Monday, April 26, 2021
Last week, market indexes closed down despite strong Q1 earnings results from early-reporting companies. This week brings us the biggest period of earnings reports yet this quarter, including
Microsoft
MSFT
,
Apple
AAPL
, Google parent
Alphabet
GOOGL
and
Amazon
AMZN
, among nearly 900 other companies reporting. At this stage in Monday’s pre-market, the Dow looks to open +50 points, the Nasdaq is -30 and the S&P 500 is flat.
Durable Goods Orders
for March bounced back, as analysts had been expecting, but not nearly by the magnitude they were looking for: +0.5% was less than a quarter of the $2.2% expected, up from an upwardly revised -0.9% from February.
Boeing
BA
purchase cancellations may have a bit to do with the discrepancy: ex-Transportation goods orders, we see this figure bump back up to +1.6%.
Core Capital Goods Orders
— non-Defense, ex-Aircraft (a proxy for “normal” business investment) — swung to a positive mirror image +0.9% from the -0.9% reported for the previous month. Shipments came in at +1.3%. Mitigating factors aside, these figures are simply not as robust as many on the Street had been looking for. Perhaps we’ll need to wait for April numbers a month from now to be exhilarated by Durable Goods growth?
Sparking off the big names in this week’s earnings parade,
Tesla
TSLA
kicks things off after the closing bell today with its Q1 results. The $700 billion market-cap company — more than 4x Ford, GM and Chrysler parent Stellantis combined — is expected to fetch 79 cents per share on $9.92 billion in quarterly sales. These represent year-over-year gains of 216% and 66%, respectively.
Beating earnings estimates is by no means a lock for Elon Musk’s EV leader: in 6 of the past 12 quarters, the company actually missed expectations on the bottom line. That said, when Tesla does outperform, it tends to do so on a big scale. Take Q1 2020’s 663.6% beat, for instance. In fact, even with a miss on Q4 earnings, the trailing 4-quarter average is a positive 309%.
The questions Tesla’s report today will help answer is simple, and twofold: 1) Can its auto-growth margins continue apace? China has been a terrific growth engine for the company; can this be relied upon to overdeliver for another quarter? and 2) How is the Gigafactory performing? After all, this is where the real value is for Tesla, not simply its auto manufacturing. What is the output from its lithium battery facilities to this point. Clean energy is enjoying an emergence currently: how has Tesla capitalized thus far?
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