Summary:
- US stock market indices post minor gains on Tuesday
- Coty (COTY.US) tries to recover after yesterday’s major slump
- Tesla (TSLA.US) faces more departures of senior executives
Rally on the global stock markets eased on Tuesday with the European stock seesawing between gains and losses. Moods improved following the interview of Peter Navarro with CNBC. Navarro said that talks are heading in a very good direction but it will take some time until the deal is ready. He also echoed President Trump and said that he hopes the Federal Reserve lowers interest rates.
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2019 was not a good year for Tesla (TSLA.US) shareholders so far. The stock declined over 30% YTD right now. However, share price greatly recovered in June as rumours over good delivery numbers began to surface. The price closed above 50-session moving average (green line) for the first time since late-February yesterday. The ongoing pullback may be just a “classic” retest of the recently broken downward sloping trendline. Source: xStation5
Tesla faces more departures of senior executives
Tesla (TSLA.US) is trading lower today due to reports of executives’ departures. According to the Business Insider report, Steven MacManus, Tesla’s (TSLA.US) vice president for interior and exterior engineering, is set to leave the company. Apart from that, Electrek, the US blog focused on EVs, reported that Jan Oehmicke is departing from its role as chief of Tesla’s European operations. The reports came just days after Peter Hochholdinger, senior production executive, left the company for competitor, Lucid Motors. Departure of Jan Oehmicke may look puzzling as the latest reports hint that Tesla had a stellar quarter when it comes to the European deliveries. However, whether those reports are true or just a rumours will not be known until the release of Q2 results on 24 July.
Coty (COTY.US) more than doubled its valuation throughout the first half of 2019. However, recovery was halted at the 50% Fibo level of last year’s downward move. Nevertheless, even after yesterday’s drop the stock is trading 75% higher YTD. Share price is testing the nearest major resistance at press time - the upper limit of February-May trading range at $11.50. Source: xStation5
Other company news
Coty (COTY.US), the US beauty company, announced a turnaround plan yesterday. While the plan was welcomed by analysts, who said it addresses many of the concerns, it was not welcomed by shareholders, who were thrilled by a vision of $3 billion write-down. However, Citi outlined a few concerns with the plan and decided to downgrade the stock from “neutral” to “sell”. Bank’s analysts said that turnaround may take longer than the company and investors assume as it hints at no revenue growth through 2023.
Pfizer (PFE.US) can be found among Dow Jones winners today after the South African regulator approved joint-venture the company plans to set up with GlaxoSmithKline (GSK.UK). The Competition Commission said that the tie-up is unlikely to significantly affect competition but may have an adverse impact on local companies that manufacture drugs for Pfizer. In turn, the regulator decided to give the deal a nod under the condition that the two companies will continue to use the services of Spechpharm, the South African pharmaceutical manufacturer, for the next 3 years.
S&P 500 movers at 3:54 pm BST. Source: Bloomberg
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