Tesla Slides as Robotaxi Event Fails to Enthuse Investors

Good morning. It's October 11th, and today we’ll look at some very positive results from the banking sector as JPMC, Blackrock, and Bank of New York Mellon all posted impressive quarterly results even as Tesla's stock slumped after its much-anticipated Robotaxi event.

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Stocks ended Thursday on a slight decline as inflation data raised concerns about the pace of cooling. However, all three major averages remain on track for modest weekly gains.

Futures

U.S. stock futures are little changed this morning as investors await the release of the Producer Price Index (PPI) and earnings reports from major banks like JPMorgan Chase and Wells Fargo. S&P 500 futures are down 0.04%, Nasdaq 100 futures have slipped 0.1%, and Dow futures are down by 25 points.

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What to Watch

Several big players in the financial sector will report their earnings today. JP Morgan Chase & Co (NYSE: JPM), Wells Fargo & Company (NYSE: WFC), BlackRock (NYSE: BLK), and The Bank Of New York Mellon (NYSE: BK) will announce their quarterly earnings before the market opens.

The economic data front is going to be equally eventful. Several key reports were released at 8:30 a.m. ET, including the Producer Price Index (PPI) for September, Core PPI for September, PPI Year-over-Year, and Core PPI Year-Over-Year figures.

At 9:45 a.m. ET, Chicago Fed President Austan Goolsbee will give opening remarks, followed by the preliminary Consumer Sentiment Index for October at 10:00 a.m. ET, providing insights into consumer confidence.

Automobiles

Tesla Stock Slipping 7% After Bold Robotaxi Announcements as Investors Await Clarity

Tesla shares are dropping by nearly 7% in premarket trading today, while Uber and Lyft shares are climbing by about 4%, signaling limited immediate concern from competitors about the firm’s latest announcements.

Tesla CEO Elon Musk presented bold new products and ambitious goals at Thursday's highly anticipated robotaxi event, promising that Tesla’s Model 3 and Model Y vehicles will operate without driver supervision in California and Texas by next year.

Musk also showcased a prototype of a Cybercab, set for production by 2026 with a price under $30,000, and a Robovan capable of carrying 20 passengers.

Musk also introduced humanoid robots that mixed drinks at the event, suggesting these robots could sell for $20,000 to $30,000 in the future.

However, investors and analysts expressed concerns, seeking more specifics on how Tesla plans to transition from electric vehicle production to becoming a leader in autonomous driving and AI.

Investors are still waiting for details on a widely anticipated mass-market vehicle and further clarity on Tesla's robotaxi business plan.

Though Musk’s vision is ambitious, analysts say significant regulatory hurdles remain, and the company’s AI technology is still trailing competitors like Waymo. Investors are cautiously optimistic about the long-term potential but remain focused on Tesla’s near-term EV sales.

Banking

BlackRock’s Asset Surge to $11.5 Trillion Driven by Private Markets and Strong Inflows

BlackRock Inc. touched a new milestone, reporting a record $11.5 trillion in assets under management (AUM) after pulling in $160 billion in client funds during the third quarter.

The firm saw significant inflows into exchange-traded funds (ETFs) and fixed-income products, with $97 billion going into ETFs and $63 billion into fixed-income overall. This is pushing the total net inflows for the year to $360 billion, surpassing the full-year figures for both 2022 and 2023.

Private market assets also contributed to BlackRock’s growth, with the firm completing its $12.5 billion acquisition of Global Infrastructure Partners, adding $116 billion in private assets.

BlackRock’s strategy to position itself as a one-stop shop for both public and private investments is continuing to pay off, as CEO Larry Fink emphasized the firm’s ability to leverage technology, scale, and global presence for profitable growth.

In addition to strong inflows, BlackRock’s revenue is rising 15% year-over-year to $5.2 billion, while adjusted net income per share rose 5% to $11.46. The firm is also expanding its presence in private credit markets and exploring the potential acquisition of HPS Investment Partners, which could be valued at over $10 billion.

Shares of BlackRock have increased by 18% this year, although they have slightly trailed the broader S&P 500 Index, which is up 21%. In premarket trade, the shares are up by around 1.5% today.

Banking

JPMorgan's Q3 Earnings Top Forecasts, Shares Jump in Pre-Market Trading

JPMorgan Chase shares are rising by nearly 2% in premarket trading today. The bank reported better-than-expected third-quarter earnings.

