[Good Morning Stock Market] Will 'Tesla,' Achieving Four Consecutive Quarters of Profit, Shine?... Expecting a Market with Stock Differentiation

[Asia Economy Reporter Oh Ju-yeon] Electric vehicle company Tesla recorded an 'earnings surprise' in the second quarter of this year, raising expectations for a differentiated market trend centered on related stocks in the domestic stock market.

Tesla posted earnings per share of $2.18 in the second quarter, significantly exceeding market expectations. Additionally, by achieving four consecutive quarters of profitability, it met the 'financial viability' requirement and fulfilled the conditions for inclusion in the S&P 500 index. This has led to a rise in its stock price during after-hours trading, which is analyzed to potentially have a positive impact on the domestic stock market as well.

However, the closure of consulates between the U.S. and Chinese governments poses a burden. It is assessed that changes may occur depending on foreign investors' supply and demand. On the 22nd (local time), U.S. President Donald Trump responded at a press conference that additional closures of Chinese consulates are "always possible."

◆ Seo Sang-young, Kiwoom Securities Researcher = The closure of consulates between the U.S. and Chinese governments is expected to burden the Korean stock market. The intensification of U.S.-China friction is highly likely to act as a factor dampening investment sentiment. In addition, the offshore yuan's 0.6% depreciation against the dollar and the depreciation of emerging market currencies against the dollar could negatively affect foreign investors' supply and demand, which is also a concern.

However, the announcement by the U.S. Republican-controlled Senate and the administration to extend the duration of additional unemployment benefits until the end of the year, while reducing the amount from the previous $600 increase to $400, is positive. Of course, despite Microsoft’s solid earnings announcement after market close, the news that the growth rate of its cloud services slowed compared to the previous quarter is a burden, causing a 3% decline. But Tesla’s four consecutive quarters of profitability have led to a 4% rise in after-hours trading, which is expected to provide reassurance. Considering these changing factors, the Korean market is expected to experience a stock-specific market trend with fluctuations depending on foreign investors' supply and demand.

◆ Han Dae-hoon, SK Securities Researcher = Tesla’s second-quarter earnings per share recorded $2.18, greatly surpassing the market expectation of $0.03, achieving four consecutive quarters of profitability. Revenue reached $6.04 billion, also significantly exceeding expectations. By recording four consecutive quarters of profitability, Tesla finally met the requirements for inclusion in the S&P 500 index. The importance of Tesla’s earnings announcement this time lies in its connection to Tesla’s inclusion in the S&P 500 and serving as an important barometer for growth stocks that have shown price pressure due to short-term rapid rises.

Since the beginning of the year, global growth stocks have risen 12.5%, while value stocks have fallen 14.8%. Given Tesla’s significant contribution to the rise of growth stocks, there were concerns that failure of Tesla’s earnings or S&P 500 inclusion could trigger profit-taking selling pressure on growth stocks. Contrary to these concerns, Tesla announced second-quarter earnings that greatly exceeded market expectations, which is expected to alleviate market anxiety.

Concerns about the valuation of growth stocks are expected to be somewhat eased. Although it is difficult to make a definitive judgment as major U.S. tech companies’ earnings announcements are still pending, growth stocks are expected to continue playing a leading role.

This content was produced with the assistance of AI translation services.