Coffee With Greta: Tesla Backs Away from China
DJIA Futures: +257 (+0.8%)
SPX Futures: +37 (+0.9%)
NASDAQ Futures: +145 (+1.2%)
Good morning friends!
Futures are higher as the market looks to snap a 3-week losing streak.
Let’s get right to it!
Tesla Wants to Build Lithium Refinery for EV Batteries in Texas
Tesla (TSLA) shares are up 1.4% in premarket trade after the electric automaker revealed plans to build its own lithium refinery in Texas.
In its application with the Texas Comptroller’s Office, Tesla said the plant would be focused on developing “battery-grade lithium hydroxide”.
It would be the first plant of its kind in the U.S.
Tesla said it would process “raw ore material into a usable state for battery production” at the facility.
That lithium hydroxide would then be sent to Tesla battery factories.
The move is an effort to reduce costs as the price of lithium has surged 120% this year.
It would also reduce Tesla’s reliance on China for its supply of lithium.
China currently controls more than half of the world’s lithium processing and refining while the U.S. controls just 1%.
DocuSign Rallies on Earnings Beat
DocuSign (DOCU) shares are surging 15.1% ahead of the open after better-than-expected fiscal Q2 results and strong guidance.
The e-signature company reported adjusted earnings of $0.44 per share on $622 million in revenue.
That beat analysts’ expectations for adjusted EPS of $0.42 on $602 million in revenue.
The CEO said, “These results reflect the focus and dedication of our team on execution during this transition period, with a stronger foundation in place to deliver in the second half of the year.”
The company forecast fiscal Q3 revenue between $624 million and $628 million vs analysts’ expectations for $625 million.
DocuSign called for $2.47 billion to $2.482 billion in full-year revenue, in line with its previous outlook.
RH Tops Earnings Expectations, Trims Outlook
RH (RH) shares are up 1.3% in premarket trade after beating Q2 expectations but trimming its full-year outlook.
The luxury furniture and home-goods retailer reported adjusted earnings of $8.08 per share on $992 million in revenue.
That was better than analysts’ expectations for adjusted EPS of $6.71 on $969 million in revenue.
But RH said it expects fiscal 2022 sales to decline between 3.5% and 5.5% as the housing market slows.
The CEO said, “Our expectation is for continued softening in our business trends during the remainder of fiscal 2022 as a result of ongoing weakness in the housing market over the next several quarters and possibly longer due to the Federal Reserve’s anticipated interest-rate increases and the cycling of record COVID-driven sales levels in 2021.”
Kroger Tops Q2 Expectations, Hikes Forecast
Kroger (KR) shares are up 3.5% ahead of the open after topping Q2 expectations and hiking its full-year outlook.
The grocery chain reported adjusted earnings of $0.90 per share on $34.64 billion in revenue.
That topped analysts’ expectations for adjusted EPS of $0.82 on $34.46 billion in revenue.
Kroger’s same-store sales rose 5.8% year over year vs expectations for a 4.6% increase.
The company hiked its full-year adjusted EPS forecast to between $3.95 and $4.05 from the previous forecast for $3.85 to $3.95.
Kroger now sees full-year same-store sales growth of 4% to 4.5% from 2.5% to 3.5% previously.
Oil Prices Rise Amid Supply Threats
Oil prices are higher today as supply concerns take over.
West Texas Intermediate crude futures are up 1.9% to $85 bbl while Brent crude futures are up 2% to $91 bbl.
Both contracts are still on track for weekly losses of more than 2%, with Brent hitting its lowest level since January.
The Energy Information Administration reported a surprise increase in U.S. oil and gas stockpiles Thursday.
Crude inventories rose by 8.8 million barrels last week vs expectations for a 1.88 million barrel decrease.
Gasoline stockpiles increased by 400,000 barrels vs expectations for a 1.5 million barrel decline.
In Case You Missed It
- Fed Chair Jerome Powell vowed to continue raising rates to fight inflation “until the job is done”. In a Q&A with the Cato Institute, Powell said, “I can assure you that my colleagues and I are strongly committed to this project.” He also highlighted the threat of public perception surrounding high inflation. Powell said, “The longer inflation remains well above target, the greater the risk the public does begin to see higher inflation as the norm, and that has the capacity to raise the costs of getting inflation down.”