ReportWire

Tag: tesla inc

  • Here’s an easy way to make a more concentrated play on the ‘Magnificent Seven’ stocks

    Here’s an easy way to make a more concentrated play on the ‘Magnificent Seven’ stocks

    [ad_1]

    Investors in index funds have been well rewarded by a high concentration in the largest technology companies over the past decade. But there are also continuing warnings about the risk of such heavy concentrations, even in index funds that track the S&P 500. Solutions are offered to limit this risk, but if you expect Big Tech to continue to drive the broad market returns over the coming years, why not make an even more focused bet?

    Comparisons of three index-fund approaches highlight how successful concentration in the “Magnificent Seven” has been.

    The Magnificent Seven are Apple Inc.
    AAPL,
    +0.16%    ,
    Microsoft Corp.
    MSFT,
    +0.72%    ,
    Nvidia Corp.
    NVDA,
    -2.03%    ,
    Amazon.com Inc.
    AMZN,
    +2.17%    ,
    Alphabet Inc.
    GOOGL,
    -0.27%

    GOOG,
    -0.32%    ,
    Tesla Inc.
    TSLA,
    +9.37%
    and Meta Platforms Inc.
    META,
    +1.67%    .
    We have listed them in the order of their concentration within the Invesco S&P 500 ETF Trust
    SPY,
    which tracks the S&P 500
    SPX.
    The U.S. benchmark index is weighted by market capitalization, as is the Nasdaq Composite Index
    COMP
    and the Russell indexes.

    SPY is 27.6% concentrated in the Magnificent Seven. One way to play the same group of 500 stocks but eliminate concentration risk is to take an equal-weighted approach to the index, which has worked well for certain long periods. But here, we’re focusing on how well the concentrated strategy has worked.

    Let’s take a look at the group’s concentration in three popular index approaches, then look at long-term performance and consider what happened in 2022 as rising interest rates helped crush the tech sector.

    Here are the portfolio weightings for the Magnificent Seven in SPY, along with those of the Invesco QQQ Trust
    QQQ,
    which tracks the Nasdaq-100 Index
    NDX
    and the Invesco S&P 500 Top 50 ETF
    XLG
    :

    Company

    		 Ticker

    		 % of SPY

    		 % of QQQ

    		 % of XLG
    Apple Inc.

    		 AAPL,
    +0.16%         		7.05%

    		 10.85%

    		 12.46%
    Microsoft Cor.

    		 MSFT,
    +0.72%         		6.65%

    		 9.53%

    		 11.76%
    Amazon.com Inc.

    		 AMZN,
    +2.17%         		3.30%

    		 5.50%

    		 5.84%
    Nvidia Corp.

    		 NVDA,
    -2.03%         		3.02%

    		 4.44%

    		 5.33%
    Alphabet Inc. Class A

    		 GOOGL,
    -0.27%         		2.17%

    		 3.12%

    		 3.83%
    Alphabet Inc. Class C

    		 GOOG,
    -0.32%         		1.88%

    		 3.11%

    		 3.32%
    Tesla Inc.

    		 TSLA,
    +9.37%         		1.79%

    		 3.10%

    		 3.17%
    Meta Platforms Inc. Class A

    		 META,
    +1.67%         		1.77%

    		 3.60%

    		 3.12%
    Totals

    		  

    		 27.63%

    		 43.25%

    		 48.83%
    Sources: Invesco Ltd., State Street Corp.

    The same group of seven companies (eight stocks with two common share classes for Alphabet) is at the top of each exchange-traded fund’s portfolio, although the top seven for QQQ aren’t in the same order as those for SPY and XLG. QQQ’s weighting was changed recently as the underlying Nasdaq-100 underwent a “special rebalancing” last month.

    Here’s a five-year chart comparing the performance of the three approaches. All returns in this article include reinvested dividends.


    FactSet

    QQQ has been the clear winner for five years, but it is also worth noting how well XLG has performed when compared with SPY. This “top 50” approach to the S&P 500 incorporates many stocks that aren’t listed on the Nasdaq and therefore cannot be included in QQQ, which itself is made up of the largest 100 nonfinancial companies in the full Nasdaq Composite Index
    COMP,
    +0.45%    .

    Examples of stocks held by XLG that aren’t held by QQQ include such non-tech stalwarts as Berkshire Hathaway Inc.
    BRK.B,
    +0.77%    ,
    Johnson & Johnson
    JNJ,
    +0.79%    ,
    Procter & Gamble Co.
    PG,
    +0.94%    ,
    Home Depot Inc.
    HD,
    -0.12%
    and Nike Inc.
    NKE,
    -0.42%    .

    Now let’s go deeper into long-term performance. First, here are the total returns for various time periods:

    ETF

    		 3 Years

    		 5 Years

    		 10 Years

    		 15 Years

    		 20 Years
    SPDR S&P 500 ETF Trust
    SPY     		40%

    		 69%

    		 223%

    		 370%

    		 531%
    Invesco QQQ Trust
    QQQ     		41%

    		 113%

    		 430%

    		 882%

    		 1,158%
    Invesco S&P 500 Top 50 ETF
    XLG     		41%

    		 85%

    		 262%

    		 404%

    		 N/A
    Source: FactSet

    Click on the tickers for more about each ETF, company or index.

    Click here for Tomi Kilgore’s detailed guide to the wealth of information available for free on the MarketWatch quote page.

    There is no 20-year return for XLG because this ETF was established in 2005.

    For five years and longer, QQQ has been the runaway leader, but for 5, 10 and 15 years, XLG has also beaten SPY handily, with broader industry exposure.

    Something else to consider is that during 2022, when SPY was down 18.2%, XLG fell 24.3% and QQQ dropped 32.6%.

    For disciplined long-term investors, the tech pain of 2022 may not seem to have been a small price to pay for outperformance. And it may have been easier to take the pounding when holding SPY or even XLG that year.

    Here’s a look at the average annual returns for the three ETFs:

    ETF

    		 3 years

    		 5 years

    		 10 years

    		 15 years

    		 20 years
    SPDR S&P 500 ETF Trust
    SPY     		11.8%

    		 11.0%

    		 12.4%

    		 10.9%

    		 9.6%
    Invesco QQQ Trust
    QQQ     		12.0%

    		 16.3%

    		 18.2%

    		 16.4%

    		 13.5%
    Invesco S&P 500 Top 50 ETF
    XLG     		12.2%

    		 13.1%

    		 13.7%

    		 11.4%

    		 N/A
    Source: FactSet

    So the question remains — do you believe that the largest technology companies will continue to lead the stock market for the next decade at least? If so, a more concentrated index approach may be for you, provided you can withstand the urge to sell into a declining market, such as the one we experienced last year.

    Here is something else to keep in mind. In a note to clients on Monday, Doug Peta, the chief U.S. investment strategist at BCA, made a fascinating point: “The only novel development is that all the heaviest hitters now hail from Tech and Tech-adjacent sectors and are therefore more prone to move together than they were at the end of 2004, when the seven largest stocks came from six different sectors. “

    Nothing lasts forever. Peta continued by suggesting that investors who are tired of big tech taking all the glory “need only wait.”

    “[I]f history is any guide, their time at the top of the capitalization scale will be short,” he wrote.

    Don’t miss: These four Dow stocks take top prizes for dividend growth

    [ad_2]

    Source link

  • Seat massages, smartphones and driverless features: Automakers turn to tech to take on Tesla

    Seat massages, smartphones and driverless features: Automakers turn to tech to take on Tesla

    [ad_1]

    Amazon was among a number of technology companies at the IAA motor show in Munich. The presence of Amazon, Qualcomm, Samsung and other tech giants underscores how traditional automakers are looking to bolster the tech in their cars.

    Arjun Kharpal | CNBC

    MUNICH — You’d be forgiven for thinking that the IAA, one of the world’s biggest motor shows, is actually a technology conference, after tech giants like Amazon, Qualcomm and Samsung all showed up for this year’s event.

