Daily Market News: Tesla delivers fifth quarter of profit, record sales

Adam Vettese, UK Market Analyst at eToro, has provided his daily commentary on traditional and crypto markets for October 22, 2020.

Tesla matched up to investor expectations in its post-market close Q3 earnings report on Wednesday. The company, one of 2020’s highest-profile stocks, delivered its fifth consecutive quarter of profit, with a $331m GAAP net income on revenue of $8.8bn. Tesla said that it delivered a record 139,300 vehicles during the third quarter of the year, an increase of more than 40% in the same quarter this year.

That figure means the company has a chance of hitting its target to deliver 500,000 vehicles this year, although it will need to deliver over 180,000 in the final quarter of the year to hit that. “Achieving this target depends primarily on quarter-over-quarter increases in Model Y and Shanghai production, as well as further improvements in logistics and delivery efficiency,” the company said. Tesla stock jumped more than 3% in after-hours trading following the earnings release.

Snap stock jumps 28% after earnings, helping Twitter higher

All three major US stock indices fell marginally yesterday, the energy sector was the biggest loser down 2%, while the communication services sector stood out at a 1.3% gain. In the S&P 500, which closed down 0.2%, Twitter led the way with an 8.4% gain, on the back of blockbuster earnings results from social media rival Snap. For its part, Snap stock soared 28% after it posted revenue that was up more than 50% year-over-year. Year-to-date Snap stock is now up more than 120%, and over 175% in the past 12 months. At the bottom of the S&P 500 was craft e-commerce website Etsy, which sank 8.1%, while Netflix was down 6.9%. Netflix’s tumble followed its Tuesday after-hours earnings update, where it reported that the company added 2.2 million new memberships in Q3, down from the 6.8 million it added in Q3 2019. In total, Netflix now has 195.2 million subscribers.

  • S&P 500: -0.2% Wednesday, +6.3% YTD
  • Dow Jones Industrial Average: -0.4% Wednesday, -1.2% YTD
  • Nasdaq Composite: -0.3% Wednesday, +28% YTD

FTSE 100 tumbles close to 2%

The FTSE 100 tumbled yesterday, taking its year-to-date loss to -23.4%, and the gap between the performance of the index and the FTSE 250 up to almost five percentage points in 2020. International Consolidated Airlines Group fell furthest, ending the day 6% lower, following a report on Tuesday evening showing the devastating cash toll that the pandemic is having on the UK’s airports. More than a dozen FTSE 100 names lost 3% or more on Wednesday, with others including online takeaway delivery service Just Eat and defense firm BAE Systems.

In the FTSE 250, which closed the day 0.8% lower, there were two double-digit losers. One of those was gold miner Centamin, which sank 19.2% after reporting production and sales declines in Q3. The firm reported that sales volume by weight fell 9%, offset by a 12% increase in gold prices, but the firm also forecast lower production for 2021.

  • FTSE 100: -1.9% Wednesday, -23.4% YTD
  • FTSE 250: -0.8% Wednesday, -18.7% YTD
forex and crypto market analysis

What to watch

Intel: Chipmaker Intel has lagged the broader index year-to-date, with its share price down more than 10% in 2020. One point of interest will be the company’s planned sale of its flash memory business, for $9bn, that was revealed over the past week. Investors will be watching for details of how the company plans to consolidate its focus on its chip and data centre businesses, and invest the proceeds of the sale, when it reports its latest set of quarterly earnings today. Currently Wall Street analysts are split on the stock but lean towards a hold rating on aggregate.

Coca-Cola: In 2020, Coca-Cola has been outpaced by key rival PepsiCo share price-wise. Coca-Cola stock is down 9.7% year-to-date, while Pepsi has eked out a 2.1% gain. The firm reports its latest quarterly earnings today; investors will be watching for how the lifting and partial lifting of lockdowns in various regions of the world have impacted revenues, and details of any continued cost-cutting. Resurging Covid-19 cases in multiple key regions, and the potential to draw out the sales pain Coca-Cola has faced in recent quarters will also be front of mind for investors. Analysts are expecting a $0.46 per share earnings figure for Q3.

Southwest Airlines: The CEO of budget US airline Southwest has told employees he has a plan to prevent furloughs and layoffs into 2021, and has taken steps including cutting his own salary to $0 and slashing executive pay. Last month, however, he told CNBC that there is “no reason to believe that things are going to improve anytime soon”. As with all airlines, Southwest’s passenger numbers have been decimated, and the company’s share price is down 26.2% year-to-date. That is a far better performance than major carriers United, Delta and American, which have all had their share prices roughly cut in half this year. Southwest holds its Q3 earnings call today.

Crypto corner: Buying Bitcoin at any price has been profitable 99% of the time, finds new research

Buying Bitcoin at any point in time since its creation would have been a profitable trade 99% of the time, following the latest price surge.

Bitcoin has seen its price rocket throughout October and is now closing in on the $13,000 mark, its highest level since the end of 2017, when it reached record highs.

New research from LookIntoBitcoin charts shows there have been 3663 profitable days since it was created, out of a total of 3718 days of trading in total (98.5%). Bitcoin has benefited in recent weeks as the dollar has been rocked by the huge wave of stimulus poured into markets by the US to support its economy amid the pandemic.

All data, figures & charts are valid as of 22/10/2020. All trading carries risk. Only risk capital you can afford to lose.  

This is a marketing communication and should not be taken as investment advice, personal recommendation, or an offer of, or solicitation to buy or sell, any financial instruments. This material has been prepared without having regard to any particular investment objectives or financial situation, and has not been prepared in accordance with the legal and regulatory requirements to promote independent research. Any references to past performance of a financial instrument, index or a packaged investment product are not, and should not be taken as, a reliable indicator of future results. eToro makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared utilizing publicly-available information.

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