Morning Toast 18th July


Stocks are on the move after a week that indicated an easing of our inflation emergency, and major banks continue to reap substantial profits. The Federal Reserve's sought-after "soft landing" scenario, which aims to bring inflation under control without plunging the economy into a recession, appears plausible, provided corporate finances don't unexpectedly turn grim during this earnings season.

While the US economy continues to show strength, the situation is quite different in China. The growth of the world's second-largest economy remained stagnant between the first and second quarters, and concurrently, youth unemployment reached a record high last month. In response, President Xi Jinping is likely to take measures to boost China's sluggish GDP.

Stock Spotlight

Wells Fargo raises its price target on Tesla. Here’s what the pros are saying

Ahead of Tesla's (NASDAQ:TSLA) 2Q earnings release and webcast, Wells Fargo has reiterated an Equal Weight rating on the company's stock while revising their 12-month price target to $256.00, up from $170.00.

The electric vehicle maker is set to disclose its 2Q results on Wednesday, July 19th. According to Wells Fargo's analysis, they anticipate Tesla to report an EPS of $0.75, slightly below the consensus estimate of $0.79. The analysis also indicates that the average selling prices (ASPs) for Tesla vehicles are expected to decrease to $46K in Q2, down from $47K in Q1. This decline is attributed to price reductions and a less favourable mix of vehicle trims during the second quarter.

Furthermore, Wells Fargo predicts a quarter-on-quarter decrease of approximately 4.5% in the prices of Models Y and 3, resulting in an overall decline of around 13% for these models.

Stock Spotlight

SpaceX revenue expected to double, soaring to $8 billion

According to sources cited by The Information, SpaceX is expected to experience a substantial surge in sales, potentially doubling its revenue to around $8 billion in 2023. This optimistic projection has generated enthusiasm among select investors, as SpaceX's shares have outperformed other private tech valuations that have recently faced declines.

Recent reports from CNBC indicate that Elon Musk's SpaceX valuation has reached nearly $150 billion. The surge in valuation followed an announcement of a stock sale by existing investors. As per the purchase offer sent by CFO Bret Johnsen, the company has entered into an agreement with new and existing investors to sell up to $750 million in stock at a price of $81 per share. This represents a 5% increase from the previous secondary sale at $77 per share, which valued the company at approximately $140 billion. However, SpaceX has refrained from providing any comments regarding the purchase offer.

Sustainable News

U.S. EPA Launches $20 Billion ‘Climate Bank’ Programs To Curb Climate Change

Under the significant $27 billion Greenhouse Gas Reduction Fund, a crucial component of President Biden's Investing in America Agenda and environmental justice objectives, the U.S. Environmental Protection Agency (EPA) has launched two Notices of Funding Opportunity, amounting to $20 billion. These competitive grant competitions aim to promote clean technology projects, generate well-paying job opportunities, and reduce energy expenses for American families, particularly those in low-income and disadvantaged communities. Simultaneously, they will address the pressing concerns of harmful pollution, safeguarding public health, and taking decisive action on the climate crisis.

Today, EPA Administrator Michael S. Regan, along with Vice President Kamala Harris, will announce the two grant competitions at Coppin State University in Baltimore, Maryland. Also present at the event will be Senator Tom Carper, Senator Ed Markey, Senator Chris Van Hollen, Congressman Frank Pallone, and Congressman David Trone. The event will feature insights from local climate leaders and include speeches on the significance of these initiatives.

Quote of the Day

"I support a 2030 ambition for Europe of at least 55% reduction in CO2 emissions. A cost-effective electrification of the European economy, furthering the use of low carbon electricity and innovative solutions in transport, housing and industrial processes, is not only what is right for the climate, but is also a matter of industrial policy and energy security." — Jean-Bernard Levy, Chairman and CEO, EDF

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