    Their presence underscores demand for traditional automakers to boost the technology in their vehicles, from software to hardware, as they look to catch up with Tesla in the electric car future. Ramping up technology features is also essential to meet buyer expectations in China.

    “Tesla and the Chinese start-ups. This is the two-way force they [traditional automakers] are experiencing, driving them to have more user experience in the car,” Mohit Sharma, automotive research analyst at CCS Insight, told CNBC.

    They can’t do it alone. Carmakers are looking at tech firms for help, while also trying to work on items like software in house.

    Part of Tesla’s global success has come down to its technology in a number of areas, from batteries to Autopilot — its advanced driver assistance system (ADAS), which uses semi-autonomous driving features. The screen within Tesla cars is also akin to that of a smartphone.

    Those features are what rival automakers are trying to build and get ahead on.

    Carmakers are developing their own operating systems

    There are two major operating systems in the smartphone sphere — Google’s Android and Apple’s iOS. That’s not the case in the car world, when it comes to the ever popular infotainment systems and screens.

    Auto firms are now focusing on developing their own operating systems, so that using car screens more closely resembles working with the apps of a smartphone.

    To that end, Mercedes-Benz revealed further details at the IAA about its self-developed operating system called MB.OS, which will help power various features from the giant screen across the dashboard to the voice assistant in its upcoming EVs.

    Swedish EV player Polestar this year created a joint venture with Xingji Meizu — a smartphone maker owned by Chinese auto giant Geely — and plans to launch its own smartphone in December, when the Polestar 4 car begins delivery to customers. Meizu is making an operating system for Polestar cars based on its own product, called FlyMe. The idea is that users would be able to have a seamless experience between the smartphone and Polestar’s operating system in the company’s cars.

    U.S. chipmaker Qualcomm was also in attendance at IAA. The company is making a big push into the automotive space, where its chips can be used to help power artificial intelligence applications within vehicles. One example it showed was a car assistant that could find a recipe for chicken enchiladas and add the ingredients to a shopping list. 

    It’s not just about the screen — automakers are also looking into using all parts of the car to display information. BMW said the Neue Klasse EV models it unveiled on Saturday will have what it calls Panoramic Vision, a heads-up display which projects information on the windscreen at the driver’s eyeline.

    To make the drive as comfortable as possible, U.S. EV maker Lucid showed off the massage feature of the seats in its Air Midnight Dream Edition car.

    Driverless features push

    A big part of the focus of Tesla technology has surrounded its Autopilot ADAS. No car can operate autonomously — at least from a legal perspective — but automakers are ramping up the driverless features and capabilities.

    Tesla is perhaps one of the furthest ahead with its ADAS features, followed by young Chinese players like Xpeng and Nio.

    Xpeng will be entering the German market, Chinese EV-maker's president says

    Tech is key in China

    Many automakers aspire to become major players in the world’s biggest and highly competitive electric vehicle market, China. In a bid to differentiate themselves from rivals, Chinese firms have talked up the tech features of their vehicles, from software to ADAS capabilities — and Chinese customers expect the latest tech perks.

    “It’s not just good enough to bring a great European design to China, you have to be very, very special about what you offer to the market when it comes to software,” Polestar CEO Thomas Ingenlath, told CNBC in an interview Tuesday.

    Heeding that sentiment, foreign companies from BMW to Mercedes are looking to invest heavily in tech development, as they aim to boost EV sales in China.

    Volkswagen CEO Oliver Blume on Wednesday said that the company is ramping up its number of software engineers in China.

    “We want to operate with China speed in China,” Blume said at the IAA conference.

    [ad_2]

    Source link

  • How this aggressive growth fund beat the S&P 500 without Nvidia or Big Tech

    How this aggressive growth fund beat the S&P 500 without Nvidia or Big Tech

    [ad_1]

    [ad_2]

    Source link

  • Elon Musk biographer moves to ‘clarify’ details about Ukraine and Starlink after backlash

    Elon Musk biographer moves to ‘clarify’ details about Ukraine and Starlink after backlash

    [ad_1]

    Elon Musk, Chief Executive Officer of SpaceX and Tesla and owner of Twitter, looks on as he attends the Viva Technology conference dedicated to innovation and startups at the Porte de Versailles exhibition centre in Paris, France, June 16, 2023.

    Gonzalo Fuentes | Reuters

    Author Walter Isaacson took to social media to try to “clarify” an excerpt from his upcoming book, “Elon Musk.” The excerpt received swift backlash after it described how Musk thwarted a Ukrainian attack on Russian warships.

    Isaacson’s book claims that Musk, the CEO of Tesla and SpaceX, ordered engineers to shut off Starlink’s satellite network over Crimea last year in order to disrupt a Ukrainian military initiative. Musk’s Starlink terminals arrived in the early days of Russia’s unprovoked invasion of Ukraine as Western governments worked to supply Kyiv with artillery and air defense systems.

    Musk eventually soured on the arrangement and said “Starlink was not meant to be involved in wars,” according to the book. The tech billionaire told Isaacson he was worried the Ukrainian attack on Russian vessels would provoke the Kremlin into launching a nuclear war. 

    But in a post on X, formerly known as Twitter, late Friday, Isaacson shared new details.

    “To clarify on the Starlink issue: the Ukrainians THOUGHT coverage was enabled all the way to Crimea, but it was not,” Isaacson wrote. “They asked Musk to enable it for their drone sub attack on the Russian fleet. Musk did not enable it, because he thought, probably correctly, that would cause a major war.”

    Crimea is a peninsula on the Black Sea that Russia illegally annexed from Ukraine in 2014, and it is home to Russia’s Black Sea warships. In the days following Russia’s full-scale invasion in February 2022, the Black Sea fleet fired missiles on once-industrious Ukrainian coastal cities while imposing a devastating naval blockade.

    Isaacson went further in a second post on Saturday, saying that said he “mistakenly” thought Musk made the decision to shut off Starlink’s satellite network on the night of the attack.

    “Based on my conversations with Musk, I mistakenly thought the policy to not allow Starlink to be used for an attack on Crimea had been first decided on the night of the Ukrainian attempted sneak attack that night,” Isaacson said. “He now says that the policy had been implemented earlier, but the Ukrainians did not know it, and that night he simply reaffirmed the policy.”

    Isaacson’s X posts came after a top aide to Ukraine President Volodymyr Zelenskyy lashed out at Musk over the excerpt.

    “By not allowing Ukrainian drones to destroy part of the Russian military fleet via Starlink interference, Elon Musk allowed this fleet to fire Kalibr missiles at Ukrainian cities,” Mykhailo Podolyak wrote Thursday on social media after CNN reported on some of the details from Isaacson’s book.

    “As a result, civilians, children are being killed. This is the price of a cocktail of ignorance and big ego,” he added.

    Isaacson’s complete book is slated for release on Tuesday.

    Read the full excerpt about Starlink and Ukraine in the Washington Post.

    — CNBC’s Amanda Macias contributed to this report.

    [ad_2]

    Source link

  • Sorry, Elon, a ‘super app’ is never going to fly in the U.S.

    Sorry, Elon, a ‘super app’ is never going to fly in the U.S.

    [ad_1]

    “Super apps” have never truly existed in the United States, and it is apparent at this point that they never will.

    That isn’t stopping some executives and investment analysts from still dreaming of becoming one-stop shops for their users’ needs, something only a small handful of apps in Asia have managed to do. The most prominent is Elon Musk, the Tesla Inc. TSLAchief executive who purchased Twitter last year and has proclaimed that he will turn it into an “everything app” called X that resembles super apps in China.

    “I…

    [ad_2]

    Source link

  • Chinese electric carmakers ramp up push overseas, setting up clash with U.S., European auto giants

    Chinese electric carmakers ramp up push overseas, setting up clash with U.S., European auto giants

    [ad_1]

    BYD launched the BYD Seal in Europe at the IAA auto show in Munich, Germany. The electric sedan has a starting price of 44,900 euros ($48,479).

