Tesla price cuts; NFI Group's debt load

author: FutureCar Staff    

There is a significant situation unfolding at Goldman Sachs that resembles the popular TV show "Game of Thrones." While I personally never watched the show due to its excessive violence, the events occurring at Goldman Sachs have captured my attention. According to a detailed report from Bloomberg, CEO David Solomon, who is also known for his hobby as a DJ, is facing a potential uprising from partners who are dissatisfied with his management style. These partners have turned to Solomon's second-in-command, John Waldron, for support. It remains uncertain whether Waldron will join the mutiny, especially considering that Goldman Sachs' stock has performed well under Solomon's leadership despite increasing scrutiny. Only time will reveal the outcome, much like the impending arrival of winter.

Here are five key points to be aware of this morning:

1. Market Stability: After a sell-off that led to the TSX, S&P 500, and NASDAQ closing at one-month lows, markets are now stabilizing. Today, we will receive the U.S. Federal Reserve minutes, which may shed light on the reasons behind their decision to resume rate hikes in July after skipping them in June. The next meeting is scheduled for September 19 to 20, and the current market prediction suggests only a 10% chance of a rate hike. In the U.K., inflation rates present a mixed picture, with headline inflation reaching its lowest point in 17 months while core inflation remains steady and services experience a 30-year high. It seems that inflation rates from various countries are gaining significant attention from international strategists, including Canada's inflation rate, which is expected to reaccelerate more than anticipated.

2. Target's Surprising Reaction: Despite an announcement that Target's sales fell more than expected and the company's forecast for lower sales and profit for the year, the stock is surging. This unexpected response can be attributed to several factors. Firstly, the stock recently closed at a three-year low, which may have influenced investors' perception. Additionally, the company's earnings per share exceeded expectations by 30%, and although sales are declining, Target's margins have expanded, and inventory levels have decreased. Investors find comfort in the fact that Target is not relying on excessive promotions to attract consumers.

3. Coinbase Approval: Coinbase, a prominent cryptocurrency exchange, has obtained regulatory approval to sell crypto futures in the United States. Interestingly, this approval did not come from the Securities and Exchange Commission (SEC), which is currently suing Coinbase, or the Commodity Futures Trading Commission (CFTC), which typically regulates cryptocurrencies as commodities. Instead, the approval was granted by the National Futures Association. This news has resulted in a rally for Coinbase shares, as crypto derivatives accounted for nearly 80% of all crypto trading volume on centralized exchanges in July, according to Bloomberg.

4. Tesla's Price Cuts: Tesla has announced another round of price cuts in China, marking the second time in three days. These reductions apply to sedans and SUVs and come in response to the economic slowdown in China, which has significantly impacted Tesla's sales. Shipments from Tesla's Chinese plant dropped by 31% in July, reaching the lowest level this year. These price cuts align with a warning made by Tesla CEO Elon Musk during the company's last conference call, indicating that more reductions would be implemented.

5. NFI Group's Challenges: NFI Group, a bus manufacturer, has reported higher sales and a narrower loss than anticipated. This positive performance can be attributed to improving supply chains and growing demand. However, the company continues to struggle due to a burdensome debt load, resulting in ongoing losses. To address this issue, NFI Group has announced a private placement with an unnamed asset manager to raise $50 million. The placement is priced at $10.10 per share, representing a 14% discount compared to the previous day's closing price but higher than the previous private placement.

FutureCar Staff