- FTSE 100 up at the open
- Tech stocks lead US equities downwards
- Tesla beat Q3 earning estimates
- 8.7% organic growth for London Stock Exchange Group in Q3
- Mike Ashley looks to take control of embattled boohoo
- Brent Crude up to nearly $76 per barrel
Derren Nathan, head of equity research, Hargreaves Lansdown:
“The FTSE 100 has opened up this morning on what’s set to be a busy day for corporate news on the London market.
This will follow the worst day in six weeks for US stocks, where rising Treasury yields are pouring cold water on hopes of more aggressive rate cuts by the Fed. If today’s initial jobless claims come in much below consensus forecasts of 242,000, that could send a further signal to rate setters not to overdo it on the loosening front.
Nvidia, Amazon, Apple and Microsoft, and Tesla all lost ground. However, the electric carmaker rebounded strongly in after-hours trading, after topping analyst estimates. There’s more from Hargreaves Lansdown’s resident expert Matt Britzman further down.
Online fashion retailer boohoo has received an open letter from its largest shareholder Frasers. This follows a weak trading update by boohoo and the resignation of its CEO. Frasers has requisitioned an AGM to appoint controversial founder Mike Ashleigh as a replacement in the top spot and expressed deep frustration at boohoo’s willingness to engage in the face of “continued value destruction”. Expect some tense discussions ahead.
London Stock Exchange Group’s third quarter trading update showed again that the group has many more strings to its bow than its primary equity market of the same name. That said, Capital Markets saw the strongest growth with underlying growth of 25% driven by a stellar performance in fixed income. But all divisions contributed to 8.7% organic growth seen on the top line, with subscription revenues in double digit territory. The product timetable from the Microsoft partnership is intact with this data rich environment ripe for AI to create value for end users and shareholders alike.
Brent crude prices have been rebounding strongly and now sit at close to $76. A higher-than-expected increase in US inventories hasn’t been enough to offset uncertainty in the Middle East where further strikes on Beirut and Tel-Aviv highlight the challenges US Secretary of State has to scale if he is to broker a ceasefire on his visit to the region in the face of continued value destruction.”
Matt Britzman, senior equity analyst, Hargreaves Lansdown:
“Tesla shares are popping in after-hours trading after profit came in better than expected, despite a slight miss on the top line. The fear going into results was that the huge incentives effort to push volumes into the tough EV market would materially dent margins – that doesn’t look the be the case.
The outlook for “slight” vehicle growth next year points to how tough the environment is. But Tesla’s European competition is having an even harder time, and it’s the Chinese names that pose the most threat. But even in the land of the dragon, Tesla is still the name consumers opt for when it falls into their price bracket.
The affordable model and refreshed version of the Model Y are critical for expanding the addressable market and driving the next wave of scale for Tesla’s auto business. Given there was no mention at the Robotaxi event, many had feared the affordable model was delayed or even being scrapped. Some of the immediate gains we’re seeing in the stock will most definitely be driven by comments that point to more affordable models coming next year.
Outside the auto business, there was a lot to like. Energy deployment was down on the past quarter but up significantly on last year and we know it’s a lumpy business by nature. Full self-driving miles continue to ramp and the significant investment in building out its compute capacity is key to unlocking unsupervised full driving, the next evolution to Tesla’s product lineup.”
Matt Britzman holds shares in Tesla.
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