Stock Market Today Mid-Morning Updates
On Tuesday, the Dow Jones Industrial Average is down by 500 points as investors return from a three-day holiday over the weekend. This comes as concerns of a recession still persist in investor sentiment. Furthermore, there are worries on economic growth as the U.S. market looks to recover after a rough first half of the year, one of its worst in decades. Today, U.S. Treasury Secretary Janet Yellen held virtual talks with Chinese Vice Premier Liu He to address macroeconomic conditions. This includes U.S. sanctions and tariffs on China.
Shares of Exxon Mobil (NYSE: XOM) are in focus today following a late Friday announcement that second-quarter earnings could be as much as $18 billion. This quarter’s success is coming from rising oil and natural gas prices and also higher refining margins. Crocs (NASDAQ: CROX) is up today after it was upgraded to a ‘Buy’ rating from a ‘Hold’ rating from Loop Capital. Biopharmaceutical company AstraZeneca (NASDAQ: AZN) announced a deal to buy biotech firm TeneoTwo in a deal that could be worth up to $1.17 million today.
Among the Dow Jones leaders, shares of Apple (NASDAQ: AAPL) are up by 0.24% today while Microsoft (NASDAQ: MSFT) is down by 0.80%. Meanwhile, Disney (NYSE: DIS) and Nike (NYSE: NKE) are trading mixed on Tuesday. Among the Dow financial leaders, Visa (NYSE: V) is down by 1.72% while JPMorgan Chase (NYSE: JPM) is up by 2.43%
Shares of EV leader Tesla (NASDAQ: TSLA) are down by 3.54% on Tuesday. Rival EV companies like Rivian (NASDAQ: RIVN) are also down by 3.59%. Lucid Group (NASDAQ: LCID) is trading lower by 0.88% today. Chinese EV leaders like Nio (NYSE: NIO) and Xpeng Motors (NYSE: XPEV) are trading mixed now.
Dow Jones Today: U.S. Treasury Yields Down To 2.82%; Euro Fall To 20-Year Low Against Dollar
Following the stock market opening on Tuesday, the S&P 500, Dow, and Nasdaq are trading lower at 1.75%, 1.85%, and 1.05%. Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (NASDAQ: QQQ) is down by 0.97% while the SPDR S&P 500 ETF (NYSEARCA: SPY) is also down by 1.75%.
The benchmark 10-year U.S. Treasury yield continues its decline to 2.82% today as investors brace for another round of corporate earnings season. This could mean even more downtimes ahead. Accordingly, companies also continue to navigate through the fallout from red-hot inflation eating into their bottom lines. The euro has fallen to a 20-year low against the dollar today. Besides the Russia-Ukraine war showing no signs of stopping, Europe is also being hit by record inflation as well. The European Central Bank will be raising rates for the first time in 11 years this month as well.
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Tesla To Halt Most Production Of Model Y In Shanghai After Shaky Quarter
Tesla is in focus today after it announced that it will halt most production on its Model Y assembly line in Shanghai for the first two weeks of July. The biggest blow to Tesla’s performance during the quarter was Shanghai’s weeks-long Covid lockdown. Investors also continue to weigh in on the EV company after a disappointing quarter of deliveries.
Diving into its recent second-quarter financials, Tesla produced 258,000 vehicles and delivered over 254,000 during the quarter. It missed consensus estimates of 261,181 vehicles. This would also be less than the record of 310,048 cars that the company delivered in the previous three months. However, it is still a 26% increase year-over-year. Its gigafactory near Berlin will also be taking a two-week break starting on July 11.
CEO Elon Musk has said that Berlin and Austin are losing billions of dollars right now. This is due to a lot of expenses and hardly any output. Tesla, like many other companies around the world, continue to face ongoing supply chain challenges and factory shutdowns that are beyond its control. Additionally, Tesla has said that it will take a $440 million write-down on its $1.5 billion purchase of bitcoin in February 2021. With that in mind, TSLA stock would be in focus in the stock market now.
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Berkshire Hathaway Purchases Additional 9.9 Million Shares In Occidental Petroleum
Occidental Petroleum (NYSE: OXY) continues to receive plenty of attention from the Oracle of Omaha, Warren Buffett. Namely, this seems to be the case as his investment firm Berkshire Hathaway (NYSE: BRK.A) continues to grow its stake in the firm. In essence, Berkshire, through an SEC filing last week, revealed that it purchased an additional 9.9 million shares of Occidental Petroleum. According to the disclosure document, the cost of these shares is about $584 million at an average price of $58.98. Furthermore, Berkshire’s transactions span from Wednesday through Friday last week, bringing its total to a whopping 163.4 million Occidental shares.
All in all, Berkshire now owns a 17.4% stake in the oil company, further solidifying its position as the largest stakeholder. For those that have not been keeping up with Buffett’s focus on OXY stock, here’s some context. Starting in the first quarter of 2022, Berkshire’s total purchases of OXY stock add up to a total of about $7 billion. Additionally, Buffett notes that his firm acquired this 14% stake in Occidental over a two-week period. This sizable investment would be Berkshire’s first and largest one to-date. Since then, Buffett’s investment firm has and continues to grow its position in Occidental. Following its latest purchase, the firm still has options to buy another 83.9 million shares. In this case, Berkshire would hold a sizable stake of over 25% in the firm.
For one thing, Truist (NYSE: TFC) analyst Neal Dingmann also believes that there is a “good chance” that Berkshire could initiate a takeover of the company at this rate. Alongside this, the analyst also has a price target of $93 on OXY stock. As a result, I could see investors considering OXY stock at the opening bell today.
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