    Arjun Kharpal | CNBC

    Munich, GERMANY — The IAA in Munich, Germany is one of Europe’s most high-profile auto shows. And it was dominated by Chinese electric car firms looking to expand their presence on the continent and challenge incumbents from BMW to Ford in the new era of battery-powered vehicles.

    Chinese start-ups and players had some of the biggest stands at the event with high-profile press conferences and vehicle launches, underscoring their intention to make a splash in the European market.

    China, the world’s largest EV market, has seen a tidal wave of electric car companies pop up in the last few years, driven by government subsidies and venture capital funding. But a slowing market at home, due to tepid consumer spending after Covid-19 restrictions were lifted, coupled with an attractive market in Europe, has seen Chinese firms launch cars abroad and expand their footprint.

    “Europe is one of the largest (second after China) mass market vehicle markets … If the Chinese EV makers want to secure a growth path beyond their local market, its very logical to look at Europe,” Daniel Roeska, senior research analyst at Bernstein Research, told CNBC via email.

    Roeska added that Europe, with its “stringent de-facto” ban on combustion engine cars in 2035, “is pushing the market faster towards EVs at a time when most EU brands … do not have a perfect offering yet, making market share gains easier.”

    Many of the European carmakers have been seen lagging in their push into EVs at a time when Chinese players have launched dozens of new vehicles.

    China makes mark in Munich

    The ambitions of Chinese EV firms were on display at the IAA.

    On the morning of the first day, Leapmotor, a Chinese firm headquartered in Hangzhou, announced plans to bring its C10 sports utility vehicle, or SUV, to European markets next year. In the next two years, the company said it plans to introduce five “globally-oriented” products across the world.

    “All of Leapmotor’s subsequent products will be designed and developed with a global mindset and adhere to global standards,” Leapmotor CEO Zhu Jiangming said at a press conference on Monday.

    Chinese EV maker Leapmotor launched its first car for the international markets called the C10.

    Arjun Kharpal | CNBC

    Meanwhile, BYD, the carmaker backed by Warren Buffett, launched its Seal electric sedan for Europe on Monday, starting at 44,900 euros ($48,479). For comparison, in Germany, Tesla’s Model 3, starts at 42,990 euros.

    And there were more announcements about continued expansion into new territories.

    Xpeng said Monday it will expand sales of its cars into the German market in 2024. The company currently sells its P7 sedan and G9 SUV in Norway, Sweden, Denmark and the Netherlands. And Brian Gu, president of Xpeng, said the company plans to bring its latest car, the G6, to Europe next year, underscoring the Guangzhou-headquartered firm’s global push.

    “We recognise Germany is the most important and the highest standard market for all” carmakers, Gu told CNBC in an interview Monday.

    “And to be able to be here and then really made our make our product available to the customers in this market, really will help us further penetrate the continental European market. We have ambitions for broader market coverage internationally.”

    The entrance of Chinese firms into Europe is seen as a threat to big automakers who have been perceived to be moving too slow on EVs.

    Analysts at Bernstein said in a note published in June that if Chinese carmakers enter the market “as per normal,” then incumbents may concede up to 5% market share by 2030. But these new entrants could grab up to 20% market share if their entrance into Europe is more aggressive than expected, they added.

    Price war and rising competition

    But the Chinese companies themselves face rising competition from within, but also outside of their home market. Tesla sparked a price war earlier this year which has put pressure on profits and margins of some of China’s smaller players like Xpeng.

    Meanwhile, to fend of rising competition and catch up with Tesla, BMW and Mercedes both launched a dedicated electric car platform that will underpin their vehicles for the coming years, adding further potential headwinds that are not lost on these Chinese challengers.

    “Well, it is definitely not easy,” Xpeng’s Gu said of the push from traditional carmakers into EVs.

    “I think as a young company, we also are trying to learn from … each step that we take, as well as learn from the competition, the partners that we have. But we have confidence in our technology, we have confidence in our product,” Gu added.

    Chinese automaker BYD had one of the biggest stands at the IAA show in Munich, Germany in 2023.

    Arjun Kharpal | CNBC

    Another challenge for the Chinese firms is building brand recognition, an exercise that could stretch marketing budgets and take a long time to do.

    “Brand is a sizeable issue, but not insurmountable if they can invest for the long-term,” Peter Richardson, vice president at Counterpoint Technology Research, told CNBC via email.

    Richardson said Korean firms Hyundai and Kia were “relatively unknown” in Europe 30 years ago, but “both brands have risen to be significant players.”

    “It takes time and dedication,” Richardson added.

    [ad_2]

    Source link

  • CNBC Daily Open: Why did the unemployment rate and jobs rise in tandem?

    CNBC Daily Open: Why did the unemployment rate and jobs rise in tandem?

    [ad_1]

    A hiring sign is pictured at a McDonald’s restaurant in Garden Grove, California on July 8, 2022.

    Robyn Beck | Afp | Getty Images

    This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

    What you need to know today

    More jobs but higher unemployment
    U.S.     nonfarm payrolls for August increased by 187,000, above the 170,000 estimate. However, the unemployment rate jumped from 3.5% last month to 3.8%, the highest since February 2022. Average hourly earnings increased 4.3% year on year, below the forecast of 4.4%. Combined with the downwardly revised figures for June and July, those are clear signs the U.S. jobs market is slowing.

    Positive outlook for markets
    U.S. stocks cheered the moderate jobs report and mostly inched up Friday, giving major indexes their best week in months. Asia-Pacific markets rose Monday, with Hong Kong’s Hang Seng index popping as much as 2.6%. That’s thanks to Hong Kong-listed property stocks, which surged after creditors allowed Country Garden Holdings to delay payment for an onshore bond.

    Electric vehicle moves
    Tesla shares slid 5% Friday after the company cut prices on its electric vehicles in both the U.S. and China. Meanwhile in Germany, BMW and Mercedes revealed EV concepts, representing their biggest push yet into the EV market. But that might not be enough to stop China’s dominance. Chinese EV companies all delivered enough vehicles in August to keep pace with their third-quarter guidance.

    JPMorgan Chase and Jeffrey Epstein
    JPMorgan Chase notified the U.S. Treasury Department of more than $1 billion in transactions related to “human trafficking” by Jeffrey Epstein, a lawyer for the U.S. Virgin Islands told a federal judge. Those transactions dated back 16 years and were only reported after Epstein was arrested and killed himself in jail in 2019, said Mimi Liu, an attorney for the Virgin Islands.

    [PRO] Slow start to September
    U.S. markets are closed Monday for Labor Day and economic data coming out this week is on the light side. The heavy hitters, like the consumer and producer price indexes, will only be released later in the month. So keep an eye out for these signs that will indicate whether stocks will fall prey to the September seasonality — the month’s historically been the weakest for stocks.

    The bottom line

    The U.S. economy added more jobs than expected in August, but the overall unemployment rate rose. This may sound counterintuitive since it’s natural to assume an increase in the number of jobs will lead unemployment going down. But there’s a simple explanation for that.

    By definition, the unemployment rate is the number of unemployed people (people without a job but are actively looking for one), divided by the labor force (the sum of people both employed and unemployed), expressed as a percentage.  

    If the unemployment rate goes up, that means the proportion of people looking for a job compared with the total labor force has grown. That’s straightforward enough. For the unemployment rate to go up even as there were 187,000 more jobs in August means there were more people who started looking for a job than people who secured one. The implication: The total labor force grew in August. Indeed, 597,000 people without work experience sought employment last month, according to the report.

    A growing labor force is a looser jobs market. That probably contributed to the lower-than-expected wage growth last month. As Bank of America U.S. economist Stephen Juneau wrote, “The broad message here seems to be that we are nearing full employment, with supply and demand coming more into balance.”

