Global Macro & Earnings Update - $TSLA $MSFT $GOOGL $HSBC

Okay, very good morning to you. Hope you're doing well. It's Tuesday, 27th of April, and gonna get you up to speed on a couple of things. As you can see here, Tesla shares were down about 2.5% after market yesterday following their earnings, so I'll get up to speed with some of the details there. Otherwise, we had a record close on Wall Street for the S&P 500, and in fact, 7 of the 11 S&P 500 sectors were higher, and that was mainly led by energy shares. And just quickly moving over to the charts momentarily here, energy prices— WTI crude futures continuing to just grind up yesterday and this morning, find themselves up 64 cents at $62.55. So WTI remains supportive for the time being with equities up at around these record levels, both the S&P and the NASDAQ. Um, As a reminder, this week is particularly busy, of course, with corporate earnings, not just Tesla. We've got the likes of Microsoft and Google, and I want to get you up to speed on what to expect from them as well. Companies reporting this week constitute about 40% of the S&P 500's market capitalization, running through from— who are reporting from Tuesday through to Thursday of this week. And of course, not just MSFT and Google, we've also got Apple and Facebook this week. As well as Amazon as well. So lots to, to go at. So far we've had a quarter of the constituents of the S&P 500 report, and by the numbers, 84% of them have exceeded expectations. And obviously a lot of these numbers were expected to accelerate just given the kind of removal out of the post-pandemic kind of period, but they've even exceeded those margins by 84% if we're looking at who've reported so far. Otherwise, just looking at the, the general sentiment this morning, And there's been a couple of other things, the BOJ overnight, but no fireworks there. Otherwise, copper prices still very interesting. Sam and I commented on that yesterday. The latest little bump there just to help prices being a strike that's happened, a port strike in Chile, and Chile particularly obviously important for copper given that they account for about one-third of all of the global supply of that particular industrial metal. And also as well with China, we did have industrial profit data overnight in China, which was absolutely crazy number, but that's just due to base effects. So I don't think that's really attributable for why copper is continuing. If anything, the trend is just continuing as far as copper is concerned, and the futures and copper prices printing session high actually as I'm speaking right now. Otherwise, FX markets and US yields pretty quiet actually, and in fact I'd say top right here, gold as well is also pretty range-bound. So you can see here, whether you're looking at euro top left, cable on the top, or gold on top right, and T-notes down at the bottom, um, yesterday's session was fairly quiet, all things being equal. And then also as well, the markets are waiting a lot of big things to happen. And of course, we've got the FOMC on Wednesday, you've got that Q1 advanced GDP on Thursday, got major eurozone data on Friday, you've got all those earnings I just mentioned And so I think at the moment the market's just in a bit of a pause mode, just waiting for these latest developments. And they're not forgetting as well, we've got that American Families Plan speech coming out of Biden. There's a lot of focus on the capital gains tax as well at the moment to get into. So that's the overall context of things. So I'd say this morning market direction is relatively neutral for the time being. Uh, and as we look at the calendar during this briefing, you'll see that there's not too much going on, which does draw quite a bit of attention back to those earnings again. So let's kick, kick it off and let's talk about a few different things. First of all, um, Tesla, um, as you can see here, after market, they did fall actually more than 3% at one point, down about 2.5% though in the end. And, and what actually happened here? Well, they reported Q1 2021 adjusted EPS at $0.93 Analysts were expecting $79 billion. Revenues were a slight beat, $10.39 billion against $10.29 billion. Their free cash flow also positive, nearly $300 million against Street estimates of a negative $83 million. A couple of comments that I think were quite interesting, uh, the company expects this year's volume growth to exceed 50%, while saying that it's on track to start production deliveries at its planned factories in Texas and Berlin this year. They delivered a record 184,800 vehicles globally in Q1. That beat market expectations, particularly strong demand from China, um, but the company did not offer a specific estimate for vehicle deliveries for this year. And that was something that a lot of people were looking for in terms of the details of how does the year plan out, how confident are they about that. Um, some other interesting points, although the actual nominal value is fairly insignificant overall, they did actually generate $101 million in income after selling about 10% of their Bitcoin holdings. And we can have a look at the Tesla chart in a second. Um, actually, profit from Bitcoin regulatory credits and tax benefits contributed overall to about 25 cents to Tesla's adjusted earnings of $0.93, to give you a bit of context there about how they generate their general earnings. So look, let's, let's have a quick look at Tesla shares, because overall I'd say a loss of 2.5% for Tesla post-earnings is actually pretty modest and actually relatively well contained, all things being equal, compared to the usual price swings that we see after earnings. This is actually looking at Tesla shares. I mean, if we go back to where we were, you know, in August or November, I think it was around that November time when, a few months back, when, when Tesla originally was getting involved in Bitcoin. So you can see going back to where we were trading in Bitcoin at the time, the rationale for why they made a bit of money on the back of that. But more importantly, I think, is their Q1 earnings were just absolutely sensational. And so these numbers were a beat on the top and bottom line, but it's just not enough really to, to keep what is otherwise an incredibly elevated share price. So if anything, I think these numbers were okay. It's just the fact that, you know, they're kind of subject to just how great the share price has been, that, you know, if it doesn't follow up with that Q1 stellar performance and really smashes it, knocks it out the park, then markets just come off a tiny bit. But as I said, for Tesla, this isn't like a normal company in terms of its daily price fluctuations. That's relatively contained. And I've put a, um, couple of markups here. That was when Cathie Wood's ARK Investment Fund sold, uh, some of the shares that came at quite a technically strategic point at around $780, which was, as you can see here, this previous area of support we had through— excuse