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Tesla, AT&T Earnings, Jobless Claims, Return of Lockdown -What's Moving Markets

EconomyOct 21, 2021 06:43AM ET
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© Reuters.

By Geoffrey Smith 

Investing.com -- Tesla (NASDAQ:TSLA) reported its best-ever quarter, but its stock struggled to build on its sky-high valuation. Donald Trump is set for a return to social media. Intel (NASDAQ:INTC) and AT&T (NYSE:T) will report earnings in the course of the day. The U.S. releases weekly jobless claims numbers and China Evergrande is closer to being formally in default. And the first lockdown of fall is there, as Moscow orders all shops, bars and restaurants to be shut against a backdrop of record deaths and infections (and a miserably low vaccination rate). Here's what you need to know in financial markets on Thursday, 21st October.

1. Tesla's record quarter

Tesla delivered its best quarter ever for revenue and profit but its stock struggled to build on gains that have left its valuation looking stretched, even by its own standards. The stock currently trades at 20 times sales and 451 times last year’s earnings.

The company had already reported record production and delivery numbers for the three months through September. Its best-ever operating margin – achieved despite an unfavorable product mix and the well-documented sectoral problems involving shipping and component shortages – painted a picture of a company that is no longer dependent on emissions credits to turn a profit.

The only off notes struck were in the absence of CEO Elon Musk from the regular analyst call, leaving CFO Zachary Kirkhorn to warn that supply chain issues and higher input costs may yet weigh on future quarters.

2. Trump returns to social media

Donald Trump is returning to social media, ahead of a widely-expected run for the Presidency in 2024.

Trump announced on Wednesday that he will establish a new social media platform called TRUTH Social “to challenge the tyranny of Big Tech”. He has been banned from Facebook (NASDAQ:FB) and Twitter (NYSE:TWTR) since his supporters stormed the Capitol on January 6th in an effort to stop Congress certifying Joe Biden’s election victory.

The platform, to be owned by Trump Media and Technology Group, will go public by a merger with Digital World Acquisition (NASDAQ:DWAC), a SPAC that listed in September. DWA stock soared 45% in premarket trading.

Facebook stock and Twitter stock reacted only moderately to the news, inching down by less than 1% in line with benchmark stock futures.

3. Stocks set to open lower; jobless claims due

U.S. stocks are set to open lower later, as earnings continue to pour in. Wednesday’s round of results were solid enough to push the S&P 500 to within a whisker of its record high close in August, but consolidation is likely to be the order of the day ahead of the release of weekly jobless claims at 8:30 AM ET (1230 GMT), the day’s only major economic release.

By 6:20 AM ET (1010 GMT), Dow Jones futures were down 100 points, or 0.3%, while S&P 500 futures were down 0.2% and Nasdaq 100 futures were down 0.1%.

The day’s earnings roster is headed by AT&T before the open and by Intel after the close. Medical devices group Danaher (NYSE:DHR) already put out results ahead of expectations, as did Anglo-Dutch consumer giant Unilever (NYSE:UL), which followed Nestle and Procter & Gamble (NYSE:PG) in saying it expects to be able to pass higher input prices on to consumers.

4. First of the autumn lockdowns in Russia

The pandemic isn’t over yet. The first lockdowns of the northern hemisphere winter are here, with Russia ordering a week-long factory shutdown and its capital Moscow ordering all shops, bars and restaurants to close from Oct. 28.

That comes as levels of both new cases and deaths running at record levels, a result of popular resistance to the locally-developed Sputnik vaccine, which was the first effective vaccine against Covid-19 to be authorized by any G20 country. Less than one-third of the country’s 140 million population is fully-vaccinated.

Elsewhere, the U.K. government has been forced to play down suggestions that it will reintroduce Covid-19 prevention measures, after dropping mask mandates and refusing to adopt vaccination passes earlier in the summer. New case levels are running at over 60,000 a day, while death levels are also running at a steady rate of between 130-140 a day.

5. Evergrande rumbles on toward formal default

China Evergrande inched closer to a formal default after failing to complete the sale of a key money-making asset to help meet its short-term obligations.

The stricken developer’s stock fell as much as 14% in Hong Kong as it resumed trading after a three-week hiatus, after announcing the end of talks to sell a stake in its property services unit to Hopson Developments.

The grace period for the first dollar bond on which Evergrande missed payments expires at the end of Friday. Other developers are currently missing full payments on their dollar bonds on a near-daily basis.  The yuan remained stable, reflecting confidence in official reassurances that systemic risks are being contained.

