Stock recap and outlook for E.V. Stocks, Energy & precious metal and Major Deals etc.
Stock recap
WEEKLY STOCKS RECAP
IN EV SPACE
EV makers slow demand cautiously.
dramatic car companies’ cautious approach has foreshadowed a dramatic shift in the EV market.
General Motors (NYSE:GM) delayed the manufacturing of its electric pickup trucks on Tuesday, following a wider industry trend. Tesla (NASDAQ:TSLA) also slowed its production ramp on Wednesday.
Mary Barra, GM’s CEO, advised “moderate” EV manufacturing in North America due to a recent drop in consumer demand.
GM and Tesla are not alone in this hesitation. Similar to Ford (NYSE:F), a significant manufacturing factory temporarily reduced shifts for its electric vehicle ramp-up. The corporation has shifted its investments to commercial cars and hybrids.
Hertz (NASDAQ:HTZ) and Porsche (ETR:P911_p) (OTC:POAHY) demonstrate the EV sector’s complexity. Tesla’s recent price reduction have reduced the resale value of electric cars in Hertz’s fleet, prompting a cautious review of the company’s electrification aspirations.
Porsche’s decision to delay Macan electric SUV manufacturing until next year reflects industry issues. Volkswagen’s (ETR:VOWG) (OTC:VWAGY) CARIAD division’s delays in developing critical automative software have hurt Porsche.
BP Pulse signs $100M contract
BP Pulse, the EV charging arm of oil and gas conglomerate BP (LON:BP) (NYSE:BP), announced a $100 million partnership on Thursday to deploy Tesla ultra-fast charging hardware units at strategic sites across its brands starting in 2024.
TravelCenters of America (NASDAQ:TA), Thorntons, ampm, and Amoco, as well as its Gigahub charging stations and third-party locations like Hertz, have planned initial installations in Houston, Phoenix, Los Angeles, Chicago, and Washington, DC.
BP will build and operate these Tesla chargers under the BP Pulse brand. With Tesla’s “Magic Dock,” the chargers will support NACS and CCS connectors.
BP Pulse has erected over 27,000 charge spots as part of its $1 billion US EV charging investment by 2030.
Tesla evades EU probe
Friday’s claims that the EU’s investigation into Chinese government subsidies would not include Tesla gave the EV giant relief. However, Tesla may incur duties related to its recognized subsidies.
Despite Tesla’s prominent export of electric automobiles to Europe, the EU is investigating BYD, SAIC Motor, and Geely.
Geely and BYD, founded in 1986 and 1995, respectively, are privately held firms (Geely’s subsidiary, Geely Automobile Holdings (HK:0175) (OTC:GELYF), is publicly traded, as is Byd’s parent, SZ:002594), a manufacturing conglomerate). SAIC Motor is state-owned. However, all three enterprises may have received greater direct subsidies than multinational brands in recent decades.
Tesla and other Chinese automakers making European vehicles may be investigated if the initial investigation finds unfair competition due to distorted subsidies.
TSLA shares rose 5.8% Monday before reaching $221.03/sh on Tuesday, their weekly high. Week end: TSLA up 2.16%.
Energy & precious metal Settlement and outlook
Oil Market Settlements and Activity
WTI crude for December delivery closing at $85.54 rose $2.33, or 2.8%, to $85.16 on Friday.
Almost the entire week, the US crude benchmark rose 2% or more in one session and then fell. The week finished with WTI down 3.6%.
London-traded Brent crude for the most active December contract closed Friday at $90.44, up $2.55, or 2.9%. The global crude benchmark sank roughly 2% this week.
Technical Outlook: WTI Oil
SKCharting.com chief technical strategist Sunil Kumar Dixit expects WTI to face immediate resistance at $85.50 next week, followed by $86.50 if the war doesn’t affect it.
“Major resistance remains static at $88.30, and that may trigger extended gains to $91,” added Dixit.
Minor positives on WTI’s Daily Stochastics and RSI may suggest temporary advances.
On the other hand, consolidation below $86.50, especially below $88.30, will allow a retest of $83.50 and $82.50, Dixit added.
Weakness below $82.50 can yield $81, while main support is $79.50. Leaving the conflict out.”
Gold Market Settlements and Activity
Gold bulls reached $2,000 an ounce after two months of retreating as investors sought refuge.
December, New York’s most active gold futures contract, closed Friday at $1,998.50 an ounce, up $1.10, or 0.05%.
After settlement, the benchmark gold futures contract closed at $2,016.30, up $18.90, or 0.95%.
Gold spot, followed more by traders than futures, closed at $2,006.38, up $21.49, or 1.1%, from a session high of $2,009.41.
Price Forecast: Gold
Dixit of SKCharting believes spot gold’s next plausible goals are $2,035, $2,055, and $2,080 due to the Middle East war’s geopolitical drive and chart posture.
He suggested any reversal toward the horizontal support zone of $1,990 – $1,980 would be used to cover shorts and re-enter with longs aiming for $2,080.
The current bullish momentum is mainly driven by safe haven attraction due to war escalations, thus any slowing in fighting or war headlines might spark a severe corrections wave leaving major support levels, warned Dixit. Traders should be careful when trading on margin to avoid mistakes.
