The latest Market Talks covering the Auto and Transport sector. Published exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET.
1358 ET - Tesla's capital expenditures came in below consensus, but StoneX analysts think the company could be deferring spending. Tesla lowered its capital expenditure outlook for the year to $20 billion, from $25 billion. However, the analysts think spending will expand again as the robotaxi fleet, Optimus robots and other AI products scale. Tesla did say its operating expenditure base will keep rising until new products commercialize, the analysts say. They lower their 2026 through 2028 adjusted earnings estimates, citing the higher operating expenditures. (katherine.hamilton@wsj.com)
1351 ET - Tesla is spending more on operating expenses to fuel its transition from autos to AI, Truist analysts say in a note. The company ramped OpEx, despite lowering capital expenditure guidance for the year. The operating spending is going toward AI projects, including robotaxi, cybercab, Optimus robots and a semiconductor fab. "We continue to believe these investments will pave the way for TSLA's AI transition, but they will weigh on margins and cash flow for a while," the analysts say. They believe near-term earnings are less important than Tesla's broader progress in transitioning toward AI. (katherine.hamilton@wsj.com)
1342 ET - Tesla's commentary about Optimus could have been a disappointment to investors, Oppenheimer analysts say in a note. Initial Optimus production has started, but the company is going through a pronged ramp as the complexity of the supply chain, manufacturing and training will lead to challenges, the analysts say. This timing will likely disappoint bullish investors. Plus, Chief Executive Elon Musk didn't share many more details on a potential merger between Tesla and SpaceX. This leaves questions about valuation and could weigh on the stock, the analysts say. Tesla is down 2%. (katherine.hamilton@wsj.com)
1125 ET - Although much of the focus among prediction markets is coming from attracting more institutional money to the space, retail investors have been wielding more power in directing markets than many realize, says JB Mackenzie of Robinhood. Speaking at the NEXTPreidict summit in New York, Mackenzie uses the example of airline stocks during the Covid-19 epidemic as retail investors flexing their control. With the advent of widespread proliferation of smart phones, these investors are not much behind in computing capabilities to other more-established technologies trading, Mackenzie says. (kirk.maltais@wsj.com)
1105 ET - While Canada has ambitious infrastructure goals, Mullen Group sees mining as the only sector delivering growth. Speaking to investors, Chair and Senior Executive Murray Mullen notes that capital will eventually flow toward Canada's major infrastructure builds, the timeline isn't certain. "This is Canada," Mullen says. "It sometimes takes a long time to get these projects off the drawing board and to shovels working." Until then, Mullen expects the company will be mindful of its capex until projects are confirmed. As a result, he says the logistics company plans to hold back on major capital expenditures until projects are officially approved, continuing to direct capital toward active growth areas like mining. (adriano.marchese@wsj.com)
1041 ET - Russian is shifting its grains exports to the Baltic Sea following Ukrainian attacks on Black Sea infrastructure and shipping, Kpler analysts say. Russian grain exports out of the Black Sea have been minimal so far in October after escalating Black Sea disruption over the summer. But Russia is repurposing ports in the Baltic Sea to handle grains exports, the analysts say. For example, the port of Vysotsk, which typically handles coal, is exporting an increasing proportion of Russian grains. Baltic Sea exports can't offset the volumes lost in the Black Sea, however, they say. Wheat nudges 0.2% down at $6.27 a bushel, after peaking around $7.84 a bushel in August. (josephmichael.stonor@wsj.com)
0939 ET - American Airlines CEO Robert Isom doesn't expect fuel prices to come down anytime soon. "If we had talked two months ago, three months ago--we were expecting profitability in the fourth quarter," he says on CNBC. Things have changed since then, though. Surging jet fuel prices dented the airline's 3Q results, and the company forecasts another quarterly loss in the current period. "If we look out into the new year: Yes, I think that fuel prices are going to be higher, longer," Isom says. "But we adjust to that, and so whether it's capacity and better matching supply and demand, or giving our customers something that they are willing and want to pay more for." American Airlines off 1% in early trading. (connor.hart@wsj.com
0933 ET - American Airlines is planning to "materially decelerate" its capacity growth next year, CEO Robert Isom says on CNBC. The carrier, which is set to increase capacity between 5.5% and 6.5% in the current quarter, for the past few years has been working to grow back its network, reestablishing itself in airports like Chicago, Philadelphia and Miami. "This is all about making sure that we have a network that is the leading network for North America," Isom says. Moving forward, though, the airline will ease its foot off the gas. "We're going to materially decelerate in terms of growth," Isom says. "We'll have more to say about that as we get into the first quarter." American Airlines down 3% in early trading. (connor.hart@wsj.com)
0927 ET - American Airlines CEO Robert Isom wants investors to focus on the carrier's record revenue growth, rather than its revised outlook for a full-year loss. "In regard to the financial result, it's all fuel," he says in an interview with CNBC. "That's the issue: Fuel in the third quarter, up $1.9 billion. If we look at the fourth quarter, up $2.8 billion." All things considered, American will end up paying about $7 billion more for fuel this year than the company expected at the beginning of the year, according to Isom. American Airlines is off 4.5% premarket. (connor.hart@wsj.com)
0633 ET - Renk could use proceeds from the sale of its slide bearings business for share buybacks or to make a bolt-on acquisition in unmanned systems, Mwb analyst Jens-Peter Rieck says in a research note. The latter would address a structural concern Mwb has regarding Renk, he says, pointing to the CEO's scheduled update on Dec. 8 as the main event to watch for more on strategy. Shares in the German defense company trade 1.1% lower at 36.88 euros. (sarah.sloat@wsj.com)
0631 ET - Tesla's earnings underwhelmed markets, with the group's core electric-vehicle business looking weak, AJ Bell's Russ Mould writes. Lower average sale prices in the face of fierce competition from China weighed on the vehicle business, Mould says. A lack of battery supplies meant the company also struggled to keep up with orders, the strategist says. However, the main Tesla-related story is unrelated the group's earnings, Mould says, with investors preoccupied by the company's potential merger with SpaceX. Shares fall 4.35% premarket amid a broader tech selloff. (josephmichael.stonor@wsj.com)
0630 ET - Taiwan's blocking of Grab's purchase of Foodpanda Taiwan was partly expected and turns the attention toward Uber in Southeast Asia, says Sachin Mittal of DBS Group Research. Taiwan's Fair Trade Commission said Uber's more than 13% stake in Grab, past board overlap and commercial history would blunt market competition, adding that Uber would need to cut or exit its stake to remove the risks, Mittal notes. The attention is now on Uber's takeover of Delivery Hero, which is due to close in 2H next year and includes Foodpanda in Singapore, Malaysia and the Philippines, the analyst writes in a note. Should regulators in Southeast Asia take the same stance as Taiwan, Uber may have to carve out the Foodpanda business in the region or sell its Grab stake, Mittal adds.
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