me— late Jan and mid-February. But the rectangle here is what the indicative price is then for the market to reopen, uh, just given those aftermarket earnings. As you can see, for me, that's within, uh, the, the, the kind of more positive side of what is quite a key technical level at around $7.08. They're trading about $7.19 in post-market trade, and the reason why I like $7.08 as support is because of that area of resistance turned support as well that it's had for the price action over the last 7-8 weeks. So overall, it's worth bearing in mind that Tesla's seen a price swing from the initial Q1 earnings report of up at $900 to a low that we saw at beginning of March. We've had a 40% swing in price, and we're about midpoint of where we are at, at this point in time here for Tesla. So a bit of context, I think, quite important. But overall, they've survived this earnings release unscathed as far as their share price is concerned, I would say. But a couple of other things to have a look at, and sticking with the earnings theme, we've also had HSBC come out overnight. And of course, they are listed in Hong Kong, and that's a good indicative way of looking at how their— how investors perceive their earnings. And they were up about 2.7%, so a positive reaction to their earnings release. Their main figure was their adjusted pre-tax profits came out at £6.39 billion. That was a firm beat on expectations of £4.3 billion on the street. Um, their revenues were £13.27 billion against expected £12.68 billion. Profit advances in all the bank's major business areas for HSBC, so keep an eye out for them. When they open up on the FTSE today. There's a few other earnings. I mean, I'm filming this fairly early, so still haven't seen the numbers yet. You've got the likes of BP coming out today, and you've also got Novartis, UBS as well, all coming out ahead of the open. So just to be aware of. Otherwise, other news, as I said very briefly, Bank of Japan stands pat. They left their policy unchanged. That's very much as expected. They took an optimistic view of growth outlook while cutting its price forecast for the year. Um, no real definable reaction though, no great shocks here. The other comment I wanted to touch upon was in the FT, and this was talking about vaccines. And the only reason I really wanted to point this out, I don't think it's really, I'd say, important for intraday day trading strategies today, but I think from a bigger picture macro environment where we're kind of looking at COVID still as a significant driver and the disconnect we've got at the moment from a timing point of view between developed and emerging economies and how they're currently confronting this health crisis. And in India, of course— excuse me— is still one of the worst-hit areas. New Delhi reported the weekend infection rates still well in excess of 300,000. I mean, they're up around 349,000 at the moment. And what was coming out in the news yesterday was that the US is under a lot of pressure because Europe has kind of committed so many vaccines to go to these types of places. The US have ordered well and above, uh, the number of vaccines that are necessary in order to inoculate their own nation. And Biden's basically come out and said the US plans to share 60 million doses of AstraZeneca's COVID vaccine, and India obviously going to be one of the main recipients of that. So I just wanted to point it out because I do think it's important that, you know, as countries like the US in the months to come get to that kind of key turning point where it's, it's kind of the vaccines have done the predominant amount of their job, but given that they've just gobbled up so much of the world's supply, you know, distribution elsewhere is going to be long-term beneficial for them and others from a global perspective, given the fact that we'd want to see the, the COVID virus be, be kind of suppressed globally in order for the whole demand picture to pick up in a more equal fashion going forward. Otherwise, a quick look at the calendar for what's in store for the day ahead. It's pretty quiet actually for the UK European Open, nothing really major to comment on. And actually today from a data point of view is quite quiet. You've got US consumer confidence coming out at 3 PM You got the API oil inventories, um, aftermarket as usual at 9:30 PM. Um, so really it's— I mean, unless you're a fixed income trader, you've got supply out Italy, Germany. You've also got the $62 billion 7-year note auction. Remember the 7-year? Now I'd say the dust has settled. Uh, this is the third one since that kind of February shock that we had. There was a particularly bad auction, so I don't really anticipate any issues with that one today. Um, so really it comes down to earnings then, and the two big ones we're looking for of course are, um, we'll pre-market just to give you a run-through. You've got UPS, General Electric, 3M, Eli Lilly, and then aftermarket you've got Microsoft and Alphabet, undoubtedly the biggest ones. But you've also got people like Visa, AMD. For anyone interested in those kind of more social names, you've got Pinterest as well, which also garnered some headline attention. And what can we expect from Microsoft? Well, a couple of analyst comments. The company's Azure cloud business may modestly decelerate in the March quarter results, according to Cowen's Derek Wood, one of their main equity analysts. He expects to see an acceleration overall growth driven by improving demand for products like the Office suite amid the economic recovery, as well as strong personal computer shipments. That could help their Windows business. And, and taking that over to Google, it seems to be showing sustained growth and strength in the cloud according to Jefferies analyst Brett Thrill, who expects part of the business to benefit from pent-up demand as the year goes on. Also, an important metric to watch for, for Alphabet, for Google, he anticipates an acceleration in ad momentum. So something to keep an eye on as well when we get those numbers. Uh, aftermarket. The final thing to comment on is there still is set to be an OPEC meeting happening tomorrow. So front-running that as usual, we get the Joint Ministerial Monitoring Committee, the JMMC, meeting today, and that is going to be happening from 1 o'clock London time for any oil traders to keep an eye out for. Again, not expecting any changes from OPEC because they just roll over the existing supply pact as it is. Given the balance at the moment of the, the COVID situation globally against the backdrop of a more constructive kind of outlook that we're anticipating to see with US growth going to be in excess, in excess possibly of 6.5% QO growth that we'll see on Thursday. And that's it. So, um, any comments at all, just let me know. Drop a comment on this video if you're watching this on YouTube delayed, otherwise for the guys in Amplify Live Hope that was useful, and I'll see you in the chat room. All right, guys, have a good day.