The list below shows the most important earnings releases this week. The ones marked with bold red font indicates those stocks we guess have the biggest potential impact on sentiment in equity markets or provide valuable insights for macroeconomic analysis.
- Tuesday: Verizon Communications, Microsoft, LVMH, Texas Instruments, Starbucks, AMD, J&J, Novartis, NextEra Energy, Raytheon Technologies
- Wednesday: AT&T, Apple, Tesla, Facebook, ServiceNow, Abbott Laboratories, Boeing
- Thursday:Visa, Mastercard, Comcast, Danaher, McDonald’s
- Friday: Keyence, Caterpillar, Charter Communications, Eli Lilly, Chevron, SAP, Honeywell
Today’s earnings preview will focus on Tesla (see below) but there are four other stocks that are important to watch as well. Microsoft, Apple, and Facebook are together around 13.5% of the S&P 500 and will thus have enormous impact on the index. Intel reported strong earnings and revenue growth in its datacenter business which should bode well for Microsoft which will also enjoy tailwind from the ongoing work-from-home trend. Apple will most likely show strong results due to the holiday in Q4 and publish a strong outlook given the indications we have got from the company’s supply chain. NextEra Energy reporting tomorrow will also be interesting to watch as the green transformation theme is still in high demand among investors.
EV scarcity will likely insulate Tesla for now
Tesla has been on fire the past year up 687% catapulting the stock into the S&P 500 back in December and becoming the fifth largest index member. Pure electric vehicle producers such as Tesla, NIO, and XPeng have enjoyed strong demand and interest from investors pushing valuations to levels many analysts and traditional institutional investors have difficulties justifying. We are in the process of updating our green transformation equity basket and will soon launch it as a basket with performance updates. During this process it has become clear that within the green transformation but also the transition to EVs there are only three real pure plays with Tesla being in the leading position. As long as the other carmakers derive the majority of their revenue from internal combustion engine cars investors will likely continue to support Tesla’s valuation. It is simply a question of scarcity in terms of betting on the transition to EVs. This will insulate Tesla for some time against disappointments.