Today in the Market (12/1/2022)

Good Evening. Before releasing monthly employment statistics, U.S. equities retreated on Thursday as traders failed to capitalize on a surge fueled by Fed Chair Jerome Powell’s signal of a pause in rate hikes.

The S&P 500 fell by 0.09%, and the Dow Jones fell by 0.56%. The Nasdaq Composite finished in the green by 0.13%.

GUIDANCE SLOWDOWN

Snowflake (SNOW) shares climbed roughly 8% despite the company’s product sales projection for the fourth quarter missing forecasts due to a predicted slowdown in IT investment. However, 3rd quarter earnings were much better than expected

  • Earnings Per Share: $0.12 vs $0.05 expected
  • Revenue: $557 Million vs $539.6 Million expected

Even with the solid third quarter report… it is not unexpected that the economic downturn would catch up with Snowflake. This can be seen in Snowflake’s guidance for the fourth quarter.

Snowflake anticipates product sales in the range of $535 million to $540 million, or around 50% year-over-year growth — a significant deceleration from the quarter’s 67% increase. Wall Street anticipated sales of approximately $584 million, therefore investors want more.

EV MARKET SHARE

The most recent assessment on U.S. EV market share by S&P Global Mobility has Tesla in the lead with a 65% market share for all EVs registered during the first nine months of 2022, which is a decrease from 79% in 2020. This includes 525,000 EVs registered this year in the U.S.

The remaining non-Tesla sales are split among 46 different models, including, the Ford Mustang Mach-E, Hyundai Ioniq5, and Chevrolet Bolt EV. The S&P Global Mobility estimates by 2025 the number of models is likely to climb to 159 by 2025, implying more and more competition for Tesla. However, despite the imminent deluge of new competitors, Tesla is still in a solid situation given its massive lead and EV production size.

Is there a possibility for other businesses to cut into this lead? S&P Mobility analysts predict that once other automakers scale up, the majority of the increased competition in the EV market will enter the sub-$50,000 price range, where Tesla does not compete. This is reflected in the luxury EV market, where according to S&P data, Tesla has a larger 86% market share through the first nine months of the year.

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