    That will come as a relief to Federal Reserve officials worried about a hot jobs market contributing to inflation. Investors, too, cheered the jobs report. They think there’s a 93% chance the Fed will keep rates unchanged at its September meeting and a 65.3% chance at its November meeting, according to the CME FedWatch Tool. That’s up from 80% and 44.5% a week ago, respectively.

    Major indexes rose in response to the jobs report as well. The S&P 500 climbed 0.18% Friday, giving it a 2.5% increase for the week — its best weekly performance since June. The Dow Jones Industrial Average added 0.33% to close 1.4% higher for the week. The Nasdaq Composite was essentially flat, but ended the week up 3.3%. That was both indexes’ best showing since July.

    U.S. markets are closed today, so we’ll have to wait to see if they can sustain this momentum and defy September’s reputation as the worst month for stocks.

    — CNBC’s Jeff Cox contributed to this report

    [ad_2]
    Source link

  • CNBC Daily Open: Why did the unemployment rate rise even as jobs were added?

    CNBC Daily Open: Why did the unemployment rate rise even as jobs were added?

    [ad_1]

    A Chipotle restaurant advertises it is hiring in Cambridge, Massachusetts, August 28, 2023.

    Brian Snyder | Reuters

    This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

    What you need to know today

    More jobs but higher unemployment
    U.S.     nonfarm payrolls for August increased by 187,000, above the 170,000 estimate. However, the unemployment rate jumped from 3.5% last month to 3.8%, the highest since February 2022. Average hourly earnings increased 4.3% year on year, below the forecast of 4.4%. Combined with the downwardly revised figures for June and July, those are clear signs the U.S. jobs market is slowing.

    Winning week for markets
    U.S. stocks cheered the moderate jobs report and mostly inched up Friday, giving major indexes their best week in months. European markets traded mixed. The regional Stoxx 600 closed flat, the U.K.’s FTSE 100 added 0.34% but other major bourses ended the day in the red. For August, the Stoxx 600 lost 2.8%.

    Tesla’s price cut hits shares
    Tesla shares slid 5% after the company cut prices on its electric vehicles in both the U.S. and China. Additionally, the price of Tesla’s Full Self-Driving software, its premium driver assistance option, was reduced by $3,000. CEO Elon Musk previously said the price would only ever go up. Despite the fall, Tesla shares are still up almost 100% this year.

    JPMorgan Chase and Jeffrey Epstein
    JPMorgan Chase notified the U.S. Treasury Department of more than $1 billion in transactions related to “human trafficking” by Jeffrey Epstein, a lawyer for the U.S. Virgin Islands told a federal judge. Those transactions dated back 16 years and were only reported after Epstein was arrested and killed himself in jail in 2019, said Mimi Liu, an attorney for the Virgin Islands.

    [PRO] Slow start to September
    U.S. markets are closed Monday for Labor Day and economic data coming out this week is on the light side. The heavy hitters, like the consumer and producer price indexes, will only be released later in the month. So keep an eye out for these signs that will indicate whether stocks will fall prey to the September seasonality — the month’s historically been the weakest for stocks.

    The bottom line

    The U.S. economy added more jobs than expected in August, but the overall unemployment rate rose. This may sound counterintuitive since it’s natural to assume an increase in the number of jobs will lead unemployment going down. But there’s a simple explanation for that.

    By definition, the unemployment rate is the number of unemployed people (people without a job but are actively looking for one), divided by the labor force (the sum of people both employed and unemployed), expressed as a percentage.  

    If the unemployment rate goes up, that means the proportion of people looking for a job compared with the total labor force has grown. That’s straightforward enough. For the unemployment rate to go up even as there were 187,000 more jobs in August means there were more people who started looking for a job than people who secured one. The implication: The total labor force grew in August.

    A growing labor force is a looser jobs market. That probably contributed to the lower-than-expected wage growth last month. As Bank of America U.S. economist Stephen Juneau wrote, “The broad message here seems to be that we are nearing full employment, with supply and demand coming more into balance.”

    That will come as a relief to Federal Reserve officials worried about a hot jobs market contributing to inflation. Investors, too, cheered the jobs report. They think there’s a 93% chance the Fed will keep rates unchanged at its September meeting and a 65.3% chance at its November meeting, according to the CME FedWatch Tool. That’s up from 80% and 44.5% a week ago, respectively.

    Major indexes rose in response to the jobs report as well. The S&P 500 climbed 0.18% Friday, giving it a 2.5% increase for the week — its best weekly performance since June. The Dow Jones Industrial Average added 0.33% to close 1.4% higher for the week. The Nasdaq Composite was essentially flat, but ended the week up 3.3%. That was both indexes’ best showing since July.

    U.S. markets are closed today, so we’ll have to wait to see if they can sustain this momentum and defy September’s reputation as the worst month for stocks.

    — CNBC’s Jeff Cox contributed to this report

    Correction: This article has been updated to reflect the correct month of the jobs report.

    [ad_2]
    Source link

  • Tesla shares close down 5% after price cuts, Model 3 refresh

    Tesla shares close down 5% after price cuts, Model 3 refresh

    [ad_1]

    A Tesla Model 3 vehicle on an auto carrier in front of a store in Rocklin, California, July 21, 2021.

    David Paul Morris | Bloomberg | Getty Images

    Tesla shares dropped 5% Friday after the electric car company cut prices on some models in the U.S. and reduced the price for its premium driver assistance software.

    The stock closed at $245.01. It’s still up almost 100% this year after gaining 2.7% for the week.

    While Tesla CEO Elon Musk has said in the past that the price of Tesla’s premium driver assistance option, marketed as Full Self-Driving software, would only ever go up, the company cut the price by $3,000 from $15,000 in the U.S. for customers who purchase it upfront rather than through a monthly subscription. Subscribers pay between $99 and $199 per month, depending on whether they’re upgrading from a standard or other premium version.

    Tesla is also cutting prices for inventory vehicles in the U.S., including its entry-level Model 3 sedan, luxury Model S sedan and the Model X SUV. In China, Tesla is reducing the price of the Model S and Model X about 7%.

    The FSD discount follows reports that the National Highway Traffic Safety Administration is nearing completion of a years-long investigation into possible safety defects of Tesla’s driver assistance systems. The investigation began after a string of crashes into stationary first responder vehicles by Tesla drivers who were thought to be using driver assistance features.

    The price cut for some Model X cars in the U.S. makes the SUV eligible for a $7,500 tax break for qualified buyers. However, the price cuts on Model S and X upset some prior customers in the U.S. and in China, who took to social media to complain that the lower price hurts the resale value of their cars and that they’re paying higher insurance costs because their car was more expensive.

    Meanwhile, Tesla’s Model 3 refresh, officially revealed Friday, included controversial changes, such as a “stalkless” turn signal. Drivers of the redesigned Model 3 in China and the EU will need to touch a button on the steering wheel to indicate they’re about to change lanes or turn, and can use park, reverse, neutral and drive controls on the touchscreen in lieu of the left-side stalk. The base Model 3 refresh comes with an approximately 12% higher price tag in China compared to its predecessor.

    Also known as the “highland,” the Model 3 refresh includes a longer-range battery. The Tesla China website says the higher-end version of the Model 3 refresh can travel up to 713 km (443 miles) on a single charge and the base model can travel 606 km (377 miles). The new Model 3 variant also features several design changes, including a touchscreen that allows passengers in the back to adjust comfort settings and entertainment, along with tweaks to the vehicle’s exterior design, with new colors available.

    Due to its pricing, analysts at Bank of America wrote in a note, “We think the impact of the new Model 3 debut on Chinese EV peers should be manageable considering the sedan’s entry price is much high than consumers’ expectation.”

    The analysts said the Model 3’s peers in China include XPeng’s P7, BYD’s Han and Seal and Leapmotor’s C01 electric cars.