Tesla, AT&T Earnings, Jobless Claims, Return of Lockdown -What's Moving Markets
 

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Comments (9)
bret lafrance
bret lafrance Oct 22, 2021 7:46AM ET
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Interesting how we can so easily be fooled into thinking that Tesla and Musk are any thing more than the current version of "the greatest show on earth". With all of the hype eminating from "the street" it is hard to believe that it will soon come to an end, to be replaced by the next big thing and another too good to be true story of never ending growth and profit.
kelvin kevy
kelvin kevy Oct 22, 2021 6:26AM ET
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if they bring back lockdown wooow! good, that's some profits to collect
John Brown
John Brown Oct 22, 2021 1:21AM ET
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TSLA peaked at $900. I think it is going to test $790😩
me ish
me ish Oct 21, 2021 10:51PM ET
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Trump should have combined the name of his company and the SPAC to read Trump World Acquisition Technology or *******for short
me ish
me ish Oct 21, 2021 10:51PM ET
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T W A T
Darryl Allen
Darryl Allen Oct 21, 2021 11:46AM ET
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If masks and vaccines work why do masked/vaccinated people force others to get it? Aren't they safe with the mask/vaccine?
me ish
me ish Oct 21, 2021 11:46AM ET
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and there lies just one of many vast holes in the argument of the pharma industrial complex - hardly anything they say actually makes any sense at all, let alone the fact that they're still telling people they have to get the vaccine when most unvaccinated already have better natural immunity than any vaccine could give them.
Lake Lot
Lake Lot Oct 21, 2021 11:46AM ET
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Get vaccinated for others or maybe you do not care . Then perish
Steffen vdm
Steffen vdm Oct 21, 2021 11:46AM ET
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Because then we can move on as a society perhaps? Then we can use medical staff for other patients rather than Covid patients. Then we can visit the ones we love. Then we can go out again. Then we can go back to the office. Then we can meet friends again. Then we can socialize again. Then perhaps we don't need to wear masks anymore. Then the entertainment industry can create jobs again. Then restaurants and bars can start up food supply chains again. Then we can go on holidays again. Then people won't feel isolated anymore. Then we can use public transport again without fears.
Darryl Allen
Darryl Allen Oct 21, 2021 11:46AM ET
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Steffen vdm  I don't think you understand that you can do all of that already with your mask and vaccine
Tre Hsi
Tre Hsi Oct 21, 2021 9:55AM ET
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"Trump announced on Wednesday that he will establish a new social media platform called TRUTH Social"  -- LOL, another announcement of a new social media platform, what's that, the third of fourth one since he got banned?
Steffen vdm
Steffen vdm Oct 21, 2021 9:55AM ET
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TRUTH: Trump Toot Horn. But seriously, Trump doing/creating something social?? Sure....
Ronald Warren
Ronald Warren Oct 21, 2021 9:16AM ET
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This much I know. New unemployment #'s coming in line and inflation out of control. On Nov the 1st I'm going all in on SQQQ $8.00 calls a month out and wait for the word on Powell's tapering!!
me ish
me ish Oct 21, 2021 9:16AM ET
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I'm already in on that big time - I may be a little early, but I'd rather be one month early, than one month late!
Ron Love
Ron Love Oct 21, 2021 9:16AM ET
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You’re expecting a move? Last FOMC Powell said tapering begins November, that’s not new news to the markets.
Hank Reardon
Hank Reardon Oct 21, 2021 7:19AM ET
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All great news!!! SPY has record high, as a result.  Give me an F'n break
Ron Love
Ron Love Oct 21, 2021 7:04AM ET
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Why does the shutdown of shops, bars and restaurants in Moscow have anything to do with the stock market in the U.S. Are Russian trinket stores and nightclubs publicly traded on the NYSE? 🤔
Show previous replies (1)
Ryan Droege
Ryan Droege Oct 21, 2021 7:04AM ET
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Trump supporters stormed the Capitol! They stormed it! or the guards moved the barricades and welcomed them in. one of the two.
Marco cuevas
Marco cuevas Oct 21, 2021 7:04AM ET
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Man US markets will use any little blip news to SELL and take profits and justify it thats all pure manipulation of the market.
chase millions
chase millions Oct 21, 2021 7:04AM ET
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lol
Jurgen Daub
Jurgen Daub Oct 21, 2021 7:04AM ET
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needs something to make people panik
Tre Hsi
Tre Hsi Oct 21, 2021 7:04AM ET
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Ryan Droege  if you are surrounded by a couple of thousand angry protesters ready to beat you up if you don't let them into your house, I wonder if you would open the door to let them in?
 
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