Today is Thursday, April 21, 2022.
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Tesla Hits Record Profit
Shares of Tesla (Nasdaq: TSLA) jumped 5.52% in after-hours trading on Wednesday after the electric vehicle company posted positive earnings.
Financials: Tesla reported earnings per share of $3.22 and revenue of $18.76 billion; both were better than expected.
The Good: Profit reached $3.3 billion, a record for the company. Revenue grew a whopping 81% year-over-year, which the company attributed to more vehicle deliveries and an increased average selling price. The operating margin reached 19.2%. Free cash flow hit $2.2 billion.
The Bad: Despite the success, Tesla faced numerous challenges in the quarter. Tesla saw global supply chain and manufacturing challenges, which limited the company’s ability to run factories at full capacity. A spike in Covid-19 cases temporarily shut down the factory in Shanghai. The prices of some raw materials have also increased.
Numbers: Shares of Tesla are down 18% this year, but are up 6% in the past 30 days.
Final Thoughts: The valuation of the stock is still high. How can the company grow if some factories continue to stay closed?
Notable Earnings Today: American Airlines Group (Nasdaq: AAL), Snap (NYSE: SNAP), AT&T (NYSE: T), Intuitive Surgical (Nasdaq: ISRG), Nucor (NYSE: NUE), PPG Industries (NYSE: PPG), Freeport-McMoRan (NYSE: FCX), Boston Beer (NYSE: SAM), Dow (NYSE: DOW), Qualtrics International (Nasdaq: XM), Union Pacific (NYSE: UNP), SVB Financial (Nasdaq: SIVB), Philip Morris International (NYSE: PM), Forestar Group (NYSE: FOR), NextEra Energy Partners (NYSE: NEE), Huntington Bancshares (Nasdaq: HBAN), Bank OZK (Nasdaq: OZK), Danaher (NYSE: DHR), Associated Banc Corp (NYSE: ASB), ABB Ltd. (NYSE: ABB), Alaska Air Group (NYSE: ALK), AutoNation (NYSE: AN), BJ's Restaurants (Nasdaq: BJRI), Blackstone (NYSE: BX), Genuine Parts (NYSE: GPC), KeyCorp (NYSE: KEY), Marsh & McLennan (NYSE: MMC), Pool (Nasdaq: POOL), Quest Diagnostics (NYSE: DGX), Tractor Supply (Nasdaq: TSCO), Tri Pointe Homes (NYSE: TPH), Union Pacific (NYSE: UNP), Watsco (NYSE: WSO).
Notable IPOs Today: N/A.
Notable Equity Crowdfunding Campaigns Ending Today: Yocal (Wefunder), Altwork (Republic).
Notable Economic Events Today: Jobless Claims (8:30 a.m. ET), Philadelphia Fed Manufacturing Index (8:30 a.m. ET), Philly Fed Employment (8:30 a.m. ET).
Simplify Files for Bitcoin Mixed Strategy ETF
Simplify Asset Management filed for a new Bitcoin futures ETF (exchange-traded fund) on Wednesday.
Details: Called the Bitcoin Strategy Risk-Managed Income ETF, the fund will invest in Bitcoin futures, plus there’s an income strategy layer to invest in U.S. Treasury securities and an options overlay strategy.
Background: The U.S. Securities and Exchange Commission (SEC) has approved several ETFs that invest in Bitcoin futures, which is a derivative trading product, but not any ETFs that invest in actual Bitcoin.
Final Thoughts: Simplify hopes that the SEC approves the new ETF by July.
Defensive Strong So Far in 2022
After a rough start to the stock market in 2022, it appears that defensive asset classes have outperformed the broader market.
Details: Defensive sectors such as healthcare, utilities, consumer staples, and real estate have performed better than many other sectors, including technology, in 2022.
Background: Between the war in Europe and new policies from the U.S. Federal Reserve, 2022 has not been kind for a growth investing strategy. Thus, defensive stocks have performed well.
Final Thoughts: Will defensive asset classes continue to perform well throughout the rest of 2022?
Trends to Watch
Netflix and Chill: Bill Ackman sells entire Netflix stake at roughly $400mn loss (Financial Times)
Soaring: U.S. Home Prices Hit a Record of $375,300 in March (The Wall Street Journal)
Jumping on the Bandwagon: Coinbase launches social NFT marketplace in limited beta, just as NFT sales dive (The Verge)
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