    Considering the increased starting price, initial sales volume for the Model 3 refresh in China may not be as high as previously expected, they said. Still, the analysts remain positive on the outlook for the vehicle’s sales this quarter as consumers have been waiting for the upgrade.

    Also this week, Tesla faced reports of new federal probes into the company by the U.S. Securities and Exchange Commission and a Manhattan federal prosecutor about whether it had deliberately misled consumers with its prior EV battery range claims, and improperly used resources to benefit Musk personally.

    Regarding the use of company resources, Musk on Friday denied reports that Tesla had plans to build him a “glass house” near Austin, Texas.

    WATCH: The Chinese EV market is dominated by BYD and Tesla

    Correction: The Model 3 refresh has a haptic turn signal button on the “stalkless” steering wheel and other controls on the touchscreen.

    [ad_2]

    Source link

  • Stocks making the biggest moves midday: Best Buy, Big Lots, Coinbase, Nio and more

    Stocks making the biggest moves midday: Best Buy, Big Lots, Coinbase, Nio and more

    [ad_1]

    Check out the companies making headlines in midday trading.

    Best Buy  — Shares popped nearly 6% after the retailer’s fiscal second-quarter earnings beat on both the top and bottom lines. Adjusted earnings per share came in at $1.22, versus the $1.06 expected from analysts polled by Refintiv. Revenue was $9.58 billion, topping the consensus estimate of $9.52 billion. However, Best Buy lowered the top end of its revenue outlook for the year.

    Big Lots — The discount retailer surged 26.7% after its earnings report came in better than analysts expected. Big Lots lost $3.24 per share, on an adjusted basis, less than the $4.11 forecasted by analysts surveyed by FactSet. Revenue exceeded the consensus estimate of $1.1 billion, coming in at $1.14 billion.

    Coinbase, Marathon Digital, Riot Platforms — Stocks tied to the cryptocurrency industry soared after a court ruled against the Securities and Exchange Commission in a lawsuit about spot bitcoin ETFs. Shares of Coinbase, which is named as a custodial partner in several proposed bitcoin ETFs, jumped 13%. Bitcoin mining stocks also rose, with Marathon Digital surging 24% and Riot Platforms climbing 15%.

    3M — Shares gained 2.6% after the company agreed to settle lawsuits regarding potentially defective U.S. military earplugs for $6.01 billion. The deal had grown into the largest mass tort litigation in U.S. history.

    Heico — The engine and aircraft part maker retreated 3.1%. Despite beating expectations for revenue in the quarter, the company said its operating margin fell when compared with the same quarter a year ago.

    Nio — The Chinese electric vehicle maker slid 5.8% after posting a wider quarterly loss than anticipated. Industry giant Tesla climbed more than 5.4%.

    Nvidia — The artificial intelligence stock rallied 4%, part of a broader ascent among technology stocks in Tuesday’s session. Morgan Stanley reiterated its overweight rating on the stock, noting its strong earnings report last week can be a positive signal for the AI supply chain.

    PDD Holdings — U.S.-listed shares jumped 17.8%. The Chinese e-commerce company beat Wall Street expectations when reporting second-quarter earnings. It noted a positive shift in consumer sentiment during the quarter.

    Oracle — Software giant Oracle climbed 2.9% following an upgrade from UBS to buy from neutral. UBS said the stock could have upside ahead due to tailwinds tied to artificial intelligence.

    AT&T, Verizon — The telecommunication giants each added 2.3% on the back of a Citi upgrade to buy. The firm cited stabilization in the wireless environment and said the stocks’ valuations may be over-discounting potential costs tied to mitigating lead-covered cables.

    Alphabet, General Motors — Google Cloud and General Motors said Tuesday they’re working together to explore artificial intelligence opportunities across the automaker’s business. Following the announcement, shares of Google Cloud’s parent company Alphabet and General Motors rose 3.5% and 0.6%, respectively, during midday trading.

    Catalent — Catalent jumped more than 5% after the biotech company issued a solid revenue outlook and announced a deal with activist investor Elliott Investment Management. For fiscal 2024, Catalent forecasted revenue in the range of $4.30 billion to 4.50 billion, far above the $4.19 billion expected by analysts polled by FactSet. Additionally, Catalent agreed to name four new independent directors to its board, two of whom will be nominated by Elliott. It also agreed to a review of its business and strategy.

    Ginkgo Bioworks — The biotechnology company’s stock popped more than 18% after announcing a five-year cloud and AI partnership with Google Cloud. As part of the deal, Ginkgo Bioworks will work to create new large language models for biology and biosecurity uses. Alphabet shares were last up more than 3%.

    Rockwell Automation — The industrial stock gained nearly 2% after Wells Fargo upgraded the stock to equal weight from underweight. The Wall Street firm said it’s bullish on Rockwell’s earnings growth potential.

    Airbnb — The vacation booking platform climbed 4.8%. Bernstein reiterated its outperform rating and said investors should buy the stock after a recent pullback in share prices.

    Palantir – The software stock surged more than 5%. Bank of America reiterated its buy rating on Palantir, calling the company a “key player” in implementing secure AI despite the recent share pullback.

    Splunk — Shares of the software company added 1.8% on Tuesday after Jefferies named the company a top pick in a Tuesday note. Jefferies said Splunk is now in position to deliver “mid-teens” increases in annual revenue after a management overhaul that began 18 months ago.

    Futu Holdings — The Asian wealth management stock popped 10% following a double-upgrade to buy from underperform by Bank of America. The Wall Street bank said to expect more growth in overseas markets.

    NextEra Energy Partners — The energy stock advanced 3.7% on the back of an upgrade from Raymond James to outperform from market perform. Raymond James said investors should buy the dip on the stock.

    — CNBC’s Sarah Min, Samantha Subin, Yun Li, Hakyung Kim, Michelle Fox, Pia Singh and Jesse Pound contributed reporting

    [ad_2]

    Source link

  • Shares of BYD jump after Chinese EV maker posts 200% surge in first half profit

    Shares of BYD jump after Chinese EV maker posts 200% surge in first half profit

    [ad_1]

    A BYD ATTO 3 is displayed during the British Motor Show at Farnborough International Exhibition Centre on August 17, 2023 in Farnborough, England.

    John Keeble | Getty Images News | Getty Images

    Shares of Chinese automaker BYD listed in China jump more than 5% Tuesday, a day after posting a stellar jump in first half profit.

    Thanks to record deliveries, the Chinese electric car maker on Monday posted a 204.68% jump in net profit for the first half of the year — that’s net earnings of 10.95 billion yuan ($1.50 billion) in the January to June period, compared to 3.59 billion yuan a year earlier.

    Hong-Kong listed shares of the automaker rose 5.6% while stocks in Shenzhen were up as much as 4.75% on Tuesday.

    The strong numbers were mainly attributable to rapid growth in the new energy vehicle business, the firm said in a stock filing.

    Revenue in the first six months increased 72.72%, compared to the first half of 2022, according to the stock filing.

    “If you look at BYD numbers, clearly the top line growth has been very strong, but we are even more impressed by its margins. BYD’s gross margin in the first half was 18%. That’s Tesla’s gross margin,” according to Jiong Shao, Barclays’ China technology analyst.

    China’s top-selling car brand posted its best-ever quarterly sales results. Sales of passenger new energy vehicles in the second quarter were 700,244 units, up about 98% year-on-year, according to the company.

    In comparison, U.S. rival Tesla reported deliveries of 466,140 vehicles globally for the second quarter.

    China is the largest auto market in the world by sales and production. It is also the largest EV market in the world, and a key driver in the push toward electric cars.

    “BYD is targeting mass market where Tesla cannot reach,” said Vivek Vaidya, associate partner at Frost & Sullivan, on CNBC’s “Street Signs Asia” Tuesday.

    “You will see China-made vehicles which will offer significant price advantage over Tesla [with] similar features, stunning looking cars,” said Vaidya.

