Tesla’s sales are forecasted to rise 44.5%
|While there’s still a long way to go in the earnings season, the results so far have been encouraging to investors, perhaps best seen in the rally in bank stocks despite the inverted yield curve.
Yesterday, Netflix (NASDAQ: NFLX) reported losing a million subscribers instead of the 1.8 million forecast and the stock jumped over 8%.
Since the June 16th bottom, consumer discretionary is up 11%, technology is up 9.4%, communication services +7.6%, and energy has given back 7% of their market-leading gains. The poster child for high-growth names, Ark Innovation (ARKK) is up 23.9%.
This morning, the market is holding on to most of yesterday's gains as interest rates are modestly lower with the US 10-year not able to remain above 3% despite the Fed determined to push overnight Fed Funds to that level by year end.
Crude oil can't seem to get back above $100 a barrel, albeit natural gas continues to march higher on the back of uncertainty of Russian supplies to Europe.
Tesla's earnings
After the close will be Tesla (NASDAQ: TSLA) earnings, which needs to keep strong growth trends to support it's +100X P/E. Mr. Navellier said, "TSLA's sales are forecasted to rise 44.5% to $17.28 billion, while its earnings are forecasted to be only $1.98 per share. The analyst community has revised its consensus earnings estimate 18.9% lower in the past three months, so an earnings disappointment could be in store. Elon Musk's silence in recent weeks may precede a disappointment."
He added, "Shanghai has traditionally accounted for all of Tesla's earnings since the company pays no U.S. taxes. The company's guidance is key and it is critical that Tesla can offset some of Elon Musk's negative comments that its new factories in Austin and Berlin are 'burning' money."
Other Wednesday earnings on deck include ASML, Abbott Labs (NYSE: ABT), Biogen (NASDAQ: BIIB), Kinder Morgan (NYSE: KMI), CSX, Baker Hughes (NASDAQ: BKR) and United Airlines (NASDAQ: UAL).
Today, we heard about the continued slowdown in the housing market with existing home sales down for the fifth straight month due to higher mortgage rates and higher prices. Median existing home prices are up 13.4% y-o-y to $416,000.
Crypto risk-on
In another sign of investors willing to take on more risk, crypto has staged a major recovery off the bottom with bitcoin +35% to $24K, and Ethereum up +80% to $1,600.
The US dollar has found footing today after falling over 2% from its 20-year high.
We still have a long way to go with earnings in the weeks ahead but so far it's been a positive season and we've seen the VIX steadily fall since it began.
While this may be another of several bear market rallies, it's time to start adding to positions in anticipation of continued generally positive earnings announcements.
Coffee beans
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