Tesla fell sharply after the market closed.
On July 23rd local time, the three major US stock indices closed slightly lower. The financial reports of large technology companies such as Google and Tesla have become the focus.
Although Tesla's second quarter revenue exceeded expectations, its adjusted earnings per share fell short of expectations. In addition, Tesla CEO Elon Musk stated that Tesla will deliver affordable models in the first half of next year; Postpone the Robotaxi launch event from August to October; It is expected that the production of the Roadster sports car will begin next year. As a result, Tesla's after hours stock price plummeted by over 8%.
The three major US stock indices closed slightly lower
On July 23rd local time, the three major indexes of the US stock market closed slightly lower. The Dow Jones Industrial Average fell 57.35 points, or 0.14%, to 40358.09 points; The Nasdaq fell 10.22 points, or 0.06%, to 17997.35 points; The S&P 500 index fell 8.67 points, or 0.16%, to 5555.74 points.
The Russell 2000 Index, which focuses on small cap stocks, closed up over 1%, continuing last week's gains. Recently, small cap stocks have performed well, and traders believe that the reason behind this is that a large amount of funds have been transferred from large technology companies that led the rise earlier this year to small cap stocks.
Investors are becoming increasingly optimistic about the prospect of the Federal Reserve starting to cut interest rates soon, as it is particularly beneficial for smaller and more cyclical companies.
On Tuesday's economic data, the decline in existing home sales in the United States in June was greater than expected, as median home prices hit a new historical high. However, improved supply and lower mortgage rates have brought hope for a possible rebound in real estate activity in the coming months.
The National Association of Realtors (NAR) reported that compared to May, the sales volume of second-hand homes in June decreased by 5.4% month on month, with a seasonally adjusted annualized total of 3.89 million units. Sales also decreased by 5.4% compared to June last year. This is the slowest sales growth rate since December last year.
The above data are all for houses that have already been sold, mainly based on contracts signed in April and May.
In April and May of this year, the average interest rate for 30-year fixed mortgage loans in the United States jumped to over 7%. Afterwards, interest rates slightly declined, but remained at a high level of over 6%.
Tesla falls sharply after hours, second quarter performance mixed
In terms of sectors, the 11 major sectors of the S&P 500 index fell 8 times and rose 3 times. The energy sector and utility sector led the decline with a decrease of 1.55% and 0.65% respectively, while the materials sector and financial sector led the rise with an increase of 0.38% and 0.08% respectively.
Companies that account for 29% of the market value of the S&P 500 index will release their financial reports this week, with Tesla and Google's parent company Alphabet becoming the first companies among the "Big Seven" technology stocks to release their results. Despite last week's sell-off, the valuation of technology companies remains high. Investors are looking for more evidence to prove that their business is strong and that the boom around artificial intelligence is reasonable.
The rise and fall of large technology stocks are mixed. Boeing rose over 4%, Amazon and Oracle rose over 2%, Broadcom rose over 1%, Apple, Microsoft, TSMC, Meta, and Google-A rose slightly, AMD, Netflix, Nvidia, Qualcomm, and ASML fell slightly, AMD Semiconductor and Intel fell over 1%, and Tesla fell over 2%.
Tesla closed down 2.04%, and the decline continued to widen after hours, with a drop of over 8% as of press time. Tesla's post market financial report shows that the company's revenue for the second quarter was $25.5 billion, with analysts expecting $24.63 billion; Adjusted earnings per share of $0.52, analysts expect $0.60; Operating profit of 1.61 billion US dollars, analysts expect 1.81 billion US dollars; Gross profit margin of 18%, analysts expect 17.4%; Free cash flow of 1.34 billion US dollars, analysts expect 1.92 billion US dollars; It is still expected that the sales growth rate will significantly decrease in 2024; It is expected that the production in the third fiscal quarter will increase month on month. Tesla stated that the company's overall focus remains on reducing costs. The new car plan, including more affordable models, will still begin production in the first half of 2025. These vehicles will utilize some features of our next-generation platform and our existing platform, and will be able to be produced on existing vehicle production lines, "Tesla said in its second quarter financial report. In addition, during the earnings conference call, Tesla CEO Elon Musk announced that the Robotaxi launch event will be postponed from August to October; It is expected that the production of the Roadster sports car will begin next year.
Google-A closed up 0.07%, rising about 3% at one point after the market closed, but then turned down, falling more than 2% as of press time. Alphabet's Q2 revenue was $84.74 billion, up 14% from $74.604 billion in the same period last year, and analysts expect $84.37 billion; Google Cloud's revenue for the second quarter was $10.35 billion, with analysts expecting $10.09 billion; Google's advertising revenue for the second quarter was $64.62 billion, with analysts expecting $64.53 billion; Other business revenue for the second quarter was $365 million, with analysts expecting $389.6 million; The revenue for the second quarter, excluding traffic acquisition costs, was $71.36 billion, with analysts expecting $70.7 billion; The operating profit for the second quarter was 27.43 billion US dollars, with analysts expecting 26.37 billion US dollars.
