Stocks were mostly flat yesterday, but they’re taking on water this morning after disappointing “Big Tech” earnings. Gold, silver, and crude oil are modestly higher along with Treasuries, while the dollar is down a bit.
Shares of Tesla Inc. (TSLA) are taking it on the chin after the Electric Vehicle (EV) maker laid an egg in the second quarter. Adjusted earnings collapsed more than 40% year-over-year to $1.8 billion, or 52 cents per share. Analysts expected EPS of 61 cents. Price cuts and slumping sales contributed to the miss.
CEO Elon Musk did try to rally investors by promising the company would release automated robotaxi news in October. He also reiterated his long-term vision that fully electric transportation isn’t just coming to the roadways...but the seas and skies, too. TSLA shares were down 0.8% year-to-date heading into the numbers, and they shed another 10% in early trading.
TSLA, GOOGL 5-Day % Change
(Extended Hours Included)
Source: Yahoo Finance
Alphabet Inc. (GOOGL) also lost some steam after reporting greater-than-expected spending on Artificial Intelligence (AI) initiatives in the second quarter. The search engine giant said capital spending climbed to $13.2 billion in Q2, a billion more than analysts were forecasting. Still, sales and EPS excluding certain items both beat estimates. Strong results in the Google Cloud division and core search operations helped pad the numbers.
Elevated mortgages rates and high home prices combined to undercut the spring selling season this year. The National Association of Realtors reported existing home sales dropped another 5.4% in June, the fourth monthly decline in a row. Meanwhile, the median price of a used home rose more than 4% year-over-year to an all-time high of $426,900. Housing affordability is hovering around its worst level since the mid-1980s – though rising supply in some regions could slow price growth later this year.
