Market Recap
Risk sentiments continue to reel in from the fresh multi-year highs in US Treasury yields yesterday, as resilient US economic data brought the high-for-longer rate outlook for the Federal Reserve (Fed) back into the limelight lately. Some after-effects of the blowout US retail sales report this week may remain in play, while lukewarm US housing data overnight did not change much of the hawkish narrative. The US 10-year yields seem to be setting its sight on the key 5% level, surging close to 20 basis-points (bp) over the past two days to stand at 4.91%.
After-market result releases from Netflix and Tesla may offer investors some diversion. A higher-than-expected addition of 8.76 million global subscribers during the quarter once again pushed back against any lingering views that Netflix’s membership growth momentum may be slowing, while a price hike announced by the company may be a net-positive for its subsequent top and bottom-line, given its resilient user base. Its share price is up 13% after-market.
The same optimism is not displayed in Tesla however, which failed to beat both revenue and earnings expectations. A more cautious outlook in the earnings call, along with some pushback in the financial contribution for Cybertruck, seems to take the bulk of the attention. Not to mention its slowest revenue growth in more than three years and a significant softening in operating margin (7.6% vs 17.2% a year ago).
A trendline breakdown with a 4.3% decline in its share price after-market may offer a huge obstacle for the bulls, while its daily moving average convergence/divergence (MACD) seems to be setting its sight on a reversion into negative territory as a sign of downward momentum. Any follow-through selling in tonight’s session may leave the US$210.12 level on watch next as potential support.
