.4 million e-commerce businesses worldwide built on” the following platforms:

  • Shopify
  • Magnento
  • WooCommerce

While Baby Doge hasn’t partnered with the brands on these platforms themselves, some of the companies on Shopify include household names such as Tesla, Anheuser-Busch, PepsiCo and others. The new payment capabilities represent one of the maiden use cases for the meme coin, on top of its mission to save dogs.

Papa Meme Coin

Dogecoin has already been strengthening its use case as a payment method, but investors have their sights set higher. The Dogecoin community is waiting for the day that Tesla decides to accept the meme coin as a form of payment. Elon Musk’s other company, SpaceX, will reportedly accept Dogecoin for its spaceflight. In addition, small businesses are increasingly jumping on the Dogecoin bandwagon.

Meanwhile, Dogecoin has also captured the attention of individual brands. Consumer products maker Axe has teased a new “Dogecan” that will apparently make its debut on July 20.

Axe, a Unilever brand, teased the product in recent days before making it official. The announcement drummed up excitement in the Dogecoin community at a time when the DOGE price has been in the doldrums. Even Dogecoin co-founder Billy Markus got caught up, tweeting, “Hello. I would like to redeem my ‘pseudo influencer’ card to get me some of this for free.”

Today’s Market Wrap Up and a Glimpse Into Tuesday

The S&P 500 notched another all-time high today as stocks extended Friday’s gains. Tesla was a big winner as CEO Elon Musk took the spotlight. Investors are also optimistic about the second-quarter earnings season, which will feature a couple of big banks on Tuesday.

The Dow Jones Industrial Average tacked on more than 100 points in the session, closing just below the 35,000 threshold, while the tech-heavy Nasdaq was fractionally higher.

Stocks to Watch

Financial stocks JPMorgan and Goldman Sachs will both report their quarterly results on Tuesday before the bell. Investors sent both stocks higher on Monday, with JPMorgan and Goldman up more than 1% and 2%, respectively. Banks have been flexing their strong balance sheets this year and the second quarter is unlikely to be any different.

Disney was a big gainer on the day, advancing by 4%. Investors cheered the fact that the company will raise the price for ESPN+ monthly subscriptions by USD 1 to USD 6.99, effective in August. The price increase bolsters the annual subscription rate to USD 69.99 while the price for the bundle that includes ESPN+, Disney + and Hulu will stay the same. Disney’s ESPN+ boasts nearly 14 million subscribers.

Tesla similarly gained more than 4% in the trading session. Elon Musk was in court to stick up for the electric vehicle company’s decision to scoop up SolarCity in a USD 2.6 billion deal half-a-decade ago. Shareholders allege in a lawsuit that the deal was a bailout of the solar company, which Musk vehemently denies. If things don’t go Musk’s way in court, he could be on the hook for USD 2 billion.

Virgin Galactic on Sunday had a successful spaceflight with founder Richard Branson on board, but the stock took it on the chin today. The company revealed its plans to issue as much as USD 500 million in stock, which sent shares tumbling more than 17% to barely holding onto USD 40.

Look Ahead

If anything can cause the stock market rally to stumble, it could be further signs of inflation. That’s why investors will be paying close attention to the Consumer Price Index data for June that will be released on Tuesday morning. Wells Fargo is predicting a 0.6% increase.

On the earnings front, in addition to financial stocks, consumer staple company PepsiCo will also be reporting second-quarter earnings on Tuesday.

Tesla Lifts Wall Street to Close at Record Highs

The S&P 500 financials, communication services and real estate sector indexes each gained more than 0.8%.

Tesla rallied over 4% and was the top contributor to gains in the S&P 500 and Nasdaq. CEO Elon Musk insisted in court on Monday he does not control Tesla, and he said he did not enjoy being the electric vehicle company’s chief executive as he took the stand to defend the company’s 2016 acquisition of SolarCity.

The S&P 500 banks index climbed 1.3% ahead of quarterly earnings reports this week from major banks, including Goldman Sachs and JPMorgan on Tuesday. JPMorgan Chase rose over 1% and Goldman Sachs rallied more than 2%, fueling the Dow’s gains.

Investors will closely watch quarterly reports for early clues on the how long the U.S. economic recovery may last, with June-quarter earnings per share for S&P 500 companies expected to rise 66%, according to IBES data from Refinitiv.