    Price war

    BYD is under pressure from a price competition among domestic rivals as well as Tesla.

    Elon Musk’s EV-maker slashed the prices of its Model S and Model X in August as the company looked to gain market share amid rising competition in China. The additional cuts came the same month that Tesla dropped prices for its Model Y and Model 3.

    Earlier this year, BYD and its domestic rivals such as Nio and Xpeng also cut prices.

    “The lower price to squeeze out of the weaker players is really a good thing for the health of the industry,” Shao from Barclays told CNBC’s “Squawk Box Asia” on Tuesday.

    “BYD’s operating margin was 5% which is a pretty healthy operating margin and many players in the Chinese EV market even have negative gross margin, let alone operating margin,” Shao said.

    The price cuts come as consumers remain cautious on spending amid a weaker than expected economic recovery in China after strict Covid restrictions were lifted.

    Vaidya of Frost & Sullivan said the brands are lowering prices to get as many of their products into the market as possible.

    “EVs are slightly different than internal combustion engine vehicles. EVs also make money for the OEMs who sell them,” said Vaidya, referring to original equipment manufacturers such as Tesla, in this case.

    Read more about tech and crypto from CNBC Pro

    “When they are running, for example, Tesla has charging points and therefore every mile that is run on Tesla, Tesla gets some money back. So the discounting or the price war that is happening is to get the product out there in the market,” said Vaidya.

    “After that, it will start earning money.”

    Competitive landscape

    [ad_2]

    Source link

  • Google to begin selling maps data to companies building solar products, hopes to generate $100 million in first year

    Google to begin selling maps data to companies building solar products, hopes to generate $100 million in first year

    [ad_1]

    A screenshot of Project Sunroof shows the map data offered by the pilot project, which is meant to help consumers plan solar installations for their homes.

    Screenshot

    Google is planning to license new sets of mapping data to a range of companies to use as they build products around renewable energy, and is hoping generate up to $100 million in its first year, CNBC has learned.

    The company plans to sell access to new APIs (application programming interfaces) with solar and energy information and air quality, according to materials viewed by CNBC.

    Among the new offerings will be a Solar API, which could be used by solar installers like SunRun and Tesla Energy and solar design companies like Aurora Solar, according to a list of example customers viewed by CNBC. Google also sees customer opportunities with real estate companies like Zillow, Redfin, hospitality companies like Marriott Bonvoy, and utilities like PG&E.

    Some of the data from the Solar API will come from a consumer-focused pilot called Project Sunroof, a solar savings calculator that originally launched in 2015. The program allows users to enter their address and to receive estimated solar costs such as electric bill savings and the size of the solar installation they’ll need. It also offers 3D modeling of the roofs of buildings and nearby trees based on Google Maps data. 

    Google plans to sell API access to individual building data, as well as aggregated data for all buildings in a particular city or county, one document states. The company says it has data for over 350 million buildings, according to documents, up significantly from the 60 million buildings it cited for Project Sunroof in 2017.

    One internal document estimates the company’s solar APIs will generate revenue between $90 and $100 million in the first year after launch. There’s also a potential to connect with Google Cloud products down the line, documents state.

    As part of the planned launch, the company is also planning to announce an Air Quality API that will let customers request air quality data, such as pollutants and health-based recommendations for specific locations. It’ll also include digital heat maps of the data and hourly air quality information, as well as air quality history of up to 30 days.

    Google did not immediately respond to a request for comment.

    The latest revenue play comes as the company has been trying to monetize its maps products as it faces pressure to produce revenue amid a broader economic slowdown. While the company is focusing on becoming more efficient, it’s also been investing in newer technologies like generative AI and sustainability — a market it hopes to take advantage of with the Solar API.

    The company currently licenses its mapping API for navigation to companies like Uber, which said in 2019 it paid Google $58 million over there years. Maps API revenue goes toward the company’s cloud segment, which finally turned profitable in the first quarter but has had a rocky path toward trying to compete with market leaders Amazon and Microsoft.

    Google doesn’t break out how much its Maps business makes, but it has historically been one of Google’s most under-monetized products, Morgan Stanley analyst Brian Nowak told CNBC in 2021. At the time, Morgan Stanley had estimated Google Maps would earn $11.1 billion by this year as new travel products and promoted pins began to increase ad revenue.

    The move also comes as the company attempts to streamline its mapping products. In June, CNBC found the company was laying off employees at traffic-reporting app Waze, which it acquired in 2013, and combining it with the Google Maps team.

    [ad_2]

    Source link

  • This EV company has a bigger market cap than Ford or GM. But you may not have heard of it.

    This EV company has a bigger market cap than Ford or GM. But you may not have heard of it.

    [ad_1]

    Shares of electric-vehicle startup VinFast Auto Ltd. have surged since the company went public through a special-purpose acquisition company deal last week, taking its market capitalization to levels well beyond established automakers such as Ford Motor Co. and General Motors Co.

    Shares of low-float company VinFast
    VFS,
    +40.35%
    rose 16.1% Friday, after ending Thursday’s session up 32.3%, sending the company’s market cap to $231.3 billion. In comparison, Ford’s
    F,
    +1.36%
    market cap is $47 billion and GM’s
    GM,
    +0.21%
    is $45.2 billion, according to FactSet data. Rival EV maker Rivian Automotive Inc.
    RIVN,
    +2.19%
    has a market cap of $18.6 billion. However, all of these are dwarfed by Tesla Inc.’s
    TSLA,
    +3.72%
    $730.2 billion market cap.

    In roughly a week, the VinFast stream on Stocktwits, a social platform for investors and traders, has racked up about 3,000 watchers, and message volume is “pretty consistent” throughout the day, Tommy Tranfo, Stocktwits’ head of community, and Tom Bruni, a senior writer for the platform, told MarketWatch Thursday.

    Related: EV startup VinFast may be worth more than Ford or GM, but there’s a catch

    “What everyone is discussing is whether or not the current hype in the stock is warranted given where the business is,” Tranfo and Bruni said in a statement emailed to MarketWatch Thursday, noting the company’s soaring market cap. “That’s despite the underlying business doing less than $1 billion in revenue, having negative cash flow from operations of $1.5 to $2 billion.”


    Uncredited

    In the short term, the stock is trading on momentum and hype, according to Tranfo and Bruni. “But eventually, its business results have to justify the valuation. And as we’ve seen with other startups in the space, it’s easy to say they’re going to accomplish XYZ, but harder to actually execute and produce results,” they said.

    “From the community side: [We] think what we’re paying attention to the most right now is if this hype sticks,” they added.

    Related: Rivian, Lucid and XPeng make the list of 20 EV companies expected to grow sales most quickly through 2025

    The EV maker is a majority-owned affiliate of Vietnamese conglomerate Vingroup, one of the largest publicly traded companies in Vietnam. VinFast said that as of June 30, 2023, the company has delivered close to 19,000 EVs.

    About 99% of VinFast’s shares are controlled by Vingroup chair and VinFast founder Pham Nhat Vuon, making only a small portion available to investors.

    Stocktwits’ Tranfo and Bruni noted that EVs have a good track record of growing strong retail community support. “So there is reason to believe that this momentum could continue, but it may be too early to tell for sure,” they added. “Retail loves the electric-vehicle industry, so the interest is likely to continue regardless of how well the company (and stock) actually perform.”

    Related: Tesla’s stock jumps 7% after Baird highlights Cybertruck, other ‘catalysts’ for the year

    VinFast is importing its vehicles into the U.S. and is also ramping up its North American presence. In July, the company broke ground on an electric-vehicle manufacturing site within the Triangle Innovation Point in Chatham County, N.C. The EV startup says the plant will eventually have the capacity to make 150,000 EVs a year.

    Claudia Assis contributed.

