Market Highlights: Tesla’s margins collapse, big announcement on RBA today, and 5 ASX small caps to watch
The ASX is poised to open flattish again on Thursday, tracking similar moves on Wall Street overnight.
After the closing bell, Tesla shares fell 4% after reporting its Q1 results.
Tesla’s revenue of US$23.3 billion was 24% higher than the pcp and met expectations, but its gross profit margins were shocking and well below forecasts.
Tesla reported total gross margin of 11.4% vs 22.4% analysts’ consensus, but has downplayed concern about its recent price cuts, saying its margins are falling “at a manageable rate.”
“Tesla is trying to do what it needs to do keep up the growth and that will be difficult given the current macro backdrop,” said Oanda analyst, Edward Moya.
Netflix initially fell as much as 12% but pared to be down by just 3% at close of trading. Earnings and revenue projections disappointed, and subscriber numbers were well below expectations. The company also said it was cracking down on password sharing.
IBM was up 2% after giving a revenue guidance in line with analysts’ projections.
Regional bank Western Alliance (WA) surged by 24% after saying that its deposits climbed by $2 billion at the end of Q1.
On the data front, the Fed Beige Book noted that US economic activity was little changed in recent weeks, which suggests the Fed could be in a position to remain aggressive with fighting inflation.
“The risks are there and only time will tell if lending volumes and load demand tank, but until they do, the Fed will have to remain vigilant with bringing down inflation,” said Moya.
Crude prices fell another 2% overnight as WTI fell to below US$80 level at US$79.03 a barrel.
Oil prices declined mainly because the US dollar rebounded against major currencies, making bullion less attractive for overseas buyers.
Gold price was down 0.5% to US$1,995 an ounce.
Experts believe that if gold doesn’t recapture the US$2,025 level soon, sellers might easily take over.
Bitcoin slipped 4% in the last few hours to US$29,164, plunging in Europe as some crypto investors decided to dump large positions before New Yorkers got to their trading desks.
Back home, Treasurer Jim Chalmers is about to release an RBA review report later today which could strip the central bank of its interest rates setting power.
In one of the biggest shake-ups in its history, the decision on interest rates could instead be put in the hands of a new, separate Monetary Policy Board.
Chalmers himself commissioned the review last July, and has recently said that he agrees in principle with the 51 recommendations made in the report titled ‘An RBA Fit For The Future’.
SILK Laser (ASX:SLA)
Wesfarmers (ASX:WES) today announced that Australian Pharmaceutical Industries (API), a wholly-owned subsidiary of Wesfarmers, has entered into an agreement with SILK Laser for an indicative proposal to acquire 100% of SLA shares at $3.15 cash per share. The SLA share price closed on Wednesday at $2.42. The SILK Board has granted Wesfarmers up to 30 business days to undertake exclusive due diligence.
Green Critical Minerals (ASX:GCM)
GCM said initial results from petrographic analysis at the Mcintosh Graphite Project have confirmed that 4 out of 6 exploration targets have an average flake size between 75-150 μm, which is the desired flake size starting point to make Spherical Graphite (SPG) for battery anode material. The targets with SPG Battery Anode Potential are Marlin, Marlin West, Threadfin and Cobia. A ~10,500m RC drilling program is on track to commence in May 2023 to verify the exploration targets.
Imugene announced positive imaging data on its oncolytic virotherapy candidate, CHECKvacc (CF33-hNIS-antiPDL1), which was presented at the AACR Annual Meeting 2023 in Orlando, Florida overnight. Dr Jamie Rand, an assistant professor in the Division of Breast Surgery at the City of Hope’s Department of Surgery, presented the abstract titled “hNIS imaging data from a first-in-human trial of the oncolytic virus CF33-hNIS-antiPD-L1 in patients with triple negative breast cancer”.
SciDev secured a $3.15m contract with Cleanaway Waste Management for the civil design and construction of a water treatment plant to treat per- and poly-fluoroalkyl (PFAS)-impacted wastewater in Victoria. The work will be delivered over six months with revenue from the project expected to commence Q4 FY23. SciDev will commence preliminary works immediately, with the plant to be commissioned in November 2023.
Siren Gold (ASX:SNG)
Siren announced a Maiden JORC (2012) Mineral Resource Estimate (MRE) for the Big River Gold Project in New Zealand. The Big River gold project consists of six identified gold mineralised shoots across more than 500m of strike, with potential to discover additional high-grade shoots. A Maiden Resource of 105koz at 3.94g/t Au was defined from two of these six shoots.