The S&P 500 has rallied about 17% so far this year, with some investors questioning how long Wall Street’s rally may last and concerned about a potential downturn.

“Earnings season is going to be warmly greeted as an opportunity for existing biases to be confirmed,” warned Mike Zigmont, head of trading and research at Harvest Volatility Management in New York. “Even if forecasts are not as rosy as what the most bullish had hoped, it’s all going to get rationalized away.”

Focus this week will also be on a series of economic reports, including headline U.S. inflation data and retail sales. As well, Federal Reserve Chair Jerome Powell is due to appear before Congress on Wednesday and Thursday for views on inflation.

Investors have been concerned about higher inflation and the spread of the Delta coronavirus variant in the past few sessions, with traders seesawing between a preference for economy linked-value stocks and tech-heavy growth names.

The Dow Jones Industrial Average rose 0.36% to end at 34,996.18 points, while the S&P 500 gained 0.35% to 4,384.63.

The Nasdaq Composite climbed 0.21% to 14,733.24.

All three closed at their highest levels ever.

Walt Disney jumped over 4% to a two-month high after it and Marvel’s “Black Widow” superhero movie took in $80 million in its first weekend. And the entertainment company plans to raise prices for its ESPN Plus streaming service.

Didi Global Inc dropped about 7% after it confirmed China’s cyberspace administration notified app stores to remove the ride-hailing company’s 25 apps and said the move could impact its revenue in the region.

Virgin Galactic Holdings tumbled 17% after the space tourism company said it may sell up to $500 million worth of shares, a day after the company completed its first fully crewed test flight into space with billionaire founder Richard Branson on board.

Volume on U.S. exchanges was 8.3 billion shares, compared with the 10.5 billion average for the full session over the last 20 trading days.

Advancing issues outnumbered declining ones on the NYSE by a 1.43-to-1 ratio; on Nasdaq, a 1.11-to-1 ratio favored advancers.

The S&P 500 posted 66 new 52-week highs and no new lows; the Nasdaq Composite recorded 85 new highs and 38 new lows.

For a look at all of today’s economic events, check out our economic calendar.

(Additional reporting by Devik Jain and Shreyashi Sanyal in Bengaluru; Editing by Maju Samuel and Cynthia Osterman)

Musk Tells SolarCity Trial That Tesla Would ‘Die’ If He Wasn’t CEO

The lawsuit by union pension funds and asset managers alleges the celebrity CEO strong-armed Tesla’s board of directors into depleting the company’s assets with the $2.6 billion all-stock deal for SolarCity, which was running out of cash.

Musk at the time owned a 22% stake in both Tesla and SolarCity, which was founded by his cousins, and some Tesla shareholders alleged the deal was aimed at bailing out Musk’s investment in the solar panel company.

Kicking off a two-week trial in Wilmington, Delaware, Musk, wearing a dark suit, white shirt and a slightly askew dark tie, testified that he has tried “very hard not to be the CEO of Tesla, but I have to or frankly Tesla is going to die.”

The lawsuit accuses Musk of dominating the board’s deal discussions, pushing Tesla to pay more for SolarCity and misleading shareholders about the company’s deteriorating financial health.

Musk told the court that the Tesla board handled the SolarCity deal and he was not part of the board committee that negotiated the terms.

“I don’t even know what happened,” he testified.

Musk responded calmly during cross-examination from shareholder attorney Randall Baron, but Baron’s yes or no questions often elicited lengthy, meandering responses. At one point Musk called the lawyer “a bad human being.”

Baron asked if the board vetted his Technoking title, which he gave himself in March.

“It generated a whole bunch of free press and Tesla doesn’t advertise and it’s helpful to general sales,” he said. He called the title a joke: “I think I’m funny.”

Shares of Tesla were up about 4% in late Monday trading at $684.44.

Central to the case are claims that despite his minority stake, Musk was a controlling shareholder of Tesla due to his ties to board members and domineering style. That designation would impose a tougher legal standard and increase the likelihood that the court would conclude the deal was unfair to shareholders.

Shareholders have asked the court to order Musk, one of world’s richest people, to repay to Tesla what it spent on the deal.

Musk was initially questioned for about an hour by his attorney, Evan Chesler, who asked him to describe his relationship with the board.

