Stock exchanges’ conclusion in September How will Tesla’s stock perform after its sales exceeded expectations?

2021-10-03T17:32:00
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Stock exchanges conclusion in September How will Tesla’s stock perform after its sales exceeded expectations?

 

Stock exchanges’ conclusion in September How will Tesla’s stock perform after its sales exceeded expectations: In global stock markets, stock prices declined sharply last week as monetary authorities began to slash incentives recently, with investors fearing a period of high inflation and slower economic growth. 

Evest follows all this and more in the following report:

Topics:

Sharp decline on Wall Street exchanges

Causes for deteriorating market morale

Low incentives for all investors

The worst quarter since the last year’s first quarter

Is there a period of high inflation and stagnation?

How did the European and Asian stock exchanges perform?

Tesla sells more electric cars than expected

 

Sharp decline on Wall Street exchanges

On Wall Street, the Dow Jones index declined 1.4 percent to 34326 points last week, while Standard & Poor’s fell 2.2 percent to 4357 and Nasdaq 3.2 percent to 14566.

The sharp drop in indices is due, among other things, to US government bond yields rising to their highest level since June as inflation is predicted to remain high,

which could force the Fed to tighten monetary policy before estimating it.

Causes for deteriorating market morale

Treasury Secretary Janet Yellen recently said she estimates inflation will be close to 4 percent by the end of this year,

and warned lawmakers that if they don’t agree on the level of government borrowing,

public services could be shut down, causing serious damage to the economy.

In particular, Congress is negotiating the draft budget package and discussing,

among other things, tax increases and the level of federal government borrowing.

Investors have been more concerned about strong growth in bond yields over the past week, leading to massive stock market sales. 

According to analysts: “There are a number of reasons for the deterioration of the market mood,

including painstaking negotiations on government borrowing, the budget and tax increases in Washington.”

 

 

Low incentives for all investors

Investors’ desire for risk also declined as the monetary stimulus,

which had been supporting the economy and financial markets since the beginning of the Coronavirus pandemic, began to decline. 

The Fed recently said that the reduction in the monthly amount of bond purchases could begin in November and that key interest rates could be increased early next year before they are estimated.

At the end of the week, Congress passed a last-minute bill on temporary government funding through December 3,

thereby preventing the closure of federal services.

But President Joe Biden and his budget proposal are facing other problems as Democrats argue about his major investment and reform projects.

According to analysts: “The negotiations on government borrowing and this chaos on temporary financing have put pressure on the market,

after seven months of rising stock prices, so the market needs to take a break.”

The worst quarter since the last year’s first quarter

In September, the S&P 500 index fell 4.8 percent, the Dow Jones 4.3 percent and the Nasdaq 5.3 percent.

For Standard & Poor’s and Nasdaq, this is the biggest monthly loss since March last year, and for the Dow Jones Index. it’s the biggest this year. 

In the entire third quarter, the Standard & Poor’s Index rose slightly, about 15 percent since the beginning of the year.

On the other hand, the Dow Jones and Nasdaq index fell in the fourth quarter.

For all three indices, this quarter was the worst since the first quarter of last year.

This is due to investor uncertainty resulting from the slowdown in the recovery of the United States and the world economy from the Corona crisis,

as well as rising inflation, which may last longer than originally expected.

Is there a period of high inflation and stagnation?

As a result, exchanges are increasingly discussing inflation accompanied by stagnation, high inflation and economic stagnation. 

According to Bloomberg analysts: “We can debate whether the stagnation is inflationary or not, but inflation and economic growth indices point to that.

We do not yet know whether this will lead to problems in the coming years, but the risks are worrying enough that these market developments are not surprising.”

How did the European and Asian stock exchanges perform?

On European exchanges, stock prices declined last week.

The London FTSE index declined 0.35 percent to 7027, while the Frankfurt Dachs index declined 2.4 percent to 15156 and Paris CAC 1.8 percent to 6517. 

In the meantime, the Nikkei index on the Tokyo Stock Exchange fell 4.9 percent to 28771 points.

Tesla sells more electric cars than expected

Tesla reported that it sold more than 241 thousand electric cars worldwide in the third quarter of 2021, despite a global shortage of microchips. 

According to the Associated Press, sales rose 72% compared to the same period last year, when Tesla delivered 140 thousand electric cars.

In the meantime, analysts expected Tesla to sell 227 thousand electric cars in the third quarter. This data was provided by the research company FactSet.

In total, this year the company delivered about 627 thousand electric cars, already exceeding last year’s figure of 499550 units.

Wedbush analysts expect Tesla to sell about 900000 electric vehicles worldwide in 2021.

The results should be good enough to keep the stock stable on Monday.

The biggest reaction to strong deliveries usually appears in the weeks after the figures are released.

In the period between reporting deliveries and reporting quarterly earnings, Tesla’s stock has outperformed the S&P 500 six times out of eight.

Quarterly profits come after three or four weeks of delivery results.

Tesla’s stock seemed remarkably stable under recent market volatility. The value of the stock has risen by 0.1% over the past week.

Moreover, Tesla’s stock rose by about 5% in September. 

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