Breakfast Bites - Thu Apr 20, 2023

Rise and shine everyone.

The big news this morning is Tesla down over -7% on disappointing earnings. Automotive GMs ex-regulatory credits came in at 19% vs the 20%+ the company has previously discussed. Free Cash Flow also came in much lower than expected at $441m, down from $1.4B last Q. Inventories are also piling up which may suggest that Tesla has a demand problem. On the conference call, Tesla discussed focusing on moving volume instead of pricing, and discussed favorable monetization opportunities from FSD.

US Futures are down, along with US Dollar, Oil, Bitcoin and Rates. Gold is off its lows from Wednesday. The yield curve inverts further at -0.649%.

Asia and Australia

• Asian markets ended mostly lower Thursday. Greater China ended mixed with mainland benchmarks lower but Hong Kong slightly higher despite falls in several EV makers. Declines in Taiwan and South Korea, Southeast Asia and India also seeing a down day. Japan's Nikkei slightly higher while its Topix was flat. Indonesia closed for a holiday. European equity markets lower.

• TSMC flags weaker demand and higher inventory, still believes industry passing through bottom of cycle

• Alibaba's grocery arm gears up for Hong Kong IPO

Europe, Middle East, Africa

• European equity markets lower.

• ECB's Schnabel says elevated uncertainty makes it hard to predict outcome of coming meetings

• Deutsche Bank plans to cut jobs at executive board, infrastructure and private banking business

• German producer prices rose 7.5% y/y vs. 9.8% expected and 15.8% prior.

The Americas

• Biden rejects House Speaker McCarthy's debt-ceiling proposal, calls on GOP to drop threat of default

• IBM Q1 profit beats expectations, signaling demand for IT services is holding up

• Latest Fed Beige Book says activity little changed, but outlook deteriorated in two districts

• NY Fed President Williams says inflation is still too high, Fed will act to slow it

• Ratings firms on track to cut most US corporate bonds to junk since early part of pandemic

• Rebound in deposits at Western Alliance Bancorp adds to signs banking sector is stabilizing

Calendars

(news taken from Reuters, FT, Bloomberg; Calendar from Trading Economics)