“I’d say good,” Musk replied. “They work hard and are competent. They provide good advice and are rigorous in acting on behalf of shareholders.”

He said he did not set pay for directors or have the ability to fire or hire them. He also said that because he owned the same percentage of stock in both companies and there was no cash involved in the deal, he didn’t benefit. He said the merger was aimed at combining Tesla’s battery business with SolarCity’s sustainable energy generation.

“There was no financial gain,” he testified.

Legal experts said the judge will be looking for evidence that Musk threatened board members or that directors felt they could not stand up to him. Board members and others involved in the 2016 deal will testify beginning as soon as Tuesday.

Baron warned Musk at the start of questioning that the executive could be on the stand through Tuesday. “We plan to spend a lot of time with you. It’s going to be a grind.”

Musk grimaced, poked at the thick binder exhibit and replied, “I can tell by the binder.”

Tesla’s directors settled allegations from the same lawsuit last year for $60 million, paid by insurance, without admitting fault.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Tom Hals in Wilmington, Delaware; Editing by Noeleen Walder, Daniel Wallis, Andrea Ricci and Sonya Hepinstall)

Binance’s CZ Gives Baby Doge Fans Something to Talk About

Now that Elon Musk has shined the spotlight on Baby Doge Coin, a meme coin that was inspired by its larger peer Dogecoin, other market leaders are beginning to pile on. Most recently, Binance CEO Changpeng Zhao (CZ) has played into the Baby Doge hype.

CZ caused a stir in the Baby Doge community after responding to a tweet with a gif of baby puppies. The Binance chief merely referenced the license plate of the car in the gif, which reveals his initials CZ, saying “nice plate number.” While CZ was subtle in his response, it was enough to get the Baby Doge Coin community talking and pontificating about a potential Binance listing.

Source: Twitter

Bullish Overtone

CZ was careful not to reference a Binance listing, and he is generally quick to remind his followers that his tweets are not financial advice. The overtone of this tweet, however, has Baby Doge written all over it. The gif was posted by Twitter account Soul_Lisker, who says they trade as a hobby and boasts more than 10,000  followers.

Many Baby Doge fans simply responded with moon emojis, in hopes that the price will go to the moon. In fact, the Baby Doge price has seen new heights since Elon Musk tweeted about the meme coin last week. It has exhibited some wild swings in its short history and most recently added more than 30% to its market cap in the last 24 hours alone.

Source: CoinGecko

Meanwhile, others who responded to CZ proceeded to exclaim what a good pairing Binance and Baby Doge could be. Some followers challenged him, speculating that it was a race between Binance and Coinbase to list Baby Doge Coin first. A listing on either trading platform could do a lot for liquidity in Baby Doge Coin, which continues to trade for fractions of a penny.

Listings on His Mind

CZ also tipped his hand over the weekend that he is thinking about more listings on Binance. In a tweet, he put feelers out to his followers on which cryptocurrencies the exchange should list next, adding a disclaimer that he is not in charge of such decisions. Of the more than 42K responses that CZ received, many were touting meme coins, including Baby Doge.

 

While Baby Doge Coin may be a newcomer to the cryptocurrency scene, it has been growing hand over fist. The cryptocurrency already has more than 300K holders in a little over a month since it launched.

Musk Set to Tout Starlink Progress as Cost, Demand Hurdles Linger

By Hyunjoo Jin and Supantha Mukherjee

Starlink, which cost him C$600 dollars (US$486) for hardware and a lofty C$150 monthly subscription, provides “blindingly fast” speeds when uploading videos or streaming movies, he said.

But the beta test customer said he experiences dropouts during calls on Microsoft Teams and Zoom.

“If you’re in the city and you have alternatives, I wouldn’t recommend it. But if you’re in the country, like in the middle of nowhere and you’re getting pathetic internet service, then it’s definitely a competitor.”

For billionaire entrepreneur Elon Musk – founder of electric vehicle manufacturer Tesla Inc – the success of one of his biggest bets may come down to just how many people like Joyce are out there.

Musk on Tuesday is expected to discuss Starlink’s progress in a speech at the Mobile World Congress telecommunications event, an audience with a lot at stake in the fate of Starlink. If the service is successful, it could vastly expand the reach of broadband internet around the world, connect Tesla vehicles, and even provide a new platform for traders and others with exotic internet needs, people familiar with the Starlink plan said.

