Morning Market Feed, May 24th
It’s another volatile day in the markets as Snowflake drops from +10% to -5.3% and ELF continues its recovery from -10% towards +20%. About the earnings from ELF I want to give a second remark as I had quite bearish comments on them yesterday. I still do, but I think I know what happened. Furthermore there was other news I didn’t get to touch on like the massive run solar all of a sudden went on, they gave back some of those profits but the reasoning for the move is sound. Now let’s just dive straight into it and see what the last day of the trading week brings!
- Let’s begin with the Beauty
Share in ELF initially dropped 10% on the earnings release, after which the stock recovered during the earnings call. My comments on the earnings yesterday were quite bearish, and even though the market tells me I’m wrong, I will stand my ground and not give in to the well make-up positive twitst I think happened.
So what is that twist I’m talking about? During the earnings call, some analyst asked about the guidance to which Mandy Fields, the CFO of ELF Beauty responded that it has always been their strategy to guide conservative and then adjust that guidance on a quarterly basis, and that what they are seeing is very positive. I have added the part of the earnings call in the transacript below where this was said.
Part of ELF Beauty earnings call transcript
- The Solar Run
Solar had a huge day on Wednesday and this was quite easily explained after I dug around a bit to find the source. It therefore took me an extra day to report on it because when one of my stocks is up 8.7%, I will try and explain why this happened. But it wasn’t Enphase that had the news, it was First Solar that brought us the extremely bullish move. What happened was that a UBS note highlighted First Solar as a big AI winner. I thought the writer used a little too much of the good stuff myself as well, but they explained that an AI reply on Google would use about 10x as much electricity as a conventional search query. When you combine this with the recently imposed tariffs it makes for quite the bullish news. And, because that wasn’t good enough yet, it also with a clear break over $220 a technical breakout that has the stock now pushing $250, a level it has never seen after 2008.
Here is a link to the article from Barron’s
- The Polestar needs a Polestar
A few days ago I already explained how Polestar delayed their annual report after getting a warning from the Nasdaq that they did not comply with regulations and would be removed if they didn’t file their annual report within 60 days. Now Polestar hit a new low, they also delayed their Q1 earnings report in order to finish the annual report first. That sounds like a great cycle to be in.
Polestar Quarterly Filing Delay
This was however moreso an intro towards the stock I actually wanted to talk about. One that I have covered more in recent weeks and one for which I will first have to put my “everything is terrible” hat on. Maybe you can already guess what company I’m talking about.
- The Second One In Need
The company I’m talking about is Tesla. And, the news I’m talking about is that in their sustainability report, they no longer state the goal of having 20 million deliveries in 2030. This goal was set in 2020, when everybody seemed to want a Tesla and the goal made sense from that perspective I think. The now silenced goal of long term 50% annual growth goal which is now far out of reach is also named as an example of recent execution. I think everybody knows Tesla won’t deliver 10 million customer cars by 2030, and some magic is needed for their robo-taxi which is set to be revealed on August 8th.
- So What Will We Be Looking For?
Today will bring 3 big economic catalysts for the markets. The first is durable goods order, a MoM reading of -0.8% is what economist are forecasting. After that, we will move to the Michigan Consumer Sentiment survey, where we expect to see a 67.5 number. That’s a bad number and missing to the down side will go down a little to well in the current market. Finally, we will be looking at inflation expectations, that ate expected 3.5%. The are no earnings that spark my interest today.
With that being said, let’s hope for good economic numbers so we can go into the long weekend with a calm mind.
