The US first-quarter reporting season accelerates. Up to Friday, 14 companies in the S&P 500 had reported so far, and this week they will be joined by another 158 (or more than 30% of the index), as well as 11 of the 30 companies in the Dow.
This week, look for figures from the likes of Microsoft, Alphabet, Meta (Facebook), and Tesla. Because of the continuing antics of Elon Musk, the EV giant’s figures will dominate.
If Friday is any guide, then the midweek results won’t be pretty.
First up, Tesla shares lost 1.9% on Friday and more than 13% for the week – which leaves them down 40% year to date.
But there was more bad news on Friday when it recalled nearly 4,000 new Cybertrucks (the first made and sold, it seems) to fix problems discovered in the manufacturing process.
Then late Friday night, reports spread that Musk had called off a much-heralded trip to India to discuss a site for a new car plant. It seems he didn’t understand that it would be a bad look to fly to a country whose government is deeply involved in an election for the next six weeks.
Musk claimed he has obligations at Tesla (did he forget the earnings report?) – were the price cuts the ‘obligations’?
And to cap off a busy week, Tesla cut prices for its Model Y, Model X, and Model S vehicles in the US by $US2,000, according to the electric vehicle maker's website.
Tesla slashed the prices for its Model Y base variant to $US42,990 from $US44,990, while the Model X base variant will now cost $US77,990, the website showed.
Tesla didn’t cut US prices for the Model 3 or its Cybertruck.
On the weekend, those cuts were matched in China for its Model 3 and Model Y vehicles made locally, but import Model S and Model X costs have been cut by up to 22%, depending on the options.
Tesla also slashed the price of its self-driving software from $US12,000 to $US8,000. That was also being offered at $US99 a month, but no word (yet?) on whether that cost will be cut as well.
Given the big sell-off in the Nasdaq last week and the week before, don’t look for the tech majors this week to make much of an impact.
Tesla is thought to be a basket case for investors, Netflix starred last week but ruined it all by sharply reducing transparency on the one key measure watched by the market – subscriber numbers.
Tesla reports on Tuesday, Meta on Wednesday, and Microsoft and Alphabet on Thursday.
Exxon Mobil and Chevron report on Friday, as usual (and Chevron’s takeover target, Hess, is down to report midweek).
Other big US groups reporting include Colgate-Palmolive, Pepsi, Nucor, Ford, GM, AT&T, Comcast, Caterpillar, Spotify, Qualcomm, Intel, Merck, Southwestern, Halliburton, Boeing, and IBM.
Australian US-listed companies, Atlassian and ResMed, are due to report Thursday.
And Newmont (which now controls Newcrest) is down to report Thursday as well.
FactSet said in the end-of-week update on Friday that at this early stage, "the first-quarter earnings season for the S&P 500 is off to a mixed start.”
"On the positive side, both the percentage of S&P 500 companies reporting positive earnings surprises and the magnitude of earnings surprises are at or above their 10-year averages.
"On the negative side, substantial downward revisions to EPS estimates for two companies in the Health Care sector have caused a decline in the earnings growth rate over the past two weeks.
"As a result, the index is reporting lower earnings for the first quarter relative to the end of last week and relative to the end of the quarter. However, the index is still reporting (year-over-year) earnings growth for the third-straight quarter.
"Overall, 14% of the companies in the S&P 500 have reported actual results for Q1 2024 to date. Of these companies, 74% have reported actual EPS above estimates, which is below the 5-year average of 77% but equal to the 10-year average of 74%.
In Europe, Barclays, SAP, Novartis, Roche, Air Liquide, Hermès, Nestlé, Sanofi, Schneider, and TotalEnergies are among companies reporting, as well as Brazilian mining giant, Vale, and Canada’s Teck Resources, which is now a copper miner after selling its coal business to Glencore.