But to do that, it must avoid the fate of similar satellite ventures that have preceded it.

“Not bankrupt, that would be a big step,” Musk said last year. “That’s our goal.”

SpaceX’s Starlink division launched its “Better Than Nothing Beta program” in the United States last October, with data speeds up to a competitive 150 megabits per second. Early reviews are mixed, with some users complaining of the problems that have always plagued satellite internet: sensitivity to weather.

Recent heat waves have caused new problems.

“I’m gonna have to spray it with a garden hose to reboot my internet… That just feels so wrong,” a Reddit user who said he lives in Arizona posted earlier this month, along with an error message saying “Offline: Thermal shutdown” and “Starlink will reconnect after cooling down”.

SpaceX President Gwynne Shotwell in April said the firm has “a lot of work to do to make the network reliable”. The company on Tuesday did not have an immediate comment.

Service should improve with more satellites and other improvements: Starlink has launched over 1,700 of its 260 kilogram satellites so far, and envisions more than 40,000.

The economics are daunting nonetheless. Musk has said Starlink could serve less than 5% of internet users and still generate $30 billion a year in revenue. Critics called that wishful thinking.

“Is the demand there for tens of millions of subscribers at that price point?” asked analyst Tim Farrar, president at TMF Associates. “In most parts of the world, if you said to someone, your broadband service will cost you 100 U.S. dollars a month, they’d be like, incredulous.”

He said there might be wealthy people in isolated areas, “but there’s just not very many of those people”.

He said Starlink would also struggle for enough capacity to support that level of demand, especially as people are consuming more data for video streaming. That would mean “significant additional expenditure on upgrading the satellites and adding more satellites.”

RURAL SUBSIDIES

Pricing pain could be eased by nearly $900 million in Federal Communications Commission subsidies earmarked for Starlink for bringing the internet to rural areas.

Jonathan Hofeller, SpaceX’s vice president, said COVID-19 highlighted the need for “access to quality internet” anywhere on the globe.

Perhaps more importantly, Starlink said it can drive costs down by building its own terminals and satellites. It has hired engineers from chipmakers Broadcom Inc, Qualcomm Inc and others to design its own communications chips, a person familiar with the matter said – an approach similar to that taken by Tesla.

Starlink has more than halved the terminal cost from $3,000 and expects it to be in a range of a few hundred dollars within the next year or two, Shotwell said in April.

“Lowering Starlink terminal cost, which may sound rather pedestrian, is actually our most difficult technical challenge,” Musk tweeted last year.

Starlink also benefits from SpaceX’s low-cost launch capability.

“When you own pieces of the stack, you can do really technically sophisticated things at an affordable cost,” said Misha Leybovich, a former Starlink sales director.

Still, competition promises to be fierce. Amazon.com Inc subsidiary Kuiper has a directly competing project, while OneWeb – a collapsed satellite operator rescued by the British government and India’s Bharti Group – has vowed to be in the game as well. Terrestrial telecom providers, meanwhile, are racing to deploy high-speed, fifth-generation (5G) broadband services.

The rapid spread of wireless and terrestrial broadband, along with high prices, were significant factors in killing previous low-Earth-orbit satellite ventures. Motorola-backed Iridium Communications Inc went through bankruptcy after billions of dollars in investment, while a similar fate met Teldesic, backed by Microsoft Corp founder Bill Gates.

SpaceX, Amazon and a number of others have “created quite a race that no one is absolutely sure whether there is a big enough market for it,” Iridium Chief Executive Matthew J. Desch told Reuters.

(Reporting by Hyunjoo Jin and Supantha Mukherjee; Editing by Jonathan Weber and Christopher Cushing)

Tesla Shares Up Despite Ongoing Challenges In China

The shares of the electric vehicle manufacturer are up at the pre-market trading session today, despite its challenges in China. The company has issued a soft recall of 285,000 cars in China. However, that hasn’t affected its stock price.

Tesla Shares Up By 1.9% Today

The shares of the leading electric vehicle manufacturer, Tesla, are up by 1.9% at Monday’s pre-market trading session. This is despite the company’s ongoing challenges in China. During the weekend, China’s vehicle safety authority, the State Administration for Market Regulation (SAMR), revealed that Tesla is carrying out a voluntary recall of its Model 3 and Model Y vehicles in the country.