Natural Gas Market Settlements and Activity
Despite a smaller-than-expected storage increase and fears about a mid-November data embargo on related gas output, US natural gas futures rose 9% on the week, rebounding to the mid-$3 level.
The most active December gas contract on the New York Mercantile Exchange’s Henry Hub fell 1% Friday to $3.440 per mmBtu. Weekly gains were 58.4 cents.
The rally followed the US Energy Information Administration’s 74 billion cubic feet gas storage data for the week ended Oct. 20.
That was nevertheless more than the 61-bcf injection from the same week last year and the five-year (2018-2022) average rise of 66 bcf. It was lower than Wall Street’s natural gas analysts’ 80-bcf build projection.
Gelber & Associates, a Houston energy trading firm, said the EIA’s storage data was 74 Bcf, below the analyst average. The data announcement boosted near-term forward curve contracts like the front-month contract, which have gained significantly since.
The Gelber statement said that most weather forecasts predicted “notably colder temperatures to the Lower 48” states in the coming week, which should improve the gas storage data.
Future natural gas prices
SKCharting’s Dixit said natural gas price consolidation will likely be limited to cover the runaway gap at $3.03 and coincide with the 5-week EMA.
Dixit added momentum buildup from the demand zone may resume the upward comeback, which can gather strength after clearing the 50-week EMA, setting the way for the following leg higher objective marked on the 200-week SMA of $3.78.
Big Deals
Chevron will buy Hess for $53 billion in equity
Last week, Chevron (NYSE:CVX) announced an all-stock deal to buy Hess (NYSE:HES) for $53 billion, or $171 per share, based on its Oct. 20 closing price. Each Hess shareholder will receive 1.0250 Chevron shares for their Hess share, valuing the combined company at $60B, including debt.
Chevron said it wants to strengthen and diversify its portfolio and boost production for the next decade, citing the Stabroek block in Guyana for its high cash margins and low carbon intensity.
Weekly Chevron shares fell 13.5% to $144.35. Hess fell 12.1% to $143.29.
Western Digital falls 9% as Kioxia merger’scrapped’
After Nikkei Asia reported that Western Digital’s proposed merger with Kioxia had been “scrapped” after failing to receive approval from large shareholders SK Hynix and Bain Capital, the stock fell 15.6% intraday Thursday and closed down more than 9%.
This story followed SK Hynix’s opposition to a Kioxia-Western Digital combination, alleging that it undervalues its stake.
Wolfe said, “It doesn’t appear that a deal can be struck without Hynix approval, frustrating efforts for NAND industry consolidation.”
Western Digital shares completed the week at $38.97 after recovering on Friday.
Forward Air wants to end ruinous Omni merger
Forward Air (NASDAQ:FWRD) considered terminating its merger with Omni Logistics on Thursday.
Forward Air shares have plummeted since August’s merger announcement, with important owners including Ancora Holdings rejecting it. Three former Forward Air executives and stockholders sued to stop the merger in September. Forward Air claims Omni breached its merger agreement and will not conclude the deal, even after a judge lifted a restraining order.
Forward Air stock dropped 42% within a week of the August 10 merger announcement and closed at $70.36 on Friday, down 36% from its $110 pre-merger closing price.
More Deals
Roche Holding (OTC:RHHBY) bought Telavant Holdings from Roivant Sciences (NASDAQ:ROIV) and Pfizer (NYSE:PFE) for $7.1B, including a $150 million milestone payment.
This acquisition grants Roche exclusive US and Japanese rights to RVT-3101’s development, manufacture, and marketing. Phase 3 trials of the antibody aim to treat inflammatory bowel disease and other conditions.
EngageSmart (NYSE:ESMT) shares rose over 11% last Monday when Vista Equity Partners, an enterprise software and technology-enabled business investment firm, announced its acquisition. The all-cash deal is worth $4.0B, or $23 per share. Shares closed Friday at $22.67.
Weekly Earnings Calendar
Monday Oct 30
SoFI, McDonald’s, Western Digital, Pinterest, Transocean (RIG).
Tuesday, OCT 31
Advanced Micro Devices (AMD),Anheuser-Busch (BUD), Amgen (AMGN), Caesars Entertainment (CZR), Caterpillar (CAT), First Solar (FSLR), Pfizer (PFE).
Wednesday, NOV 01
Airbnb (ABNB), BP (BP), CVS Health (CVS), Dupont (DD), Estee Lauder (EL), Humana (HUM), Modelez (MDLZ), Norwegian Cruise (NCLH), Qualcomm (QCOM), Yum Brands (YUM).
Thursday, NOV 02
Apple (AAPL), Booking Holdings (BKNG), Carvana (CVNA), Coinbase (COIN), ConocoPhillips (COP), Duke Energy (DUK), Moderna (MRNA), Molson Coors (TAP) Palantir (PLTR) Starbucks (SBUX).
Friday, NOV 03
Bloomin Brand (BLMN), CBOE (CBOE), ominion (D), Fluor (FLR), Monster Beverage (MNST), Restaurant Brands (QSR).
For Details
Must read book about investing – check here
stock recap stock recap stock recap stock recap stock recap stock recap stock recap stock recap stock recap stock recap stock recap stock recap stock recap stock recap stock recap stock recap stock recap stock recap stock recap stock recap stock recap stock recap stock recap stock recap stock