    [ad_2]

    Source link

  • Nvidia tops estimates and says sales will jump 170% this quarter, driven by demand for AI chips

    Nvidia tops estimates and says sales will jump 170% this quarter, driven by demand for AI chips

    [ad_1]

    Nvidia founder, President and CEO Jen-Hsun Huang

    Getty Images

    Nvidia shares climbed 8% in extended trading on Wednesday after the chipmaker beat estimates for the second quarter and issued optimistic guidance for the current period.

    • Earnings: $2.70 per share, adjusted, versus $2.09 per share expected by Refinitiv.
    • Revenue: $13.51 billion versus $11.22 billion expected by Refinitiv.

    Nvidia said it expects third-quarter revenue of about $16 billion, higher than $12.61 billion forecast by Refinitiv. Nvidia’s guidance suggests sales will grow 170% on an annual basis in the current quarter.

    Net income jumped to $6.19 billion, or $2.48 a share, from $656 million, or 26 cents, a year earlier.

    Nvidia’s strong sales and forecast underscore how central the company’s technology has become to the generative AI boom. Nvidia’s A100 and H100 AI chips are needed to build and run AI applications like OpenAI’s ChatGPT and other services that take simple text queries and respond with conversational answers or images.

    Revenue in the second quarter doubled from $6.7 billion a year earlier and increased 88% from the prior period.

    “A new computing era has begun,” Nvidia CEO Jensen Huang said in the press release. “Companies worldwide are transitioning from general-purpose to accelerated computing and generative AI.”

    The stock moved higher on Wednesday after finance chief Colette Kress said that the company would not be immediately affected by proposed Biden administration export restrictions on chips.

    “Given the strength of demand for our products worldwide, we do not anticipate that additional export restrictions on our data center GPUs if adopted would have an immediate material impact to our financial results,” Kress said on a call with analysts.

    Even before Wednesday’s report, Nvidia’s stock price had more than tripled for the year, making it the top performer in the S&P 500. It jumped past $507 after hours, a level that would mark a record if it closes there on Thursday. Its prior closing high was $474.94 on July 18.

    Nvidia’s performance was driven by its data center business, which includes AI chips, as cloud service providers and large consumer internet companies like Alphabet, Amazon and Meta snapped up next-generation processors. The company reported $10.32 billion in revenue for the group, up 171% on an annual basis and above the $8.03 billion estimate, according to StreetAccount.

    Nvidia added that it saw its adjusted gross margin increase 25.3 percentage points to 71.2%, because of growth in data center sales, which are more profitable.

    Nvidia’s gaming division, which used to be its core business, saw revenue increase 22% from a year earlier to $2.49 billion, topping the $2.38 billion average estimate.

    Nvidia also makes chips for high-end graphics applications. That business shrank 24% year-over-year to $379 million. It reported $253 million in automotive revenue, which grew 15% on an annual basis.

    Nvidia said its board of directors authorized $25 billion in share buybacks. It said it had purchased $3.28 billion in shares during the quarter.

    Executives will discuss the results on a call with analysts at 5 p.m. ET.

    WATCH: Nvidia earnings could move index away from seasonally weak period

    [ad_2]

    Source link

  • CNBC Daily Open: Rising yields couldn’t stifle excitement over Nvidia

    CNBC Daily Open: Rising yields couldn’t stifle excitement over Nvidia

    [ad_1]

    A sign is posted at the Nvidia headquarters in Santa Clara, California, May 25, 2022.

    Justin Sullivan | Getty Images

    This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

    What you need to know today

    Tech rallied amid rising yields
    The     Nasdaq Composite rallied Monday, breaking a four-day losing streak, even as the 10-year U.S. Treasury yield hit 4.342%, a decades-long high. Asia-Pacific markets mostly rose. Japan’s Nikkei 225 climbed around 0.9%. The index was lifted by SoftBank shares rising 1.57% on the news that its chip unit Arm has filed for a Nasdaq listing.

    Nasdaq listing for Arm
    Arm filed for a Nasdaq listing Monday. The U.K.-based company didn’t provide a projected share price, so its valuation is still unknown. (Japan’s Softbank bought Arm in 2016 for $32 billion.) Arm’s chip designs are found in nearly all smartphones, making it one of the most important companies in the chip industry — and a big deal for the initial public offerings market.

    S&P cuts credit ratings of banks
    S&P Global downgraded the credit ratings of several U.S. banks Monday. The ratings of Associated Banc-Corp and Valley National Bancorp were cut because of funding risks and a higher reliance on brokered deposits, while that of UMB Financial Corp, Comerica Bank and Keycorp were downgraded because of large deposit outflows and interest rates remaining high.

    Ingredients for food inflation in Asia
    Rice prices surged to their highest in almost 12 years after India banned the export of non-basmati white rice in July. Now, India, the world’s largest exporter of onions, is adding a 40% export tax to the allium. “What seems to be clear is that food price volatility will continue in coming months,” an analyst said.

    [PRO] 10% fall in the Stoxx 600?
    Europe’s regional Stoxx 600 index currently at 448.66 — but UBS thinks the index will drop 10% to 410 by the end of this year. These are the stocks that will drag the index down because of their high volatility and negative earnings revisions, according to the Swiss bank.

    The bottom line

    Yields on U.S. Treasurys continued marching higher, with the benchmark 10-year yield closing at 4.342%, a level not seen since November 2007. The 2-year yield added over 6 basis points to breach the 5% barrier, trading at 5.007%.

    “Typically spikes in Treasury yields expose other areas of weakness,” said Megan Horneman, chief investment officer at Verdence Capital Advisors. “This is a risk to tech stocks and growth stocks with high PE multiples.”

    It’s true technology stocks are sensitive to a high interest rate environment because their value rests on future earnings. Despite that, tech rallied, making their gains even more striking. The tech-heavy Nasdaq Composite snapped a four-day losing streak to advance 1.6%, its biggest one-day increase since July 28 when it added 1.9%. The S&P 500 tech sector gained 2.26%, helping to push the broader index up 0.69%. However, the Dow Jones Industrial Average slipped 0.11%.

    “We’re seeing a positive return in the stock market, [which] we didn’t see last week. We think rates are going to be higher for longer and maybe the stock market’s okay with it,” Katy Kaminski, chief market strategist at AlphaSimplex, told CNBC.

    Some individual stock movements of note: Tesla popped 7.33%, Meta rose 2.35% and Nvidia jumped 8.3%. Investors are anticipating Nvidia’s earnings report, which comes out Wednesday after the bell. It’s a crucial moment when we’ll find out whether Nvidia’s revenue forecast — which was 50% higher than Wall Street estimates — comes to fruition.

    If it does, expect another surge in its stock and other AI-related firms. More importantly, Nvidia’s report might sway market sentiment again, as it did in May when the chipmaker changed the narrative from woes around inflation and recession to optimism and enthusiasm over AI. Some excitement is exactly what the market needs in a sluggish August.

    [ad_2]
    Source link

  • Tesla begins notifying workers who were affected by data breach | CNN Business

    Tesla begins notifying workers who were affected by data breach | CNN Business

    [ad_1]


    New York
    CNN
     — 

    Tesla has begun notifying current and former employees whose information was included in a confidential data breach in May.

    In a notice posted on the Maine Attorney General’s website on Friday, Tesla

    (TSLA)     said an investigation had found “two former Tesla

    (TSLA)     employees misappropriated the information in violation of Tesla

    (TSLA)    ’s IT security and data protection policies” and that the electric automaker had since filed lawsuits against them.

    “These lawsuits resulted in the seizure of the former employees’ electronic devices that were believed to have contained the Tesla information,” Tesla said. The company added that it “also obtained court orders that prohibit the former employees from further use, access, or dissemination of the data, subject to criminal penalties.”

    Tesla said that two former employees had shared the confidential data with German newspaper Handelsblatt. The outlet assured Tesla that it won’t publish the information and that it is “legally prohibited from using it inappropriately,” according to the notice.

