Tesla and Alphabet gain as Wall Street advances

 

This week

Third-quarter earnings season gets underway, while Wednesday’s US CPI inflation data on October 14 could influence expectations for the Federal Reserve’s interest rate decision later this month. Current expectations are that the Fed will keep rates unchanged. Thursday brings producer-price inflation and retail-sales data, alongside Tesla’s planned Roadster demonstration on October 15. On Monday, Iran called the US proposal “inadequate”, although negotiations appeared likely to continue.

 

Stocks

Tesla

Tesla price gained 3.4% last week and reached a twelve-week high. Better-than-expected third-quarter deliveries supported the shares, with Tesla reporting 486,532 vehicles against expectations of 461,974. Musk also attended a White House meeting on AI, adding to attention on his role in the industry and his ties to the US administration. Investors are also looking ahead to the October 15 Roadster demonstration and Tesla’s earnings on October 21, when they will want to hear more about the company’s AI and robotaxi plans. UBS investment bank raised its price target for Tesla’s stock last week.

Alphabet

Alphabet price rose 2.2% last week and hit a two-week high. Google unveiled its new Gemini agent for businesses on October 8, designed to handle complex tasks using different AI models. Alphabet CEO Sundar Pichai’s meeting at the White House to discuss AI took place recently, as the company remains engaged with the US administration on AI development. Wells Fargo raised its Alphabet price target from $411 to $417, ahead of Alphabet’s expected October 28 results. Investors will want to see whether growing demand for Google’s AI chips and cloud services is bringing in enough revenue to justify the company’s heavy spending on AI.

 

Commodities

Crude Oil

Crude oil price edged up 0.03% last week after touching a five-week low. Two factors pulled prices in opposite directions. Trump’s Thursday assurance that there would be no pre-election attack on Iran eased supply fears. By Friday, however, Hurricane Isaias had forced producers to shut more than 70.0% of offshore US Gulf oil production, contributing to a price recovery. Attacks on tankers near Hormuz highlighted the continued risk of supply disruptions despite ongoing negotiations.

Gold

Gold price gained 1.3% last week after hitting a two-month low on Wednesday, before recovering to a one-week high on Friday. A stronger dollar and rising US bond yields pushed prices lower early in the week. Gold then recovered as the dollar weakened and yields fell, following a sharp midweek decline. China’s central bank was reported to be adding to its gold reserves for the 23rd consecutive month. Markets priced in an approximately 19% probability of a Fed rate hike in October and an 84% probability of at least one hike by December.

Aluminium

Aluminium fell 1.4% last week to its lowest level since mid-February. A stronger dollar and high US bond yields weighed on prices early in the week. Chinese stockpiles also increased after the Golden Week holiday. A report on October 8 showed that stocks of aluminium used to make products such as window frames had risen by 38,000 tonnes since September 30, reaching 187,500 tonnes. The increase in available inventories added to downward pressure on prices. The increase also pointed to a possible gap between available supplies and the pace of demand.

USD/CAD

USD/CAD price edged up 0.03% last week and touched an eighteen-month high. The dollar gained support from rising US bond yields, while minutes from the Fed’s latest meeting showed that most policymakers expected another rate hike this year. However, weaker Canadian jobs data on Friday, which showed unemployment rising, reduced expectations of a Bank of Canada rate hike on October 28. Falling oil prices also weighed on the Canadian dollar. While US-China trade tensions remain a factor, analysts generally attributed greater influence to US bond yields during the week.

 

Recap

Last week the S&P 500 rose 1.2%, the Nasdaq gained 0.6%, and the Dow Jones added 0.9%, with the S&P 500 setting a record on Tuesday. Crude oil edged higher, and both gold and silver rose, while platinum and palladium fell over the week despite Friday’s recovery. On Thursday, Trump ruled out attacks on Iran before the November 3 midterm elections, citing “productive discussions”. Iran said it would respond within days to Washington’s latest proposal to reopen Hormuz. Trump’s comments reduced concerns about an imminent attack, but the US blockade and disruption to shipping remained in place.