Macro: Sandcastle economics
Invest wisely in Q3 2024: Discover SaxoStrats' insights on navigating a stable yet fragile global economy.
Chief Investment Strategist
Summary: Q3 earnings from US banks JPMorgan Chase, Wells Fargo, and Citigroup have all surprised to upside on both the top and bottom line lifting market sentiment. The three most important earnings releases to watch next week are Tesla, Netflix, and ASML that are reporting on Wednesday. Especially, earnings from Tesla are going to be crucial for market sentiment given the weakness in Q3 deliveries and BYD close to overtaking Tesla as the EV leader.
Ahead of the US market open we have got Q3 earnings results from JPMorgan Chase, Wells Fargo, Citigroup, and BlackRock. Here are the main takeaways from these earnings releases:
JPMorgan Chase
Wells Fargo
Citigroup
BlackRock
The most important earnings releases to watch are Tesla, Netflix, and ASML which are all reporting on Wednesday.
ASML reports before the European market opens with analysts expecting revenue growth of 16% y/y and modest 10% growth in EBITDA. The key focus for investors is sales and outlook for its EUV machines which are used for advanced microchip production. In general, many analysts are a bit lukewarm on the stock until 2H 2024 when there is more visibility on the business and underlying demand drivers. The key risks are still related to potential export bans into China from both the US and Europe.
Tesla reports after the US market close on Wednesday and already now we know that the Q3 delivery figures of 435,059 were lower than Q2 delivery figures of 466,140 suggesting demand is weakening due to higher interest rates on car loans. Q3 production was 430,488 vs est. 461,992 due to planned factory upgrades. The earnings release is going to be key for sentiment in US technology stocks so this is a must watch earnings releases. The recent weakness in China, BYD’s trajectory to overtake Tesla as the leading EV maker, and Tesla being the center of the EU’s probe into Chinese EV production the risks are rising for Tesla shareholders.
Netflix also reports Wednesday after the US market close with analysts expecting Q3 revenue growth to increase to 8% from 3% in Q2 as price hikes, better content, the new advertising business, and crackdown on password sharing are all factors contributing positively to higher growth in both revenue and earnings.
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