It posted revenue of $42.65 billion, exceeding analysts’ estimates of $40.85 billion and last year’s $39.87 billion. Net interest income (NII) also increased to $23.41 billion, up from $22.73 billion a year ago.

While profit dipped slightly to $12.9 billion from $13.15 billion, earnings per share (EPS) climbed to $4.37, beating the $3.97 expected by analysts.

Despite rising deposit costs and stalled loan growth due to higher interest rates, JPMorgan is continuing to deliver strong results. Analysts expect that recent rate cuts by the Federal Reserve could help banks reduce deposit costs and drive loan and investment banking growth in future quarters.

Investor attention is also turning to JPMorgan’s succession planning for CEO Jamie Dimon, as the influential leader has hinted at stepping down in the coming years.

Banking

BNY Mellon Beats Q3 Forecasts, Reports Record $52.1 Trillion in Custody Assets

Bank of New York Mellon (BNY Mellon) reported impressive financial results for the third quarter of 2024, showcasing a 22% increase in earnings per share (EPS), reaching $1.50.

When adjusted for notable items, EPS rose to $1.52, reflecting 20% year-over-year growth. Total revenue for the quarter came in at $4.648 billion, surpassing market expectations of $4.5 billion and representing a 5% increase from Q3 2023.

BNY Mellon’s robust performance was driven by growth across its key business segments, including a 14% rise in assets under custody and administration, which reached a record $52.1 trillion, and an 18% increase in assets under management to $2.1 trillion.

The bank maintained a strong pre-tax operating margin of 33% and a return on tangible common equity of 22.8%.

This growth was supported by strategic initiatives such as the transition to a platforms operating model and the acquisition of Archer. BNY also outperformed analysts' EPS forecast of $1.38, reflecting the company’s operational efficiency and focus on fee revenue and net interest income.

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Jet.AI [JTAI] - Last Close: $0.08

Jet.AI's stock is up 31% in premarket trading.

The company announced a $2.4 million registered direct offering on Thursday.

The offering involves selling approximately 26.6 million shares of common stock at $0.09 per share to institutional investors.

This move will provide the company with gross proceeds of about $2.4 million, which will be used for corporate purposes.

The stock surge is likely due to the increased investor interest and the capital infusion, which can potentially support Jet.AI's ongoing operations and growth in the private aviation and artificial intelligence sectors.

The offering is expected to close on October 11, 2024.

American Lithium Corp [AMLI] - Last Close: $0.79

American Lithium is up 18% before the opening bell today.

The company released a shareholder letter, which outlined their strategy and optimism for a recovery in the lithium market.

Despite the sharp decline in lithium prices, the company remains confident in the long-term prospects of lithium, particularly "Made in America" lithium carbonate.

The firm outlined proactive measures, such as cost-cutting and management adjustments, to navigate the current challenging market conditions.

The letter also highlighted American Lithium's focus on advancing large-scale green metal deposits and hints at emerging opportunities, including Peru’s interest in nuclear energy, which could unlock value in their Macusani Uranium Project.

Aehr Test Systems [AEHR] - Last Close: $13.32

Aehr Test Systems' shares are up nearly 15% in premarket trading.

The firm reported strong first-quarter results for fiscal 2025 and reaffirmed full-year guidance on Thursday.

Despite lower revenue compared to the same quarter last year ($13.1 million vs. $20.6 million), the company exceeded consensus estimates.

The positive market reaction is due to optimism surrounding their silicon carbide business for electric vehicles and other applications.

Investors are also expecting continued demand for their FOX WaferPak products, and progress in expanding into new markets such as artificial intelligence processors and gallium nitride semiconductors.

The company also maintained its full-year revenue guidance of at least $70 million.

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Everything Else

• Analysts predict targeted stimulus measures from China’s finance minister, aiming to address weak consumer demand and bolster economic growth.

• Northvolt's strategy shift led to stockpile sales of battery-making materials as the company faces financial pressures and production quality issues.

• Türkiye's current account deficit narrowed significantly, reflecting improved external financing and economic resilience.

• DBRS Morningstar said Hurricane Milton's insured losses are lower than expected, easing concerns for the insurance industry.

• Öhlins Racing joined Brembo as the company acquired 100% ownership for $405 million, enhancing its performance suspension portfolio.

• Vietnamese tycoon Truong My Lan was sentenced to death for fraud and awaits trial verdict on money laundering charges on October 17.

That’s all for today. Thank you for reading. If you have any feedback, please reply to this email.

Best Regards,

— Adam Garcia
Elite Trade Club

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