5 things to know before the stock exchange opens on Thursday 20 April

  • Tesla CEO Elon Musk warns of “stormy weather” in the economy.
  • Toyota is expanding its EV lineup in China.
  • Meta and Disney are rolling out more layoffs.

Traders on the floor of the NYSE, April 19, 2023.

Source: NYSE

Here are the key news investors need to start their trading day:

The three major US stock indexes come in after another mixed day. The S&P 500 ended Wednesday slightly lower, while the Nasdaq ended slightly higher. The Dow ended in the red. The latest uncertainty in the market reflects a mixed start to the season. While major banks have fared fairly well, other companies have posted middling results. There are tons more earnings to come in the next few weeks as well, as investors also brace for more signs of a slowdown in the economy. Follow live market updates.

Elon Musk speaks at Tesla Investor Day.

Item: Tesla

Tesla’s quarterly results were roughly in line with what Wall Street expected. Auto revenue rose 18% year over year, but earnings felt crunched, falling more than 20%. The company blamed a number of factors for the weakened profit margin: higher material and logistics costs, lower income from environmental credits and “underutilization of new factories”. Tesla CEO Elon Musk also gave a gloomy outlook for the economy, saying he sees “stormy weather” ahead. “Every time the Fed raises interest rates, it’s the equivalent of an increase in the price of a car,” he said. Tesla’s shares fell around 7% in premarket trading.

Not bad, IBM. Not great either, but not bad. After hours Wednesday, the legacy tech giant reported better-than-expected earnings, while only coming back on revenue. The solid bottom-line performance reflects recent cost reductions IBM has made in its research, development and engineering operations. And the company may not be done cutting either. “We continue to evaluate additional actions,” Chief Financial Officer Jim Kavanaugh told analysts on an earnings call. IBM shares rose about 4% to begin with, but were about 2% higher in premarket trading Thursday.

Toyota is showing off a new concept electric car – developed together with BYD and FAW – at the Shanghai Motor Show in April 2023.

CNBC | Evelyn Cheng

Toyota has taken a more cautious approach to electric vehicle adoption than its main competitors, leaning more on hybrids and taking a market-by-market approach. The company’s strategy is reflected in its latest moves in China, which has become a boom market for electric cars thanks to government support. Toyota this week began taking orders for its first EV sedan in China, and it announced two other models expected to hit the country’s market next year. Deliveries of the new bZ3 electric sedan, developed in a joint venture with Chinese state-owned carmaker FAW, are due to start this year. It is priced at a lower level than Chinese carmaker BYD’s Han sedan and Tesla’s Model 3.

Mark Zuckerberg, CEO of Meta Platforms Inc., left, arrives in federal court in San Jose, California, U.S., Tuesday, Dec. 20, 2022.

David Paul Morris | Bloomberg | Getty Images

The redundancies are still coming in some sectors. Facebook parent Meta, operating under CEO Mark Zuckerberg’s “year of efficiency” mandate, this week began its next phase of job cuts, focusing on employees in technical jobs such as user experience, software development and graphics programming. This wave is part of the round of layoffs announced in March, with more to come next month. Meanwhile, Disney is expected to begin its second of three planned rounds of layoffs next week. CNBC’s Alex Sherman reports that several of those cuts will be at ESPN. In total, Disney plans to cut 7,000 jobs by the summer as part of a broader restructuring of the company.

– CNBC’s Alex Harring, Lora Kolodny, Jordan Novet, Evelyn Cheng, Alex Sherman, Jonathan Vanian and Rohan Goswami contributed to this report.

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