Stocks over the past week gained about 73 points and on Monday finished up another 64 points today at 35,741 on heavier volume. IBD continues to list markets in rally mode. Tesla bolted to an all-time high and earnings reports continue to roll in. WTI crude oil hit $85 per barrel on supply concerns and weather forecasters are calling for a colder winter in Asia which is driving countries like India, South Korea, China and Japan to stock up on fuel. Yield on the 10 year Treasury is holding at 1.635% up from 1.5% at the beginning of October.
The Economy and Earnings
Proctor & Gamble, maker of paper towels, diapers, bleach and toothpaste reported better than expected results last week however the company warned of price hikes due to higher commodity and freight costs which have already eaten into margins. P&G reported a 5% revenue increase and a decline in net profits of 1%. While the stock dipped a bit on the news the company maintained its forward guidance and gurus are expecting more share buybacks and dividend increases in 2022.
Tesla reported better than expected numbers as it produced 64% more vehicles and delivered 73% more vehicles than this time last year. Revenue was up 57% while net income grew 145%. The firm is on track to produce the Model Y before the end of the year at its new Austin, TX and Berlin, Germany factories. Even with supply chain issues and power outages Tesla’s automotive margins increased from 28.4% to 30.5%. Solar deployments were up 46% to the highest number in 5 quarters. It was also revealed that lead times between ordering a car and actually getting it delivered have increased and are now running 6 to 7 months. On a side note, Tesla’s share hit an all-time high Monday after Bloomberg reported Hertz Global ordered 100k vehicles from Tesla to electrify its rental fleet. An order this size could be worth $4.2 billion in revenue for Tesla and investors jumped on board Tesla’s stock like hungry bulldogs on a meat wagon.
Items of Interest
Nothing much to report here. Mayoral elections in Seattle are heating up and the scouts are prepping for our annual Christmas tree sale.