Earnings results weigh on Wall Street: Tesla down 10%

Stocks dropped Thursday as Wall Street reacted to a mixed bag of corporate earnings, including disappointing results from Tesla. Investors also assessed fresh data that signalled a contracting economy.

So far this earnings season, about 16 per cent of companies in the S&P 500 have reported results, with about 76 per cent beating EPS expectations, according to FactSet data as of Thursday. Many on Wall Street this season are bracing for an earnings decline. A general lack of profit forecasts, however, has begun to concern some investors.

All the major averages are on track for a week of losses, and their worst weekly performances since March.

The Nasdaq Composite tumbled 0.8 per cent to settle at 12,059.56. The Dow Jones Industrial Average lost 110.39 points, or 0.33 per cent, to close at 33,786.62, while the S&P 500 lost 0.6 per cent to finish at 4,129.79.

The mounting concern over downward pressure on profit margins hurt Tesla shares as the electric vehicle maker cut prices on some of its cars during the recent quarterly period. The company posted a more than 20 per cent decline in net income from a year ago after the bell Wednesday. Shares fell about 10 per cent.

Other technology stocks showed signs of weakness. Nvidia, Microsoft, Meta Platforms and Apple all finished lower. Seagate Technology shares lost more than 9 per cent after missing estimates and issuing disappointing guidance, citing weak demand.

The real test may come next week as earnings season ramps up with a slate of results from big technology companies

Fox News’s $A1.2b million payout to settle wide-ranging defamation claims by Dominion Voting Systems is still the talk of the town but more evidence suggests that the eye-popping number— might not be as costly to Rupert Murdoch’s media empire as it might seem. Fox’s stock has barely budged since the deal was announced on Tuesday. And the reason?
Fox can take a tax deduction from the settlement, US tax law allows companies to write off at least some portion of settlement fees as part of the cost of doing business.

Across the sectors, the Energy sector was an area of market weakness as oil prices declined 2 per cent. Some laggards included APA, Marathon Oil and Phillips 66.

In commodity news, the Silver Institute stated that the silver market is facing a huge supply deficit as the global demand for silver rose by 18 per cent in 2022 to a record high of 1.24B ounces. The Institute is also predicting a further undersupply of 142.1M ounces in 2023.

Futures

The SPI futures are pointing to a 0.5 per cent fall.

Currency

One Australian dollar at 7:10 AM is buying 67.42 US cents..

Commodities

Iron ore futures are pointing to a 2.6 per cent fall.

Gold gained 0.45 per cent. Silver added 0.02 per cent. Copper fell 1.37 per cent and oil dropped 2.36 per cent.

Figures around the globe

Across the Atlantic, European markets closed mixed. London’s FTSE added 0.05 per cent, Frankfurt lost 0.62 per cent while Paris closed 0.14 per cent lower.

In Asian markets, Tokyo’s Nikkei gained 0.18 per cent, Hong Kong’s Hang Seng added 0.14 per cent and China’s Shanghai Composite closed 0.09 per cent lower.

Yesterday, the Australian sharemarket closed 0.05 per cent lower at 7362.

Ex-dividends

MFF Capital Investments (ASX:MFF) is paying 4.5 cents fully franked

Dividends payable

ARB Corp (ASX:ARB)
BSP Financial Group (ASX:BFL)
Charter Hall Social Infrastructure REIT (ASX:CQE)
CI Resources (ASX:CII)
Eildon Capital Group (ASX:EDC)
Gowing Brothers Ltd (ASX:GOW)
Horizon Oil (ASX:HZN)
Mayfield Childcare (ASX:MFD)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

Disclaimer

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