Tesla and GM earnings preview, small modular reactors: Catalysts

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Seana Smith News

Catalysts,Michael Kantrowitz,Madison Mills

Monday's trading day shifts into high gear. To guide investors through the first full trading hour of the day, Seana Smith and Madison Mills break down the...

his forecast for market valuations amid third quarter earnings season.Welcome to catalyst I John Smith alongside Madison Mills, 30 minutes into the US trading day.First up Goldman Sachs saying the party is over warning that the S and P 500 decade of big gains, it could be coming to an end break down the outlook for us equities going forward.

And they talk about that concentration leading to a lot of the over 20% rally that we've seen over the last year here.But they say that a broadening out while they do expect that to happen, clearly, they don't expect it to be enough to lead to those broader gains, which I think it's fascinating given that they do expect more growth in something like the market cap weighted benchmark index rather the equal weight at S and P, then the market cap waited index.

And I think it also just signals the fact that investors potentially if this call is right, certainly do have to adjust this new normal. I'd be concerned about macro catalysts that have historically consistently led to lower valuations such as a ri a sharp rise in interest rates, a sharp rise of inflation or a sharp rise in the unemployment rate.I think we're largely there because there's really little concern of those three macro variables that I just mentioned.

So, you know, I I the the the broad consensus uh for the market today and the economy is clearly a soft landing, a lot of rate cuts and a pretty good earnings growth next year.Or the 10 year yield would probably have to get near about 4.5% for investors to start really worrying about uh higher interest rates and start extrapolating those.

The company also tapping former Morgan Stanley Ceo James Gorman to replace the Nike executive chairman, Mark Parker as the company's next chairman starting in January.And now you've been digging into this story and of course, there's lots to talk about maybe who that successor is going to be.The company is publicly given for pointing a successor to current Chief Bob Iger Wall Street had expected Disney to signal a placement for I as early as next year.

She was hand selected by I A CEO in 2020 but was Ted from the position in November 2022 after less than three years on the job. But it's interesting given what we have seen with UPS obviously over the course of the last five days here on your screen, you can see down about 8/10 of a percent.I just want to pull that up to give folks a sense of the context here because they have been struggling over the past year down about 15%.But it's interesting given that Barclays decision, it was impacted by fedex recent results.

So that immediate impact what that could have, what that could all mean for UPS is something uh that could be a challenge and something to certainly note on that upcoming earnings call. So whether or not that's summing up a customer service type of call or, or submitting tickets uh automatically following that is these mundane type of tasks that they are then going to be able to potentially outsource, I guess you can say or, or do uh just uh through A I which would then free up the worker you think to maybe do more tasks that they don't necessarily have time to do you and I do creative.

This is what we saw back in the late eighties when the internet started that, you know, there was a small moment in the Department of Defense and then gradually it reached the commercial stage.But what we saw during that nearly 10 to 20 year phase was new business models get created.Vivek pointing to some of the things that other analysts point to as the bearish signals for A I moving forward, comparing it to that uh tech bubble that we saw heading into the early two thousands here.

He also mentioned the results that we got out from TS MC last week, which certainly helped change a bit of the narrative, we did see a sell off earlier in the week on the heels of a S MLS disappointing guidance. So I think what investors are asking themselves is whether or not earnings are really going to introduce or help reinvigorate some of that lost confidence that we've seen on the heels of the Robo Taxi event.I think there is what Tesla is doing right now, which is its current automotive business then, what it's going to do in the next year, next two years.

 

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