China’s Q3 GDP Growth Shows Signs Of Recovery
China’s economy grew at a faster than expected clip in the third quarter, while consumption and industrial activity in September also surprised on the upside, suggesting the recent flurry of policy measures is helping to bolster a tentative recovery.
Nasdaq Ends On Higher Yields
The Nasdaq ended lower while the Dow and S&P 500 were nearly flat yesterday as Treasury yields rose and shares of chipmakers fell after the Biden administration said it planned to halt shipments of advanced artificial intelligence chips to China.
Oil Prices Edged Higher Prior To Biden’s Middle East Trip
Oil prices edged higher yesterday as investors wait to see if U.S. diplomatic efforts and a trip by President Joe Biden to Israel will prevent the conflict in the Middle East from escalating further. Brent crude futures settled up to USD 89.90 a barrel while U.S. West Texas Intermediate crude (WTI) was unchanged at USD 86.66.
Today’s News
Conflicts in the Middle East may have sent ripples in various industries throughout the world, particularly in the oil sector, but the electric vehicle (E.V.) trade wars are here to stay. E.V. manufacturers have taken the opportunity to ramp up production to transition towards a zero-emissions future while tackling the uncertainty of current fuel prices head on.
On the other hand, the United Auto Workers’ (UAW) prolonged strike in the U.S. and the European Union’s (E.U.) launch of an investigation into Chinese electric vehicle subsidies may seem like unrelated events. But both reflect angst about the carmakers’ pivot away from fuel-guzzlers and volt-eaters to the existential questions about competitiveness and labor that come with it. And why things may escalate further.
German Chancellor Olaf Scholz played down fears of a highly probable trade war that was triggered by the European Union’s anti-subsidy investigation into Chinese electric vehicles, while making a strong case for globalized markets with a level playing field for all participants.
Other related news include:
Rivian CEO Addresses Financial Health
Rivian’s (RIVN.O) earlier than expected bond issuance this month was aimed at strengthening the electric-vehicle maker’s balance sheet before geopolitical risks make borrowing costlier and does not reflect concerns about its operations, its CEO said yesterday.
Following a USD 1.3-billion capital raise in March, Rivian said it had enough money to last it through 2025. But a revised statement claiming that it would issue USD 1.5 billion this month had sparked concerns among investors and some suppliers about the company’s financial health which resulted in plummeting shares.
BYD Eyes Double In Q3 Net Profits
China’s electric vehicle giant BYD (002594.SZ) said it expects a third-quarter net profit to as much as double, crediting its achievement to robust sales and effective cost control implementations.
The Shenzhen-based company forecasts net profit for the July to September period at between 9.55 billion yuan (USD 1.31 billion) and 11.55 billion yuan (USD 1.58 billion), an increase of 67% to 102% from 2022.
Tesla Trails Behind The Competition For Q3
Tesla’s (TSLA.O) margins are likely to drop in the third quarter and take a bigger hit in the last three months of 2023, leaving investors fretting about more price cuts needed to boost demand.
The electric automaker has given up some profitability to drive sales of its aging vehicle line-up in a high-interest rate environment and amid competition from China’s BYD (002594.SZ), (1211.HK).
