Tesla nears $500BN market cap
Markets reacted positively to outgoing President, Donald Trump reportedly saying he had recommended the General Services Administration, which helps transition to the new presidential regime, “do what needs to be done with regard to initial protocols”.
The news helped calm fears about a disorderly handover of power to incoming President Joe Biden.
Vaccine news also continues to influence markets.
eToro analyst Adam Vettese says, “AstraZeneca and the University of Oxford announced that their coronavirus vaccine is up to 90% effective, adding a third vaccine to the ones already announced by Pfizer and Moderna.
“The latest pair provided more data than Pfizer and Moderna, and revealed an average efficacy of 70%, depending on the dosages given and time between doses. Crucially, AstraZeneca’s vaccine can be stored at refrigerator temperature, rather than requiring the extreme cold storage that poses a logistical challenge for the Pfizer and Moderna vaccines.”
US markets closed higher in reaction, with the S&P 500 up 0.5% yesterday, before shares in Asia followed suit, with the Japanese Nikkei up 2.5% and Hong Kong’s Hang Seng up 0.1%.
Big news for Tesla is having an impact on that company. Tesla boss Elon Musk plans to build the world's largest battery-cell factory at the group's electric car plant near Berlin. It will be the first in Europe and is expected to churn out 500,000 Model 3 sedans and Model Y SUVs per year.
“Tesla’s share price passed the $500 milestone for the first time, pushing its market cap close to $500BN,” Vettese said. “The leap came after analysts at Wedbush raised their bull-case price target on the stock to $1,000. The firm highlighted that currently, 3% of all auto sales are electric, a number it expects to more than triple to 10% by 2025.
eToro’s stocks to watch for the day
Best Buy: Electronics retailer Best Buy has gained 39% this year, and more than 64% over the past 12 months, as mass working from home has led to a surge in demand for laptops, monitors and other consumer electronics. The firm delivers its latest quarterly earnings update today, just days ahead of Black Friday, a critical day in the retail calendar. Analysts are expecting the company to deliver an earnings per share figure of $1.71, up on their expectations from a few months ago. Currently, analysts are split between buy and hold ratings on the stock.
Dell Technologies: Similar to Best Buy, Dell has climbed 35% this year. The company will deliver its third-quarter earnings on Tuesday, with PC and server sales in focus, along with a proposed spring-off of the company’s 81% stake in cloud software firm VMWare. While business spending on computer equipment has been hurt by the pandemic, there is huge demand for servers from cloud providers. Investors will also be looking at how sales have stacked up versus Hewlett Packard, which reports earnings on the same day. Wall Street analysts are split between buy and hold ratings on the stock.
Autodesk: Software firm Autodesk provides products for industries including engineering, architecture and product design, with Tesla one of the users of its services. The company’s share price is up 40% over the past 12 months, taking its market cap past the $50BN mark. Autodesk delivers Q3 earnings on Tuesday, with the firm’s progress in cloud-delivered software, and whether it has been hurt by reduced business spending key points to watch. Currently, 14 analysts rate the stock as a buy or overweight, four as a hold and two as an underweight or sell.
In other trading news
Chris Beauchamp, Chief Market Analyst at IG says, “Equities are making further gains in trading on Tuesday morning, with the FTSE 100 up 50 points and US futures looking brighter too.
“Stocks continued in their broadly positive frame of mind on Tuesday, making steady gains after another good session in Asia overnight and a US trading day that saw a late rebound on news that Donald Trump was finally allowing at least part of the transition to go ahead.
“Signs of movement in the US political deadlock have combined with the steady drip of vaccine news to underpin a market that has yet to breach the highs seen earlier in the month.
“But the trickle of good news stories has helped to hold markets near to those highs, leaving them well-placed to push higher into December.
“A fall in France’s business climate index reminds investors that we are not out of the woods yet, although the resilience of the manufacturing reading provides hope that the overall global economy is holding up relatively well.
“Compass Group had already seen its shares rally in November thanks to the vaccine news, and after a period of consolidation annual results have given the stock a boost in early trading.
“The shares should rally further as the focus shifts from lockdowns to reopening around the globe, driven both by vaccines and the arrival of spring which should make it easier to keep infection rates under control.
“After hitting a four-and-a-half low in March and then moving sideways throughout the summer it looks like Compass has rediscovered the momentum that made it such a winner over the past ten years.”
S&P 500: +1.62%
FTSE 100: + 1.55%
DAX: + 1.26%
CAC 40: + 1.21%
Asia Dow: + 1.24%
Nikkei 225: + 2.50%
Hang Seng: + 0.39%
ASX 200: + 1.26%