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10:20
Morning Call: Softer dollar boosts commodities, stocks
#SaxoStrats
21 September 2018 at 7:40 GMT
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Morning Call: Markets stabilise as trade tensions ease
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Morning Call: Chinese shares surge as trade war rages on
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19 September 2018 at 8:36 GMT
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18 September 2018 at 10:28 GMT
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Morning Call: Trump hits China with tariff plan
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The week ahead in macro
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17 September 2018 at 8:11 GMT
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Macro Monday week 38: Keep Global Macro and Carry On
Kay Van-Petersen
17 September 2018 at 8:02 GMT
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Morning Call: US yield curve lifts, boosting dollar
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17 September 2018 at 7:23 GMT
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12 September 2018 at 14:44 GMT
11:15
Morning Call: Chinese shares fall further
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11 September 2018 at 8:36 GMT
11:34
Morning Call: USD, SEK in focus
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10 September 2018 at 7:49 GMT
2:47
The week ahead in macro
Kay Van-Petersen
10 September 2018 at 7:37 GMT
14:02
Morning Call: Is Japan next?
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07 September 2018 at 7:35 GMT
Video / 02 August 2018 at 7:48 GMT

From the Floor: Why is TSLA up by 9.36%?

#SaxoStrats
   • TSLA shares rise 9.36% on revenue beat
   • GBP in focus on BoE 'Super Thursday'
   • Trade war/growth fears weigh on industrial metals

SaxoStrats
By Michael McKenna

Tesla's latest earnings release contained some unexpected good news, but also showed the firm reporting its largest-ever quarterly loss at $717 million. The big surprises to the plus side were a revenue beat and a better-than-expected rate of cash burn ($739m versus $900m expected) while on the negative side, Tesla revised production targets lower (from 1m to 750,000 for 2020) and missed on earnings-per-share at $3.06, $0.14 lower than the analyst estimate of a $2.92 loss per share.

"I don't understand how the conference call did not feature more questions," says Saxo Bank head of Equity Strategy Peter Garnry.

"Tesla is talking about a $5-10 billion expansion into China as well as a potential factory in Europe," reports Saxo's equities head, who adds that "nothing about the current balance sheet supports these plans, not even at 10,000 Model 3's per week".

Tesla now says it expects to be producing 6,000 Model 3's/week by late August.

TSLA shares rose 9.36% to $328.99 after hours Wednesday.

Beyond TSLA, Garnry reports that Chinese equities are down 3% on trade war escalation fears while the US economic data continue to support expectations of strength.

This was certainly the Federal Open Market Committee's view yesterday, with the Fed's largely "copy and paste" statement changing its description the US economy from 'solid' to 'strong'.

"The dollar remains firm post-FOMC," says Saxo Bank Head of FX Strategy John Hardy, "but USDJPY is doing its own thing... a look across the major yen pairs, in fact, [shows the potential for a reversal]".

Today's forex focus, however, will shift from the yen to sterling as the Bank of England reports its 'Super Thursday' inflation and interest rate decisions.

EURGBP
















"We could be seeing some light at the end of the tunnel in Brexit terms; new reports are showing that German chancellor Merkel may be receiving some pushback from within her CSU/CDU coalition on European inflexibility [with regard to Brexit]", Hardy says.

Hardy also reports that the 10-year Japanese Government Bond yield stands at 12 basis points versus 2.99% for the US 10-year Treasury.

Finally, Saxo Bank Head of Commodity Strategy Ole Hansen tells us that industrial metals and oil are both feeling the weight of trade war and growth concerns, but says copper may see a rebound on mid-August strike activity at the world's largest copper mine in Chile.

Wheat, meanwhile, continues to rally as global production forecasts adjust lower.

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