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Tesla shares zoom ahead on delivery figures

Tuesday, July 04, 2023

Today’s headlines

What’s happening: Shares of Tesla jumped on Monday, after the company released delivery figures for the second quarter.

What happened: The EV maker’s latest production and delivery numbers surpassed market expectations.

Some other major EV stocks also rose sharply on Monday on strong deliveries for June and the second quarter.

Why it matters: The overall automobile industry has been under pressure due to an uncertain economic environment impacting consumer sentiment. Automakers have been following an aggressive pricing strategy amid intensifying competition amid lower demand.

Tesla has made steep price cuts so far this year, which impacted its margins in the first quarter. The EV maker staged a recovery in the second quarter and reported strong numbers despite demand concerns.

Tesla reported 466,140 deliveries for the quarter, ahead of market expectations of 445,000, representing a surge of over 10% on quarter and a 80% jump year-over-year.

The company produced 479,700 vehicles during the quarter, topping forecasts of 456,617 units, marking a year-over-year growth of 88%.

Tesla delivered 19,225 Model S/X vehicles last quarter, above estimates of 14,606, and delivered 446,915 Model 3/Y vehicles, surpassing expectations of 437,386.

Several analysts, including Goldman Sachs, Deutsche Bank, Canaccord Genuity, JP Morgan and
Truist Securities, raised their price targets on the Elon Musk-led company on Monday.

Other EV makers also recorded strong gains on Monday, with Rivian Automotive adding over 17%, after reporting strong delivery numbers. Shares of Lucid Group climbed over 7%.

Shares of China’s EV makers also moved higher, with BYD gaining more than 3% in Hong Kong after the company said June sales almost doubled from the year ago quarter. US-listed shares of China’s EV makers NIO, Li Auto and XPeng rose after the companies reported upbeat deliveries.

How shares responded: Tesla’s shares gained 6.9% to close at $279.82 on Monday. The stock has added around 29% over the past month.

What to watch: Investors will watch the company’s second-quarter results, scheduled for release on July 19. Analysts expect Tesla to report earnings of 79 cents per share on revenues of $24.08 billion, representing 42.2% year-over-year growth.

The markets today

The British pound will be in focus today after edging lower on Monday

Context: The GBP/USD forex pair fell slightly on the first trading session of July with a recovery in the US dollar.

Details: Forex traders remained cautious amid expectations of further rate hikes from the Bank of England.

The GBP/USD forex pair had added more than 0.6% on Friday, following softer-than-expected inflation data from the US.

The sterling was among the top performing currencies versus the greenback during the first half of 2023, adding around 4.8%, due to expectations of the BoE raising interest rates and keeping them higher for longer.

Experts believe UK’s interest rates may not peak until mid-2024 and expect the central bank to increase rates to as much as 6.2%. A month back, markets were expecting rates to peak at around 5.3% by the end of 2023.

On the economic data front, the S&P Global/CIPS manufacturing PMI for the UK was revised higher to a reading of 46.5 for June, higher than the preliminary reading of 46.2. This was still lower than May’s level of 47.1. The latest manufacturing reading was the lowest in six months, and signalled a contraction in manufacturing activity for 11 consecutive months.

Strength in the greenback also exerted pressure on the GBP/USD forex pair. The US dollar index, which measures the greenback’s performance versus a basket of major peers, gained 0.08% to 102.99 on Monday.

The GBP/USD pair fell slightly to 1.2692 during Monday’s session. The yield on the 10-year UK gilt climbed above 4.4%, its highest level since June 19. The FTSE 100 index erased gains recorded earlier in the session to close slightly lower at 7,527.26 on Monday.

What are expectations: With no major economic releases from the UK on Tuesday, investors will monitor global economic factors, which could provide some direction to the sterling. Data on UK’s new car sales, services PMI and composite PMI, due to be released on Wednesday, will also remain in focus.

Other Markets: US trading indices closed slightly higher on Monday, with the Dow Jones index, S&P 500 and Nasdaq 100 up by 0.03%, 0.12% and 0.19%, respectively. US equity markets will remain closed today for the 4th of July holiday.

The news shaping the markets

Türkiye President Recep Tayyip Erdogan said that the country will oppose Sweden joining NATO unless it stops sheltering groups Ankara considers as terrorists. The news sent the safe-haven US dollar index slightly higher this morning.


Sri Lanka’s trade gap widened to $447 million in May, from $403 million in the year-ago month. However, the country’s trade deficit shrinking to $1.9 billion in the first five months of the year from $3.5 billion in the year-earlier period lent support to the LKR/USD forex pair.


South Korea’s consumer price index rose 2.7% year-over-year in June, following a 3.3% increase a month ago. This represented the slowest pace since September 2021 and sent the KRW/USD pair higher in forex trading this morning.


Brazil’s trade surplus widened to of $10.6 billion in June, from $8.8 billion in the year-ago month. However, exports contracted by 8.1% year-over-year to $30.1 billion, exerting pressure on the BRL/USD forex pair.


US construction spending rose by 0.9% to an annual rate of $1,925.6 billion in May, which sent the Dow Jones index slightly higher on Monday.

What else to watch today

Germany’s balance of trade and passenger car registrations, Spain’s unemployment change and number of foreign tourist arrivals, Brazil’s IPC-Fipe inflation and industrial production, Canada’s manufacturing PMI, Argentina’s tax revenue, as well as Turkey’s total vehicle sales.


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