Research Market strategy
By Swissquote Analysts
Published on 27.07.2021
Morning news

Tesla Quarterly Profit Soars to Record

Topic of the day

Tesla Inc.'s quarterly profit soared to record levels as the car maker largely evaded the effects of a global chip shortage that has constricted the global auto industry. The company on Monday reported revenue of roughly $12 billion for the period ended June 30, nearly double the year-ago period, and a profit of $1.1 billion, its eighth sequential quarter in the black. Wall Street expected Tesla to report roughly $11.4 billion in revenue and around $600 million in profit, according to analysts surveyed by FactSet. The Silicon Valley electric-car maker produced more than 206,000 vehicles in the second quarter, more than doubling its output from the year-ago quarter, when the rise of the Covid-19 pandemic limited production and consumer purchasing. Global auto sales have cooled somewhat during 2021 amid a shortfall of semiconductors. Many auto makers, including Ford Motor Co. and General Motors Co., have been forced to idle assembly plants over supply constraints, squeezing vehicle inventories and pushing up prices.

Swiss stocks

The Swiss stock market ended trading at the beginning of the week with markdowns. The SMI lost 0.7 per cent to 12,050 points. Among the 20 SMI stocks, there were eleven losers and nine winners. 28.32 million shares were traded (previously: 27.76 million). After Lonza presented convincing half-year figures on Friday and the share marked an all-time high, investors now took accumulated profits. The share fell by 2.8 per cent and was thus the day's loser. Geberit (-1.5 per cent) and Givaudan (-1.4 per cent) also took profits – also after reaching record highs. The SMI was also weighed down by the index heavyweights Nestle (-1.1%) and the two pharmaceutical giants Novartis (-1.3%) and Roche (-0.8%). Meanwhile, banking stocks did well: Credit Suisse gained 1.8 per cent and UBS 1.6 per cent. Luxury stock Swatch was up 0.8 per cent. Shares in competitor Richemont rose 0.9 per cent. ABB advanced 0.1 per cent.

International markets


The European equity indices ended Monday's session in mixed order, with investors hesitating at the start of a week that will be marked by numerous corporate results on both sides of the Atlantic and by the Federal Reserve's (Fed) monetary policy meeting. The Stoxx Europe 600 index lost 0.1% to 461.1 points. In Paris, the CAC 40 and SBF 120 rose 0.2% and 0.1%, respectively. In Frankfurt, the DAX 30 fell 0.3% and the FTSE 100 in London gave up 0.03%. The German business sentiment worsened in July amid an increase in coronavirus infections and supply woes, missing forecasts for an increase. The Ifo business-climate index came in at 100.8 points in July compared with the 101.7 points registered in June, according to data from the Ifo Institute released Monday. The reading missed a forecast from economists polled by The Wall Street Journal, who expected the index to increase to 102.5. LVMH Moet Hennessy Louis Vuitton SE’s earnings rose sharply in the first half as sales jumped by more than half on the year, driven by the core soft-luxury division. The French luxury-goods giant said Monday that it made an operating profit of 7.63 billion euros ($8.98 billion) in the six months to end-June, nearly fives times as much as the previous-year period, and some 44% higher than in the same period of 2019. Sales increased to EUR28.67 billion from EUR18.39 billion previously. Koninklijke Philips NV on Monday launched a 1.5 billion euro ($1.77 billion) share buyback as it reported a fall in second-quarter net profit after booking a provision against a faulty component used in some sleep and respiratory-care products, as previously flagged. The Dutch health-technology company backed its full-year guidance. It expects to deliver low-to-mid-single-digits comparable sales growth for 2021.

United States

U.S. stocks rose slightly Monday to set closing highs ahead of a busy week of earnings from technology companies. The Dow Jones Industrial Average added 82.76 points, or 0.2%, to 35144.31, after the blue chip index on Friday closed above the 35000 milestone for the first time. The S&P 500 rose 10.51 points, or 0.2%, to 4422.30 and the Nasdaq Composite added 3.72 points to 14840.71. All three indexes set records for a second consecutive session. Aon PLC and Willis Towers Watson PLC abandoned a more than $30 billion tie-up to create the world’s largest insurance broker, deciding it wasn’t worth pursuing in the face of Justice Department opposition to the merger. The DOJ filed a lawsuit against the deal last month, the first big test of the Biden administration’s more muscular antitrust policy. The suit, filed in a federal court in Washington, said that the proposed merger would lead to higher prices and reduced innovation for U.S. businesses, employers and unions that rely on their services. In a statement, U.S. Attorney General Merrick Garland called the decision “a victory for competition and for American businesses, and ultimately, for their customers, employees and retirees across the country.” Shares of Lucid Group climbed 11% in their first day of trading on Monday after the electric-vehicle company completed a blank-check merger ahead of plans to launch production later this year. Lucid stock closed Monday at $26.83. Shares of Churchill Capital Corp. IV, the special-purpose acquisition company with which Lucid merged, ended trading at $24.25 on Friday. The companies announced the SPAC deal in February amid a wave of investor enthusiasm for blank-check mergers, which allow businesses to go public through combinations with shell companies while avoiding a traditional initial public offering. The transaction injected $4.4 billion into Lucid on terms that valued the company at $24 billion.


With the exception of Hong Kong, the mood on the stock exchanges in East Asia and Australia is friendly on Tuesday. The Nikkei index in Tokyo gained 0.5 per cent to 27,985 points, with similar gains in Sydney and Seoul.


In the U.S. bond markets, the yield on the 10-year Treasury note ticked lower to 1.276% from 1.286% Friday.


UBS lowers the Easyjet target to 1.025 (1.125) p – Neutral
UBS lowers the Siemens Gamesa Renewable target to 25 (33) EUR – Neutral
UBS rises the Intesa Sanpaolo target to 2,80 (2,70) EUR – Buy

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