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October 22: War Israel Heats Up, Elon Musk loses $16 Billion, China Beats Europe (Recap ep249)

In today’s Recap, Marcello talks about the escalation of the armed conflict between Israel and Palestine and explains briefly the effects of this confrontation while not taking any sides. Due to the fall in value of Tesla’s stock, Elon Musk has lost $16 billion of its fortune; the Chinese Yuan has surpassed the Euro and became the world’s second most used currency for SWIFT trade settlements.

The war between Israel & the Palestinian group Hamas that began Oct 07, has already spilled into the wider region & risks expanding further, with Iran backing an array of heavily armed groups. Hamas & its Palestinian ally Islamic Jihad are part of an Iran-backed alliance called Axis of Resistance. Iran’s Revolutionary Guards warned Tuesday of further action by Iran’s allies against Israel, if it did not cease its attacks. Since the Hamas attack on Israel on Oct. 7, Hezbollah has also been trading fire with Israeli forces in the most serious escalation across the Lebanese-Israeli frontier since 2006, when Hezbollah & Israel fought a war.
The Texas based electric vehicle maker Tesla shares plunged -9.3% Thursday at $220.11, after the firm missed earnings & revenue expectations for Q3. Earnings per share came in at $0.66 vs $0.73 forecast. Revenue was posted at $23.35B vs the projected $24.19B. A number of analysts lowered their price targets on the company following the disappointing results, citing more margin pressure likely ahead. The stock is down -15.35% in the past 3 months, but up +78.69% in 2023 & +2.64% y/y, with a market cap of $770.26B.
Headline inflation in Japan came in at +3% for September, slowing from the +3.2% rate in August, but the print was the 18th straight month that inflation remained above the Bank of Japan’s 2% target. Core inflation,which strips out prices of fresh food, also slowed to +2.8%, down from +3.1% in August. Separately, the so-called core-core inflation metric, which strips out prices of fresh food & energy, fell to +4.2% from +4.3% in August.
A U.S. bumper harvest of corn, likely to be the 3rd largest ever, will strain storage capacity & hold down prices of the world’s most traded commodity crop. This will benefit customers who will pay less for corn used to feed livestock, dairy cows & egg-laying chickens or to make ethanol biofuel. However, it will squeeze profits for farmers, who will store corn & hope for new demand from exports or new domestic uses.There could be 50% more corn in storage when the harvest starts in 2024 than when it started this year, the biggest single-year jump in supplies in nearly 2 decades.

Turmoil in the Middle East is keeping investors on edge & gold is one of the first assets to react thus rising above the critical psychological level of $2,000 an ounce & trading near 2.5-month highs on Friday; The U.S. Labor Department on Thursday reported that the number of Americans filing new claims for unemployment benefits fell to a 9-month low last week; A system incident halted trading in 100’s of shares on the London Stock Exchange.

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