Tesla is issuing the recall via a software update on 285,520 of the vehicles. The software update will fix alleged safety issues with the driver-assistance systems. According to the report, the recall covers 249,855 Model 3 sedans and Model Y manufactured by the company in Shanghai and another 35,665 Model 3 vehicles manufactured in the United States and imported to China.

The company’s stock price has gone up at Monday’s pre-market trading session, despite the recall challenges in China. At the time of this report, TSLA is trading at $684, up by 1.9% over the past few hours. Year-to-date, TSLA has declined. The stock began 2021 trading at $729, rising to a high of $880 in January. However, it has dipped since then and currently trades close to the $700 mark.

TSLA stock chart. Source: FXEMPIRE

Tesla Users Don’t Have To Bring The Cars To The Factory

SAMR said the affected vehicles don’t have to be brought to the factory. The update would be conducted over the internet. The alleged flaw in Tesla’s systems could lead to drivers mistakenly switching on or off an active cruise control feature in their Model 3 or Model Y cars under certain conditions. If that happens, a driver’s Tesla could suddenly accelerate, which could lead to collisions, the SAMR said.

Tesla has made it possible to conduct software updates over the internet to cars. The company has become a foreign luxury brand in China as it retains a market share despite the other electric car manufacturers in the country.

Dogecoin Price Hits a Stride Amid Proposal to Slash Fees

Dogecoin is trading about 4% higher alongside leading cryptocurrency bitcoin, to which it is often compared. While bitcoin is the first cryptocurrency, Dogecoin has been gaining popularity as the narrative shifts toward the meme coin’s sustainability and speedy transaction times outperforming its larger peer. Now investors have yet another reason to pile into DOGE — potentially lower fees.

100x Cheaper DOGE Transactions

The Dogecoin team would like to make it easier for users to transact in DOGE as exchange rates vs. USD and BTC have changed the dynamic, making it pricier to send the sixth-biggest cryptocurrency. The developers have proposed slashing  average transaction fees by “100x for standard transactions on the Dogecoin chain.”

The Dogecoin community is mulling the fee-change proposal, which could secure DOGE’s role in the future of the cryptocurrency ecosystem even further. As it stands, Dogecoin transactions are already cheap. They have been known to cost less than a penny, though they most recently go for USD 0.492, as per BitInfoCharts.com.

The proposal was submitted on Github by Dogecoin core developer Patrick Lodder, the coding change for which was spearheaded by developer Michi Lumin. It has won the support of much of the DOGE community, including the “Dogefather” himself, Tesla CEO Elon Musk, who tweeted that the fee change “is important to support.”

Source: Twitter

In addition to Musk, the fee change proposal also won the support of Dogecoin co-creator Billy Markus, who goes by the handle Shibetoshi Nakamoto on Twitter. Markus reminded the Dogecoin community that he set the fee model to “1 DOGE in 2013 after a spam attack” and that “it would be cool to see it get reduced eight years later!”

While DOGE transactions would be next to nothing, spamming the network would cost a minimum of 3x as much as year-ago levels based on the current rate of exchange, as per Lodder.

More Competitive DOGE

The Dogecoin team has introduced the proposed fee changes in an attempt to keep the network competitive with Litecoin and bitcoin. According to the proposal,

“Where transacting DOGE used to be 10x cheaper than transacting LTC, it is as of ting nearly 5x more expensive. Therefore, it makes sense to reduce fees by at least 50x to stay competitive.”

Included in the proposal are the following potential changes:

  • “Lower the minimal relay fee to 0.001 DOGE”
  • “Lower the dust limit to 0.01 DOGE” (the amount left over from a transaction)
  • “Set the default block inclusion fee rate to 0.01 DOGE”
  • “Bring back a functional free transaction space”
  • “Lower the default fee rate to 0.01 DOGE”

Dogecoin developers are addressing fees while the cost to send Ether or bitcoin has been on the decline of late. The lower DOGE fees could incentivize users to transact more feverishly on-chain rather than stashing their coins away on Coinbase or some other centralized exchange.

Elon Musk Toys With Shiba Inu Fans and Bitcoin Maximalists

Elon Musk is toying with the cryptocurrency community once again. This time, the Tesla chief is sharing the love with Shiba Inu fans while poking the bitcoin crowd. Cryptocurrency investors know the influence that Musk seemingly has on the direction of the market, and many are trying to get in his good graces.