Amazon rose 2.11%. On Tuesday, documents from Italian prosecutors showed that Italian tax police confiscated approximately 121 million euros from the Italian subsidiary of e-commerce giant Amazon as part of an investigation into alleged tax fraud and illegal labor practices. In a 94 page order, the Milan prosecutor's office accused the logistics service company Amazon Italia Transport of evading labor and tax laws, relying on cooperatives or limited liability companies to provide workers, while evading value-added tax and reducing social security payments.
AMD closed down 1.2%. South Korean Samsung announced a partnership with AMD to provide high-performance FCBGA (Flip Chip Ball Grid Array) substrates for ultra large scale data center products, and invested 1.9 trillion Korean won (approximately 9.975 billion yuan) to advance related technology and manufacturing capabilities to meet the highest industry standards and future technological needs.
Most financial stocks have risen. Mizuho Financial rose more than 2%, while Travelers Insurance, United Bank of America, Goldman Sachs, American International Group, and Morgan Stanley rose more than 1%. Wells Fargo, American Express, Deutsche Bank, ChinaAMC, Bank of New York Mellon, First Capital Financial, Bank of America, Citigroup, BlackRock, and JPMorgan Chase rose slightly, while Regional Finance, MetLife, Hartford Financial, Barclays, UBS Group, and Hershey's Insurance fell slightly. Visa and Mastercard fell more than 1%.
Energy stocks fell across the board. US Energy, Chevron, Apache Oil, ExxonMobil, Marathon Oil, ConocoPhillips, Western Petroleum, Shell, Imperial Oil, Petrobras, and BP (US) fell more than 1%, while Schlumberger and Duke Energy experienced slight declines.
In terms of other popular companies, United Parcel Service (UPS) closed down 12.05%, the largest daily decline in 15 years. The company's second quarter revenue and adjusted earnings per share fell short of expectations, and the 2024 revenue forecast has been lowered. The Chief Financial Officer of UPS stated that 11500 employees have been laid off, with a target of 12000.
General Electric closed up 5.68%. General Electric's adjusted revenue for the second quarter was $8.22 billion, with an estimated $8.44 billion. I am 100% certain that I will stay at General Electric and not go to Boeing, "said CEO Calp
Spotify closed up 11.96%. The company's second quarter revenue increased by 20.2% year-on-year to 3.81 billion euros, which is basically in line with analysts' expectations; Gross profit of 1.11 billion euros, a year-on-year increase of 45%, slightly higher than analysts' expectations of 1.07 billion euros; Earnings per share were 1.33 euros, higher than analysts' expectations of 1.04 euros. Looking ahead, Spotify expects a third quarter operating profit of 405 million euros, far exceeding the average analyst expectation of 298 million euros.
General Motors closed down 6.42%. Thanks to strong demand for oil vehicles in North America, General Motors' second quarter revenue was $49.77 billion, with a year-on-year increase of 14% in net profit attributable to shareholders. It is expected that the annual net profit before interest and tax will reach $13-15 billion. General Motors' second quarter revenue broke a quarterly record, with adjusted net profit increasing by 37% year-on-year. But the company said it will postpone the Buick electric vehicle originally planned to be launched in 2024 and will delay the opening of the electric pickup truck factory by six months until 2026. The company also attributed its strong profits for this quarter to "strong and stable pricing" and "a greater focus on profit margins and capital efficiency", and plans to reduce the average price of its vehicle models by 1% to 1.5% in the second half of this year.
CrowdStrike rose 1.88%, ending its previous downward trend. Over the past two trading days, the stock has experienced a cumulative decline of 23%. At the same time as the stock fell, "Wooden Sister" bought nearly 60000 shares at the bottom.
Popular Chinese concept stocks generally fell, with the Nasdaq China Golden Dragon Index (HXC) closing down 1.84%. Xiaopeng Motors and iQiyi fell more than 6%, NIO fell more than 4%, Ideal Auto and Bilibili fell more than 3%, Kingsoft Cloud, Vipshop, JD.com, Huya, Ctrip, and Baidu fell more than 2%, Tiger Securities fell more than 1%, New Oriental, Pinduoduo, Alibaba, and NetEase fell slightly, Futu Holdings rose more than 1%, and Tencent Music rose more than 2%.
In other markets, West Texas Intermediate (WTI) futures for September delivery on the New York Mercantile Exchange fell $1.44, or 1.84%, to close at $76.96 per barrel. The Brent crude oil futures price for September delivery fell by $1.39, or 1.69%, to close at $81.01 per barrel.
