🍏Will We See Good Times Ahead?🍎

Equity indexes rocketed in October even as supply constraints continued to hamper many companies’ earnings as they failed to meet sales goals. Moreover, cost pressures build up, which dilutes the margin. Finally, the expected upward movement in bond yields may push equity valuations to the lower end.

Yet, historically, the best 3-month period for stocks is often from November onwards. According to past data, the S&P 500 and Dows have typically gained an average of 3.4% during these 3 months.

It could also be a seasonal trend since people tend to pump into investment accounts during the end year as they tend to contribute to their IRA account at a single shot which typically means flowing money into the stock market. Likewise, in January, we also see substantial contributions from employers.

Pika World is hopeful of a volatile but profitable quarter ahead.

🚘Tesla: Politics in Place🚖

As Pika World has often spoken about the intertwined of politics into the economy, it seems to play out in Tesla although the impact may not be that significant.

On Sunday, Elon Musk tweeted on President Biden as a “Puppet for the United Auto Workers. This is in response to the proposed tax credits for EV cars, which are given only for cars assembled by unionized labour, which would have excluded Tesla, giving other EV cars an advantage.

Depending on which plant manufactured the EV cars, Ford and General Motors are likely to be beneficiaries of the bill proposals. We have seen the clash between Tesla and Biden administrations. Notably, the administration did not invite Tesla, the US’s largest EV producer, when he announced his grand goal of having 50% of the cars sold in the US be electric in August.

As of this stage, the conflicting behaviour has not affected Tesla stock price, and Pika World is mindful of future development that may have a material impact on the company. Accordingly, we maintain exposure to Tesla as always.

💎XPeng: Persistent strong performance💎

Chinese EVs are gaining traction in the market as XPeng delivered solid results for delivery compared to NIO. NIO had only delivered 3667 vehicles, a drastic fall from 10,628 in September.

XPeng made remarkable progress as they delivered 10,138 vehicles in October, the second consecutive month that registered more than 10,000 cars. On the other hand, Li Auto, a rival, delivered 7,649 cars, increasing from September.

The result paints a shocking picture of how competitive the EV market is in China. Pika World is looking into further entry into Chinese EV stocks.

📮What’s on the Menu Today?

Today is a light data day, and we hope the market will have a smooth sail.

It is 2 Nov, Tuesday, at 7.05 am in Singapore and 7.05 pm in New York. The first trading day has been a good one as we took profit on several positions, and we hope for a splendid week!