    Tesla emphasized that it had not detected any misuse of personal data, but has offered complimentary membership to Experian IdentityWorks’ credit monitoring and identity theft service. The membership will be one or two years, depending on the person and the specific engagement number on the letter they receive.

    The data breach affected 75,735 people, and involved Social Security numbers, names and addresses, according to Maine Attorney’s General Office.

    CNN has reached out to Tesla for comment.

    [ad_2]

    Source link

  • Elon Musk says users on X, formerly Twitter, will lose ability to block unwanted followers, eliminating key safety feature

    Elon Musk says users on X, formerly Twitter, will lose ability to block unwanted followers, eliminating key safety feature

    [ad_1]

    Harun Ozalp | Anadolu Agency | Getty Images

    Users of X, formerly known as Twitter, will no longer be able to block comments from unwanted followers, according to a post by X owner Elon Musk on Friday, eliminating what’s long been viewed as a key safety feature. Blocking will only be available for direct messages, he said.

    “Block is going to be deleted as a ‘feature’, except for DMs,” Musk wrote Friday. He was responding to a post from the account of Tesla Owners Silicon Valley, asking, “Is there ever a reason to block vs mute someone?” The group behind that account promotes the electric car company, where Musk is CEO.

    Since acquiring Twitter last year for $44 billion, Musk has overhauled the company, laying off many employees, reinstating previously banned accounts and recently rebranding the company and platform as X. He didn’t provide a reason or a time frame for eliminating the block function, only saying in a follow-up response that “it makes no sense” and that the mute function will still be available.

    Users have been able to use the block function to make sure that hateful content and harassment doesn’t show up in their feed in response to their posts. The mute feature just keeps the individual user from seeing the undesired responses, but doesn’t eliminate them from others’ feeds.

    Twitter users have also long employed the block feature in boycotts and to avoid seeing ads from specific brands or promoters on the platform.

    Binance CEO Changpeng Zhao, an investor in the new Twitter alongside Musk, said in a post that the company should focus its attention elsewhere.

    “X should really solve the bots & spam problems before removing blocks,” wrote Zhao, whose company owns one of the world’s largest crypto exchanges. “Just my 0.02.”

    Louis Jones, a longtime media and advertising executive who now works at the Brand Safety Institute, said Musk’s latest plan is very concerning as users could be inundated with spam, threats and other harmful content.

    Musk’s “lax approach to free speech,” is likely to have a “double effect,” making bullying more common on the platform and inhibiting free speech by those users who are targets of bullies and predators, Jones wrote in an email to CNBC. “It’s a downward spiral that cannot be good for the long term success of X.”

    — CNBC’s Lora Kolodny contributed to this report.

    WATCH: Elon Musk is posting incessantly to distract focus from his business

    [ad_2]

    Source link

  • ‘Magnificent Seven’ stocks are losing some of their shine, but their bonds are doing fine

    ‘Magnificent Seven’ stocks are losing some of their shine, but their bonds are doing fine

    [ad_1]

    The so-called Magnificent Seven grouping of technology stocks lost some of its luster this week after four of the seven moved into correction territory, meaning their stocks have fallen at least 10% from their recent peaks.

    The corporate-bond market, in contrast, seems to like all seven names.

    The group is made up of Facebook parent Meta Platforms Inc.
    META,
    -0.65%    ,
    Apple Inc.
    AAPL,
    +0.28%    ,
    Microsoft Corp.
    MSFT,
    -0.13%    ,
    Nvidia Corp.
    NVDA,
    -0.10%    ,
    Amazon. com Inc.
    AMZN,
    -0.57%    ,
    Google parent Alphabet Inc.
    GOOGL,
    -1.89%

    GOOG,
    -1.80%
    and Tesla Inc.
    TSLA,
    -1.70%    .

    One caveat: Tesla has no outstanding bonds. In the past, the electric-car maker issued convertible bonds, but they have all been converted into equity.

    The group is credited with helping drive the stock market’s gains in the first half of the year, driven by excitement about artificial intelligence. But the rally has stalled in recent weeks as investors have fretted over the potential for U.S. interest-rate increases, surging Treasury yields and China worries, with property developer Evergrande filing for U.S. bankruptcy protection late Thursday.

    On Thursday, Meta followed Apple, Microsoft and Nvidia into correction territory, as MarketWatch’s Emily Bary reported. Tesla, meanwhile, is in a bear market, meaning it’s down more than 20% from its recent peak.

    Read: Have AI stocks like Nvidia reached bubble territory? Here’s what history can tell us.

    The following series of charts from data-solutions provider BondCliQ Media Services show how many bonds each company has issued by maturity and how they have traded as the stocks have pulled back.

    The first chart shows that Microsoft has by far the most bonds, mostly in the 30-year bucket. The software and cloud giant has more than $50 billion in long-term debt, according to its 2023 10-K filing with the Securities and Exchange Commission.

    Outstanding Magnificent Seven debt by maturity bucket.


    Source: BondCliQ Media Services

    This chart shows trading volumes over the last 10 days, divided by trade type. The green shows customer buying, while the red is customer selling. The blue shows dealer-to-dealer flows. Microsoft, for example, has seen almost $1.3 billion in customer buying from dealers in the last 10 days and $960 million in customer sales to dealers.

    Magnificent Seven debt trading volumes (last 10 days).


    Source: BondCliQ Media Services

    This chart shows that every name in the group has enjoyed better net buying in the last 10 days, with Microsoft leading the way.

    Net customer flow of Magnificent Seven debt (last 10 days).


    Source: BondCliQ Media Services

    This chart shows spread performance over the last 50 days for an intermediate-term bond from each of the seven issuers. Most have tightened or remained steady over the period.

    Historical spread performance of Magnificent Seven debt.


    Source: BondCliQ Media Services

    Read also: Red flags waving for tech stocks as AI bounce fades, China fears escalate

    Apple’s stock entered correction Wednesday upon falling more than 10% from its July 31 peak of $196.45. The company sells mainly discretionary products, and right now “consumers are still being pinched” and thinking more carefully about where they spend their money, according to Matt Stucky, senior portfolio manager for equities at Northwestern Mutual Wealth Management.

    [ad_2]

    Source link

  • Tesla stock falls 3%, on to longest losing run since December

    Tesla stock falls 3%, on to longest losing run since December

    [ad_1]

    Tesla Inc.’s stock
    TSLA,
    -1.70%
    dropped another 3% on Friday, extending its losses to a sixth straight session, its worst streak since a seven-session losing run in December. The stock is also poised to close at its lowest since June 2, when it closed at $213.97. It held on to its outperformance over the broader market, however, up 73% in the year to date compared with an advance of 14% for the S&P 500 index
    SPX,
    -0.01%    .
    Tesla earlier this week announced cheaper versions of its Model S and Model X luxury EVs.

    [ad_2]

    Source link

  • Tesla cuts Model S and X prices by over 6% in China | CNN Business

    Tesla cuts Model S and X prices by over 6% in China | CNN Business

    [ad_1]


    Beijing
    Reuters
     — 

    Tesla has cut prices for its existing inventories of its premium Model S and Model X cars in China by as much as 6.9%, it said on Wednesday.

    A post from the carmaker on social media platform Weibo showed the price of the Model S cut by 6.7% to 754,900 yuan ($103,477.58) from 808,900 yuan earlier.

    The Model X now starts from 836,900 yuan, down 6.9% from 898,900 yuan earlier.

    Tesla

    (TSLA)     on Monday said it cut prices in China for its Model Y’s long-range and performance versions starting on August 14, which triggered concerns around its profit margins.

    The moves come after sales of Tesla’s China-made vehicles fell 31% in July from June, their first month-on-month decline since December, as the automaker idled some production to prepare for a revamped Model 3 launch.

    By contrast, China’s BYD

    (BYDDF)    increased sales from June.

    [ad_2]

    Source link