Tesla slumps as ‘battery day’ timescales disappoint

After being hyped up by CEO Elon Musk in the run up to it, Tesla’s ‘battery day’ disappointed investors, as the new innovations unveiled remain years away. The firm’s share price closed the day 5.6% down, then slumped further in after-hours trading, after Musk clarified that some of the technologies showcased are “close to working” and require a “a ton of work from here to there.” Key announcements from the day include a hopeful timeline on full self-driving software (versus Musk’s promise last year to have one million autonomous taxis on the road by the end of 2020), Tesla’s plan to handle more of its own battery production, cheaper battery cells, and new production technologies. Musk also revealed that the firm has more than 600,000 reservations for its Cybertruck, and that he anticipates battery advances will allow Tesla to produce a $25,000 vehicle in around three years.

Tesla aside, US markets enjoyed a positive day as COVID winners from the first wave moved back into the spotlight. The major US indices finished higher but failed to lift Asian markets, which were flat. European markets have opened slightly higher with modest gains for the FTSE and Dax.

Meanwhile, the price of gold tumbled below $1,900 for the first time since July, trading down at $1,898 this morning. It was hit by a stronger US dollar which is trading at two month highs with no stimulus package forthcoming as yet to cap these gains.

Twitter, Amazon lead market rally as stocks snap losing streak

Consumer and technology names led a positive day for US stocks, snapping a multi-day losing streak. In the S&P 500, the consumer discretionary sector was the biggest winner with a 3% gain, while the information technology sector was up 1.7% and the communication services sector added 1.9%.

Twitter and Amazon led the index, adding 7.1% and 5.7% respectively. Amazon jumped after an upgraded rating from analysts at Bernstein, who moved the stock up to outperform. Bernstein analyst Mark Shmulik argued that the firm is the primary beneficiary of trends permanently accelerated by the pandemic, including e-commerce, cloud services and digital advertising.

Also making headlines on Tuesday was House Financial Services Committee testimony from Federal Reserve chairman Jerome Powell, in which he said that it will be up to lawmakers to provide businesses with the direct financial assistance they require to survive the pandemic.

S&P 500: +1.1% Tuesday, +2.6% YTD

Dow Jones Industrial Average: +0.5% Tuesday, -4.4% YTD

Nasdaq Composite: +1.7% Tuesday, +22.2% YTD

Kingfisher jumps 10% after beating profit expectations

London-listed stocks had a mixed Tuesday, with the FTSE 100 closing in the green and the FTSE 250 falling marginally. One stock riding high on Tuesday was B&Q parent Kingfisher, which jumped 9.9% after beating profit expectations and announcing that it will be repaying government furlough payments it has received. Adjusted pre-tax profits for the first six months of the year were around 15% higher than analyst expectations, as the firm benefited from consumers spending on home and garden improvements during the pandemic lockdown in the absence of holidays and other luxuries.  At a macro level, the Bank of England played down the idea that negative interest rates will be a tool used in the immediate future as the UK deals with a second Covid-19 wave.

FTSE 100: +0.4% Tuesday, -22.7% YTD

FTSE 250: -0.3% Tuesday, -23.1% YTD

What to watch

General Mills: Consumer brands giant General Mills is the firm behind names such as Cheerios, Haagen-Dazs, Nature Valley and Betty Crocker. The company has added 8.3% to its share price year-to-date, as consumers stuck at home have spent on eating in, but the firm’s stock has sunk 9.3% over the past month. General Mills reports its latest set of quarterly earnings today, analysts will be probing whether that elevated demand is persisting. The firm beat earnings expectations last quarter, and analysts expect an earnings per share figure of $0.87 for the quarter being reported on today. Currently, Wall Street analysts favour a hold rating on the stock.

Cintas Corporation: American business services firm Cintas Corporation has gained 20% in 2020 so far. The firm’s main business lines are uniform rental and facility services, such as cleaning, with the potential for strong demand as companies overhaul their office space and protocols to adapt to the pandemic. Cintas delivers its latest quarterly earnings results on Wednesday, where analysts will probe the firm on how it is capitalising on companies beginning to bring staff back to the office. Currently, analysts rate the stock as a hold.

Cineworld: 2020 has been a disastrous year for London-listed Cineworld, which has seen its share price slump close to 80% year-to-date. The firm recently shared that the reopening of 200 Regal branded cinemas in the US has yielded encouraging results but is now facing the return of stricter lockdown restrictions in the US, which clouds the path for a return to normality. Cineworld delivers its latest set of earnings on Thursday, where a steep loss is expected, and investors will be watching for reopening progress, initial customer numbers, and how the firm plans to handle a return of lockdown restrictions.

Crypto corner: US banks given greenlight to hold reserves for cryptoasset issuers

National banks and federal savings associations can now hold reserve funds for stablecoin issuers, according to new guidance from the US Office of the Comptroller of the Currency.

According to reports, a new six-page letter from the Comptroller’s office notes that “stablecoin issuers may desire to place assets in a reserve account with a national bank to provide assurance that the issuer has sufficient assets backing the stablecoin in situations where there is a hosted wallet. For the reasons discussed below, we conclude that a national bank may hold such stablecoin ‘reserves’ as a service to bank customers.”

The news follows the OCC’s decision to allow federally chartered banks to hold custody of cryptocurrencies, and is another sign of banks’ deep integration into the cryptoasset world already.

All data, figures & charts are valid as of 23/09/2020. All trading carries risk. Only risk capital you can afford to lose.