US Open: Mixed sentiments on Wall Street 📊Tesla down 5.5% amid disappointing deliveries

• Wall Street opens in mixed mood; oil and VIX gain, US100 trades flat and erases some of the declines
• Humana (HUM.US) shares lose nearly 22%, trading 60% below peaks; Nike (NKE.US) loses 8% after results
• Tesla (TSLA.US) loses 4.5% after quarterly delivery estimates missed forecasts; Chinese ADRs continue to rise
• Dollar strengthens after stronger-than-forecast ADP report; 10-year US Treasury bond yields rise 6 bps, above 3.8%
• Shares of Argentine fintech and e-commerce conglomerate MercadoLibre (MELI.US) lose nearly 5% after JP comments. Morgan

Today's U.S. labor market data came in stronger than expected and the change in employment in the U.S. private labor market came in at 143,000 jobs versus 125,000 forecast and 99,000 previously, somewhat 'calming the markets' and suggesting that the health of the U.S. economy remains rather solid. The markets' attention, however, is still focused on oil, which is gaining almost 2% today, and the Middle East, where the potential for a broader escalation and war between Israel and Iran remains, although the IDF is holding off on a direct military response toward Iran for the moment. Wall Street is struggling to return to growth after yesterday's sell-offs.

The auto sector is trading under pressure today, where Tesla and Ford stand out; Humana shares are losing nearly 22%. Source: xStation5

US100 chart (M15)

Looking at the US100 contract, we see that a strong support zone has built up around 19,900 points. The key task for the bulls in the short term is to get back above 20,000 points.

Źródło: xStation5

News from the companies

MercadoLibre (MELI.US) drops 4.5% today, as top Latin American company has been given a neutral rating at JP Morgan, revised downwards from its previous ‘outperform’ rating, as the bank does not see much upside potential, following the recent rise in share valuations.

• The bank believes the credit card business will remain under pressure, dragging on net margins. JP Morgan estimates that the so-called ‘net-interest margin after losses’ (NIMAL) from credit cards will be slightly negative in the initial phases of deployments and will fall from 36% in 2023 to 24% in 2027.
• Analysts also point out that the company will see an increase in costs due to logistics, which has been heavily developed in recent times. JP. Morgan, assumes that Mercado's effective tax rate will increase to 34% from 20% currently, and the company could face a negative currency effect.

Tesla's (TSLA.US) Q3 deliveries estimate was 462,890, the estimate was 463,897. The company's shares are losing almost 5%, following the rather disappointing results; production came in well above market estimates and deliveries marginally below forecasts disappointed investors, raising some concerns around demand for electrics.

• Production 469,796 vehicles vs 465,828 forecasts
• Model 3/Y Deliveries 439,975, vs 435,920 forecasts
• Other models Production 26,128, vs 17,640 forecasts

Tesla's multiplier valuation is still very challenging, with a price/earnings ratio above 120, declining earnings growth and mixed revenues. Net margins have fallen into the vicinity of 5% and do not justify such a high premium in the company's valuation, although as Musk says ‘investors in the company should look to the distant future’, where the company intends to dominate the humanoid industrial robot manufacturing sector and deploy self-driving systems, improving margins. Nevertheless, a foward p/e ratio in the region of 80 somewhat deters fundamental investors.

Source: XTB Reserach, Bloomberg Finance L.P

Source: XTB Resarch, Bloomberg Finance L.P.