Yesterday marked a significant event in the financial world as Tesla, Inc. released its highly anticipated earnings report, which fell short of market expectations. Despite this, the market reaction was unexpected, with Tesla’s stock price surging nearly 10% in after-hours trading.
Now, let’s delve into the broader market analysis, starting with an overview of economic events.
Economic Events:
Today, a high-impact data point is observed on the economic calendar, which is the release of Durable Goods Orders for the month of March. Market pricing forecasts a 2.5% increase compared to the previous month, which is relatively higher. The higher the orders for durable goods, the healthier the economy, as this data precisely reflects the presence or absence of inflationary recession.
Earnings:
The fact that financial markets and prices reflect a weighting of all market participants’ behaviors greatly aids our understanding of market dynamics. Sometimes, many economic data points are already priced into the market. For instance, before the start of the Russia-Ukraine war, stock markets retreated before any news of conflict emerged. In other words, financial markets are anticipatory in nature; they anticipate events in advance.
Last night’s behavior of Tesla after the earnings report largely reflects this behavior. It seemed that Tesla’s dip to a fair price range prior to the earnings report release had already been priced in to some extent. However, it should be noted that the positive outlook for Tesla’s next quarter and subsequent earnings reports did not affect this immediate demand.
Tesla’s first-quarter adjusted earnings per share stood at $0.45, falling short of the estimated $0.52, while its revenue totaled $21.30 billion, missing the $22.3 billion forecast, according to data from Bloomberg. The company experienced a 9% decline in revenue compared to the previous year, marking its first decrease in four years.
In the first quarter, Tesla reported operating profit of $1.2 billion and adjusted net income of $1.5 billion. Both figures failed to meet expectations and represented a decline of over 50% from the same period last year. Regarding delivery guidance, Tesla reiterated its expectation of “notably lower volume,” consistent with the statement made in its Q4 earnings report.
Today, however, the most important earnings reports are related to one of the world’s tech giants, namely Meta, which will be released after the market closes. This company generally controls a significant portion of the market cap, surpassing that of many emerging markets. The estimated revenue for Meta is $36.14 billion, with an estimated EPS of 4.32. This report could heavily impact the famous tech index, especially the Nasdaq.
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Source : Earnings Whispers
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TSLA:
Meta :
Gold (XAUUSD):
Gold continues to be influenced by US monetary policy, with mostly downward fluctuations following the easing of tensions between Iran and Israel. The desired ranges for gold are identified in the chart below.
S&P500:
Yesterday, the S&P 500 index experienced a very good upward momentum due to the performance of the technology sector on one hand and relatively favorable earnings reports on the other hand. However, with the release of earnings reports from Microsoft and Google today, there is an expectation for continued positive movement in this index. Potential resistance levels for this index are indicated in the chart below.
Foreign Exchange Market (FOREX):
Australia’s inflation data was also released during the Asian trading session. Year-on-year, Australia’s inflation ticked up by 0.2%, reaching 3.6%, contrary to market expectations. This development pressures the Reserve Bank of Australia to maintain its interest rates at higher levels for a longer period. Expectations for a rate cut in Australia were pushed back to October, which was relatively delayed. Concerns were also raised at the start of the European trading session, driven by the same factor. The pound was also highly scrutinized during yesterday’s US trading session, largely influenced by discussions surrounding the country’s political and economic situation, notably by Sonak’s remarks.
Source : Babypips
EURAUD:
Bitcoin (BTC):
Bitcoin is influenced by events such as Halving and the valuation of the dollar. However, with global political risks diminishing, attention has shifted to risky markets. There is a possibility of a strong momentum move for this asset class in the final days of this week.
US Crude Oil WTI :
The crucial range for oil finally kicked in, and oil saw demand in the U.S. trading session. Today, the report on U.S. oil inventories will be released. Given the very positive report last week, which led to selling pressure on oil, we should see what impact today’s report will have on the price of black gold.
The MTC team wishes you a great day ahead!
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