Erik Schafhauser Zürich

Morning Brew April 25 2024

Morning Brew 1 minute to read
Erik
Erik Schafhauser

Senior Relationship Manager

Summary:  Meta-Miss despite beating expectations


Good morning,

Meta did the opposite of Tesla, it beat the headline analyst expectation but the outlook disappointed. In late trading, Meta suffered a loss from 493 to 418 – app USD 200bio.

With Microsoft and Alphabet reporting earnings today, expect a lot of nervousness in Tech stocks. Nvidia lost 3.3% yesterday and is not down 15% on the month. Tesla held on to a good deal of the after earning gains

Peter wrote on the outlook: The status of Tesla:

  • Tesla's net financial remains strong.
  • Musk delivered the exact showmanship that was needed to flip the narrative from the company’s worst quarter in more than a decade into investors believing in the future. He was successful in convincing investors that growth is coming, sending the company’s shares up 13% in extended trading.
  • Musk tries desperately to maintain Tesla’s status as a technology company with the introduction of the “cybercab”. But the reality is that self-driving cars are almost impossible to deliver with current technology, and his previous forecasts about this have been horribly wrong.
  • Tesla is under immense pressure from falling demand and intense price competition in the electric vehicle industry. That will not change any time soon, and Tesla is in for some rough quarters.
  • Tesla’s latest price reduction, which came as late as last week, will continue to eat into revenue and margins in Q2.
  • The 10% layoff announcement earlier in April is a sign of crisis, especially if it is to be believed that Musk argued for slashing 20% instead.
  • Tesla’s results and stock performance in 2024 underscore that we cannot talk about the Magnificent 7 any longer, but rather the 6-Pack (Nvidia, Microsoft, Alphabet, Meta, Apple, and Amazon).
  • The biggest outstanding question is whether there is any meaningful moat in EVs. Maybe James Dyson was right in 2019 when he ditched the EV market saying “they’re simply too easy to make”. If there is no moat, then Tesla’s valuation will be difficult to defend.

This morning, Deutsche Bank and BNP surprised with better than expected results, Sanofi and Nestle miss. Toyota global sales rose 7.3% to 10.31 million units surpassing the 10 million mark for the first time.

Indexes went out of trading little changed yesterday, today the US 500 is at 5036, the US 30 38375, US Tech 100 NAS 17304. The Japan 225 lost to trade at 37622 and the GER40 18026.

US 10 Year yields are slightly higher at 4.64, the USD Index is little changed, but the individual components moved a good deal. EURUSD rose to above 1.07 to 1.0710 while GBPUSD 1.2470. USDJPY soared through the 155 to now trade 155.70. With the Bank of Japan meeting today and tomorrow, there is a lot of pf pressure for them to take some action. The Time of the Japanese rate decision is never set in advance, it will be some time tomorrow in the European morning most likely. The current expectation for the Bank of Japan is no action at this meeting but rate increases amounting to 25 bps by year end. Also worth noting is that CNHJPY is at the highest level I can find.

Gold and Silver are above support at 2317 and 27.15.

Overall risk sentiment seems a bit shaky with lots of nervousness that big tech can justify the current levels.

Key items up today are the the Turkey rate decision if you are into EM currencies, the US GDP and earnings with severe risk of interventions in China and Japan

Thursday

- Data Turkey Rate Decision, US Initial Jobless Claims, GDP Advance
- Earnings: American Airlines, Caterpillar, AstraZeneca, Microsoft, Alphabet, Intel, Snap, Roku, T-Mobile, Gilead

Friday
- Data US PCE
- Earnings: Exxon Mobil, Chevron, Colgate Palmolive,

 

Quarterly Outlook

01 /

  • Upending the global order at blinding speed

    Quarterly Outlook

    Upending the global order at blinding speed

    John J. Hardy

    Global Head of Macro Strategy

    We are witnessing a once-in-a-lifetime shredding of the global order. As the new order takes shape, ...
  • Equity outlook: The high cost of global fragmentation for US portfolios

    Quarterly Outlook

    Equity outlook: The high cost of global fragmentation for US portfolios

    Charu Chanana

    Chief Investment Strategist

  • Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever

    Quarterly Outlook

    Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever

    Jacob Falkencrone

    Global Head of Investment Strategy

  • Commodity Outlook: Commodities rally despite global uncertainty

    Quarterly Outlook

    Commodity Outlook: Commodities rally despite global uncertainty

    Ole Hansen

    Head of Commodity Strategy

  • Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    Quarterly Outlook

    Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    John J. Hardy

    Global Head of Macro Strategy

  • Equity Outlook: The ride just got rougher

    Quarterly Outlook

    Equity Outlook: The ride just got rougher

    Charu Chanana

    Chief Investment Strategist

  • China Outlook: The choice between retaliation or de-escalation

    Quarterly Outlook

    China Outlook: The choice between retaliation or de-escalation

    Charu Chanana

    Chief Investment Strategist

  • Commodity Outlook: A bumpy road ahead calls for diversification

    Quarterly Outlook

    Commodity Outlook: A bumpy road ahead calls for diversification

    Ole Hansen

    Head of Commodity Strategy

  • FX outlook: Tariffs drive USD strength, until...?

    Quarterly Outlook

    FX outlook: Tariffs drive USD strength, until...?

    John J. Hardy

    Global Head of Macro Strategy

  • Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Quarterly Outlook

    Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Althea Spinozzi

    Head of Fixed Income Strategy

Content disclaimer

None of the information provided on this website constitutes an offer, solicitation, or endorsement to buy or sell any financial instrument, nor is it financial, investment, or trading advice. Saxo Bank A/S and its entities within the Saxo Bank Group provide execution-only services, with all trades and investments based on self-directed decisions. Analysis, research, and educational content is for informational purposes only and should not be considered advice nor a recommendation.

Saxo’s content may reflect the personal views of the author, which are subject to change without notice. Mentions of specific financial products are for illustrative purposes only and may serve to clarify financial literacy topics. Content classified as investment research is marketing material and does not meet legal requirements for independent research.

Before making any investment decisions, you should assess your own financial situation, needs, and objectives, and consider seeking independent professional advice. Saxo does not guarantee the accuracy or completeness of any information provided and assumes no liability for any errors, omissions, losses, or damages resulting from the use of this information.

Please refer to our full disclaimer and notification on non-independent investment research for more details.

Saxo Bank A/S (Headquarters)
Philip Heymans Alle 15
2900 Hellerup
Denmark

Contact Saxo

Select region

International
International

All trading and investing comes with risk, including but not limited to the potential to lose your entire invested amount.

Information on our international website (as selected from the globe drop-down) can be accessed worldwide and relates to Saxo Bank A/S as the parent company of the Saxo Bank Group. Any mention of the Saxo Bank Group refers to the overall organisation, including subsidiaries and branches under Saxo Bank A/S. Client agreements are made with the relevant Saxo entity based on your country of residence and are governed by the applicable laws of that entity's jurisdiction.

Apple and the Apple logo are trademarks of Apple Inc., registered in the US and other countries. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.