Stock Market Futures Rise As Investors Shake Off Fears Over Aggressive Fed Moves And The Ukraine-Russia War
U.S. stock futures are gaining as stocks look to rebound from yesterday’s losses. If anything, some would argue that investors may need to get used to the constant back and forth seen in markets now. Even so, it would be important to see how markets have grown since crashing at the start of the pandemic. This would be the case as yesterday marked two years from the initial bottoming of the broader stock market.
Since then, the S&P 500 is looking at its highest two-year gain since the late ’30s, according to data from Bespoke Investment Group. Fast forward to the current day and investors may be wondering what their next moves should be. Weighing in on this is Comerica (NYSE: CMA) Wealth Management’s chief investment officer, John Lynch. He says, “Though the policy dynamics are shifting, we encourage investors to continue to focus on the long-term fundamentals supporting growth in the economy and corporate profits.” As of 5:56 a.m. ET, the Dow, S&P 500, and Nasdaq futures are trading higher by 0.42%, 0.57%, and 0.69% respectively.
LG Energy To Build $1.4 Billion Battery Manufacturing Plant In Arizona; Teams Up With Stellantis On $4.1 Billion Lithium-Ion Battery JV
For starters, LG Energy, a manufacturer of electric vehicle batteries, is making headlines today. Notably, the South Korean firm is planning to build its first cylindrical-type battery manufacturing plant in North America. According to LG Energy, it will be investing about $1.4 billion towards building the 11GWh capacity facility in Arizona. By its estimates, construction on the project is set to begin in the second quarter of the current year. Should things go according to plan, LG Energy sees mass production beginning by the second half of 2024. Accordingly, such a facility would serve to support the rapidly growing EV industry moving forward.
Not to mention, in a separate announcement, LG Energy also revealed that it is working with Stellantis (NYSE: STLA). The duo are spending over $4.1 billion in a joint venture (JV) that involves lithium-ion batteries. Through the JV, both companies are working to build the first large-scale lithium-ion battery production plan in Canada. As it stands, both companies expect the plant to have an annual production capacity of at least 45GWh. LG will be holding a 51% stake in the JV through an initial investment of $1.46 billion.
For one thing, it is important to note that LG Energy is a key supplier to major EV players. Among its most notable clientele are Tesla (NASDAQ: TSLA), General Motors (NYSE: GM), and Hyundai. This move by LG would be in line with Tesla CEO Elon Musk’s comment from earlier this week. Musk highlights that battery production will be a limiting factor for the EV industry over the next few years. With battery suppliers like LG Energy ramping up their manufacturing capacities, things continue to heat up in the EV space.
Nikola Kicks Off Production Of Its First Electric Semi-truck
In other EV-related news, Nikola (NASDAQ: NKLA) seems to be gaining traction in the stock market now. For the most part, this would be thanks to the company’s latest update on the operational front. Namely, the heavy-duty EV manufacturer is starting production work on its first battery-electric semi-truck, the Tre. Nikola notes that its Tre semi-truck is now on the production line at its factory in Coolidge, Arizona. By extension, this would see the company beat Tesla to the punch by bringing its semi-truck to market first. For now, Nikola is aiming to begin deliveries by the second quarter of 2022.
Going into the specifics, this battery-electric version of the Tre caters to shorter supply routes. It currently has an estimated range of about 350 miles. In terms of production goals, Nikola aims to deliver between 300 to 500 trucks this year. Following that, the company expects to ramp up production further in 2023. Furthermore, Nikola is also looking into designing a hydrogen fuel cell version of the Tre with a 500-mile range. This would be part of its “next-generation,” fuel-cell model that Nikola aims to have ready by 2025.
Spotify In Focus Following News Of New Billing Solution Integrations With Google Play Store
Elsewhere, Swedish audio streaming giant Spotify (NYSE: SPOT) is gaining today following a positive update. Diving in, Alphabet (NASDAQ: GOOGL) subsidiary Google revealed that future versions of the Spotify app will have a new billing system. In detail, this will allow Spotify users on the Android operating system to sign up and make payments in-app. The current system will be available alongside Google Play payments. With Spotify being among the few apps Google is making this concession for, investors seem to be hyped.
Commenting on all this in a blog post is Google. The company writes, “This pilot will allow a small number of participating developers to offer an additional billing option next to Google Play’s billing system and is designed to help us explore ways to offer this choice to users while maintaining our ability to invest in the ecosystem.” Moving forward, Spotify will be paying a slightly lower payment fee of about 11% for payments processed on its own. This would be an improvement over the previous 15% to 30%. Overall, it seems like investors see this as a chance for Spotify to improve its business margins. The question is whether SPOT stock can maintain its current momentum long-term.
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Nio Earnings Preview
Not forgetting, Chinese EV maker Nio (NYSE: NIO) is set to report its latest quarterly financials today. After the closing bell, auto investors will likely be tuning in to the somewhat beaten down EV firm. This would especially be the case as NIO stock recently hit a 52-week low from a combination of several market headwinds. The likes of which range from broad-based weakness in growth stocks, regulatory concerns in China, and increasing competition. Despite all of this, there are several merits worth pointing out.
To begin with, Wall Street is currently expecting Nio to post a total revenue of $1.53 billion alongside a loss per share of $0.13. Year-over-year, this would suggest improvements of about 50% and 7% respectively. On top of that, the company continues to make strides on the operational front as well. Speaking about the company’s plans for the current quarter is CEO William Bin Li. He says, “Despite the continued supply chain volatilities, our teams and partners are working closely together to secure the supply and production for the fourth quarter of 2021.”
Moreover, Nio is also planning to maintain the current pricing of its EVs in the meantime. This is commendable seeing as several of its peers are doing so amidst rising raw material prices. Ideally, this could see its premium EVs become a more viable option for consumers. If all that wasn’t enough, analysts over at Deutsche Bank (NYSE: DB) also seem to be bullish on NIO stock. The firm reiterated a ‘Buy’ rating on it, highlighting Nio’s unmatched, “leading service infrastructure.” All this alongside the company’s Hong Kong-listed shares hitting record highs this week could bode well for Nio. As such, investors may want to keep an eye on NIO stock today.