The meme token has managed to do just that, as evidenced by one of Musk’s latest tweets. He randomly proclaimed that his “Shiba Inu will be named Floki,” seemingly in reference to the shipbuilder character on the series Vikings. The reference seems to suggest that the Shiba Inu team is building something Musk supports. The tweet amassed nearly 17K replies and 18K retweets.

Love/Hate Relationship

Musk flexed his muscle in the cryptocurrency market in which he has a love/hate relationship. The SHIB token is climbing higher by almost 9% and climbing while the broader cryptocurrency market remains in the doldrums. Crypto investors either cheered Musk for the price gains or blamed him for manipulating the markets, and a variety in between.

Source: TradingView

Poking the Bear

While Musk is winning friends in meme coin circles, he is stirring things up among bitcoin investors, especially those who are all in on the leading cryptocurrency, known as maximalists. Musk, whose gripe against bitcoin is the energy consumption involved with mining, poked the bear, asking, “How many Bitcoin maxis does it take to screw in a lightbulb?”

His clever tweet attracted a slew of responses, including the bitcoin bull himself, Michael Saylor, who cleverly replied, “If you give us 10 minutes, maybe we can hash out the answer.” The 10-minute nod is in reference to the time it takes for a block to be verified on the Bitcoin blockchain and for miners to be rewarded.

Source: Twitter

In a conversation that also played out on Twitter, billionaires Elon Musk and Jack Dorsey, a bitcoin bull, have agreed to have a “talk” on bitcoin that will seemingly be broadcast at a July event.

Crypto Rivalries

Rivalries between the cryptocurrency communities are nothing new, but they tend to heat up with prices are under pressure as investors become on edge. In bitcoin’s case, its value has been nearly slashed in half since its peak of more than USD 64K. Bitcoin bulls see it as a buying opportunity.

The Shiba Inu price has been under pressure of late as well. SHIB investors have tried to no avail to bring attention and liquidity to the token by scoring listing on major exchanges, just as their larger rival Dogecoin has already managed to do. Perhaps Musk can put in a good word.

Today’s Market Wrap Up and a Glimpse Into Friday

An infrastructure deal was reached in Washington, D.C. and stocks were up on Wall Street. The S&P 500 set a new record high after rising fractionally to 4266.49. The broader market index last reached a new high in mid-June. The recent Fed-induced losses did not last long as investors decided to look at the market glass as half-full.

The Dow Jones Industrial Average isn’t too far from its new all-time high after tacking on about 1% in Thursday’s session. The Nasdaq was fractionally higher. Some of the standouts in today’s session include:

  • Tesla gained 3.5%, extending yesterday’s rally.
  • Caterpillar rose 2.6%, reclaiming some ground it lost on inflation and rate-hike fears last week.
  • FedEx stock is down in extended hours despite experiencing record Q4 earnings and revenue that increased 27%. The company swung to a profit after a quarterly loss in the year-ago period, reporting net income of USD 1.87 billion, or USD 6.88 per diluted share. The transportation company’s services have been in high demand throughout the pandemic, including the delivery of vaccines. The stock is seeing heavy options activity including bullish expectations for shares to gain as much as 18% by the July expiration of contracts.

Stocks to Watch

Nike stock is up 11% in after-hours trading after beating on the top and bottom lines with Q4 results. The company’s results were driven by a recovery in the North American region, where sales grew more than twofold YoY to a new peak of USD 5.38 billion. Nike also experienced robust results in China and its digital sales segment. The trend of comfortable clothing is persisting even after the lockdowns have lifted.

In addition, The Trade Desk, an ad stock, gained 17% today and is trading higher in the after-hours. The stock is benefiting from Google’s decision to delay its move to do away with cookies until 2023. Google is making the change in response to privacy concerns and was initially expected to remove the tracking tech next year.

Look Ahead

On the economic front, personal income and spending for May will be released on Friday. Now that the government stimulus checks are a thing of the past, the expectations are for a further decline in personal income. It will likely not be of the same magnitude as the 13.1% MoM drop in April over March levels, but economists, nonetheless, are expecting a decline. Personal spending is expected to rise slightly.