4:15pm: Tesla zooms ahead
US stocks were mixed at Thursday’s closing bell, with a surge in electric vehicle maker Tesla seeing the Nasdaq lead the gains.
Tesla added almost 22% at $260, boosting the Nasdaq by 0.8% to 18,415 points while the S&P 500 added 0.2% at 5,809 points.
The Dow Jones, on the other hand, retreated by 0.3% to 42,374 points.
3:25pm: Yields on the rise
Yields are on the rise, with price action in Treasury markets over the last month "a classic example of the popular 'buy the rumor sell the news' maxim, according to Adam Turnquist of LPL Financial.
"The repricing of market expectations for rate cuts closer to Fed forecasts has been part of the story behind the rebound in yields, but not the only factor," Turnquist said.
"Over the last month, inflation ticked higher while most economic data came in better than expected, triggering a lot of “no landing” narrative headlines."
Concerns about increasing US deficits and the outcome of next month's presidential election could also be driving the rise in yields, Turnquist added.
"Betting market odds for a former President Trump victory in November are tracking very closely to 10-year Treasury yields. In contrast, the odds for Vice President Harris to win are moving in the opposite direction of rates."
2:15pm: Earning seasons snapshot
The S&P 500 found its footing in early afternoon trading, pushing beyond opening levels to trade 0.2% higher.
Over 20% of the S&P 500’s market capitalization has reported third-quarter earnings, with revenue growth expected at 4.3% and EPS growth at 3.2%, according to UBS stats.
Earnings are exceeding estimates by 5.7%, with 72% of companies beating projections. EPS growth is on track for 6.3%, assuming typical trends in estimate revisions. In the next five trading days, 130 companies (20.6% of the S&P 500’s market cap) will report, including Amazon, Ford, Visa, and Alphabet.
1:05pm: New home sales climb in September
Lost in the slew of earnings reports over the last 24 hours was the new home sales data released Thursday morning.
In September, new home sales rose by 4.1% to 738,000 at a seasonally adjusted annualized rate, surpassing the consensus estimate of 0.6% and Comerica's forecast of a 2% increase, marking one of the highest sales rates since early 2022.
The median price of new homes remained stable at $426,300, compared to $423,100 a year earlier. Additionally, the number of new homes listed for sale increased to 470,000, the highest level since March 2008.
Bill Adams, Chief Economist for Comerica Bank, called it "a good housing market for a two-handed economist."
"On the one hand, demand stinks. On the other hand, supply stinks, too," Adams commented.
"The housing market was still stopped up by high interest rates in September. It takes time for lower mortgage rates to translate into foot traffic at open houses and then closed sales.
"With housing supply increasing, prices rising more slowly, and mortgage rates gradually coming down, 2025 will likely be a better year for homebuyers and existing home sales, and largely stable for new home sales and builders."
12:00pm: Pre-election weakness hits markets
Tesla's earnings have failed to boost the broader US stock market.
By midday, only the Nasdaq was still in the green. The Dow had slipped underwater by 260 points, or 0.6%, while the S&P 500 was trading near the flatline.
“Perhaps unsurprisingly, Tesla’s earnings have not been enough to breathe life into the wider US stock market," commented Chris Beauchamp at IG.
"Instead, we have seen a trimming of gains all day, as the traditional pre-election weak period sets in. This should persist at least until the end of the month, and probably until after the election, when history suggests we see stocks resume their march higher.”
11:00am: Tesla charged for significant growth
Bank of America raised Tesla’s 2024 EPS estimate from $2.20 to $2.45, reflecting strong margins and operational execution. They also increased the price target from $255 to $265.
"The bottom-line was that Tesla is charging up for the next wave of growth," analysts wrote following the electric car company's 3Q earnings.
Looking ahead, the bank said Tesla is positioned for significant growth in 2025, including the launch of new products like the Cybertruck and a ride-hailing app, alongside expanded energy storage business and Semitruck production.
However, management cautioned that the margin strength seen in Q3 is unlikely to be repeated in Q4.
9.52am: S&P 500, Nasdaq gain as Tesla soars
The Nasdaq and S&P 500 enjoyed brighter starts on Thursday morning as a surge in Tesla Inc (NASDAQ:TSLA) shares following results helped fuel gains.
Tesla jumped 17.2% as the market opened following Wednesday evening’s update that profit had hit US$2.2 billion in the third quarter.
This helped lift tech stocks, prompting a 0.4% gain and 0.1% rise for the Nasdaq and S&P 500 respectively as the market opened.
The Dow Jones remained downtrodden however, with a 0.3% drop as the market opened placing the index on course for a fourth straight daily drop.
7.45am: Mixed start seen
Wall Street was set for a mixed start on Thursday as the S&P 500 looked on course to break a three-day losing streak.
Futures had the S&P 500 up 0.4% ahead of the open, while the Nasdaq was seen jumping 0.8%, on the back of gains for tech stocks after Tesla Inc (NASDAQ:TSLA)’s earnings on Wednesday evening.
Third-quarter results showed profit jumped to US$2.2 billion from US$1.9 billion a year earlier, sending Tesla shares up 13% in pre-market trading on Thursday.
The Dow Jones looked set to fall by 0.2% in the meantime, placing the index on course for a fourth successive daily decline.
This came as “market anxiety” was being “exacerbated by growing expectations of Donald Trump's potential return to the White House,” Tickmill Group partner Patrick Munnelly commented.