Look Ahead 18/10/23: Tesla; Netflix; ASML; China Q3 GDP; UK inflation

(Video Transcript)

Traders await China GDP data

Hello, I'm Angeline Ong, and welcome to your Look Ahead to Wednesday 18 October 2023. We start in China, where we have Q3 gross domestic product (GDP) growth rate print. We also have the industrial production, retail sales and fixed asset investment readings as well.

Just to show you the yuan versus the US dollar, because the yuan was mostly steady against the greenback as traders await that GDP data. What's also key is watch out for what Chinese developer Country Garden says about its finances, because there's this growing expectation that it'll default on its offshore debt as the repayment deadline looms.

UK CPI, PPI numbers due

Moving on to the United Kingdom, we've got consumer price index (CPI) data, along with the producer price index (PPI) as well, and retail sales figures to boot.

Of course, a lot of the move seen earlier today, just looking at the volatility index (VIX) there, has been inspired not so much from the UK side, but actually the US side. In fact, the dollar has also moved on that, along with Wall Street.

As we head closer to the Wall Street Open, UK 10-year gilt yields hit their highest level in one week after US retail data was stronger than expected. Speaking of the US, we've got building permits and housing stocks and a Federal Reserve-based book as well.

Middle East conflict tied to oil prices

Keep an eye out for the EIA crude oil inventory report given that oil prices are very much linked to what's happening in the Middle East at the moment, waiting on Biden to arrive in the region to lay out the US's reaction and response to what's happening on the ground there.

In terms of earnings, we've got Whitbread out with first-half earnings. And over in Europe, we're looking out for ASML, Just Eat Takeaway and also SAP, all out with third-quarter numbers.

Keep an eye on ASML, because this is a really interesting space at the moment, given tech, given artificial intelligence (AI), given chips as well. Peter Wernick, the chief executive of ASML, says that he's very concerned by the earnings power of the Netherlands and of Europe, and that it's falling behind in terms of prosperity when it comes to collaborating between governments and also companies.

Tesla set to cut margins to keep prices down

He said that the US dominates in terms of big software platforms, while Asia is ahead in terms of car battery technology, and China is spending heavily on technical research.

And speaking of electric vehicles (EVs), we've also got third-quarter earnings from, of course, Tesla, the giant in this space. Tesla, as you know, has used the strategy of giving up in terms of its margins to try and ensure that it keeps its numbers and delivery numbers high.

Tesla's shares have come off slightly since its climb earlier this year, but the expectation is that it will continue with its lower price strategy in order to keep ahead of its rival.

Netflix fights for its subscribers

And from the rest of the US, Netflix is the big one to look out for, but we have Procter & Gamble's first-quarter numbers; Alcoa as well, a giant in the mining space; and Abbott Laboratories.

I’m showing you Netflix, because it's an all-session stock on the IG platform. This is the hourly chart for Netflix. It has been falling quite remarkably since the July high on 18 July 2023 of 47.720.

However, listen out to what it says about its streaming strategy, especially in places where competition is fierce, like in developing countries like India and across parts of developing Asia as well, Netflix, of course, was a darling during the lockdown pandemic phase. However, it is now trying to keep all those subscribers from transferring over to other streaming providers.

And that's it for now. For more market-moving news, I'll be back on Beat Street at 1.30pm London time to give you a heads-up to the US trading day and IG's Jeremy Naylor will be doing the same at 7.30am on Early Morning Call ahead of the European market open. Follow me on Twitter @AngelineOng. This is IGTV.