Nov 15 – 19 | BATX, Oatly and Car Makers in the Headlines

After a historic start to the month, with incredible growth in the S&P 500 index, investors now seem confident about the economic rebound. This week will be punctuated by some important events in the automotive sector and the last few earnings reports of the season.

Keep your eye on the BATX stocks

You’ve probably all heard of the FAANG stocks (Facebook, Amazon, Apple, Netflix, Google). But what about BATX? BATX refers to the four big Chinese tech companies: Baidu, Alibaba, Tencent and Xiaomi. Investors will be watching the results of these digital giants this week, especially after the Chinese government introduced strict regulation on tech companies that operate abroad. Tencent already published a surprise profit last week, coming in 3% higher than expected. Now it’s Baidu and Alibaba’s turn.

Baidu, which is often referred to as the ‘Chinese Google’ will report earnings on Wednesday, November 17th. The company is expected to post earnings-per-share of $1.99, an increase of 33% year-over-year. Revenue could climb 18% compared to Q3 2020.

The following day, Thursday, November 18th, it will be the turn of e-commerce giant Alibaba. The stock has been volatile lately, partly due to a record fine of $2.8 billion imposed by Beijing for violating anti-monopoly rules. According to financial analysts, the weight of this fine could be felt in the numbers this quarter. On the other hand, the company is expected to increase its revenue by 17% every year until 2026.

Unsure about some of the earnings season lingo? Check out this guide which explains many of the terms mentioned in this article.

Oatly expands into sustainable clothing

The Swedish company, which makes vegan products using oat milk, went public on the Nasdaq stock exchange last May, but it’s been a tough year for the stock so far.

A few days ago, Oatly revealed a major change in its strategy. It will soon begin selling eco-friendly clothing and accessories. The idea here is to open up new markets and reach new customers.

This week, Oatly will reveal its quarterly figures on Monday, November 15th. The company reported a 64% growth in revenue last quarter, reflecting a strong appetite for dairy alternatives. But the growth could be down slightly this quarter due to supply chain problems and the increased cost of shipping products to Asia. The profit margins are therefore tighter than before.

If you are interested in investing in sustainable companies, check out these resources to help you and the well-being of your portfolio!

Sector to watch this week: automotive

On Thursday, November 18th, we’ll get data on new car registrations in the eurozone for October. This will help us understand the health of the car industry which has been hit hard by the recent crisis.

In September, registrations fell 23% year-on-year to the lowest figure since 1995. The drop was the result of the current global chip shortage which is slowing down vehicle supply. Germany and France fell 25% and 20% respectively.

On the other hand, there could be long-term potential in the automotive sector! Analysts estimate that the electric vehicle market could grow at a rate of 24% annually up until 2028. So don’t ignore the stocks of car companies in Europe that are focusing on electric vehicles, such as Volkswagen, BMW and Daimler.

Economic and earnings calendar

Monday – Trade balance in the euro zone and Ireland (September). Quarterly figures from Oatly.

Tuesday – Final inflation rate in France (October). GDP growth and trade balance in the Netherlands (September). Unemployment rate and GDP growth in the euro zone (Q3). Quarterly figures from Home Depot, Walmart, Encavis, Tyson Foods, Warner Music Group, Talanx, Colas, Bouygues.

Wednesday – Inflation rate in the euro area (September). Quarterly figures from Baidu, Nvidia, Cisco, Target, CTP, Sonos, Vallourec, Sixt, Esso.

Thursday – Unemployment rate in the Netherlands (October). New car registrations in the euro zone (October). Quarterly figures from Alibaba, Intuit, Workday, Macy’s, CTS Eventim, Thyssenkrupp, GIMV NV.

Friday – Unemployment rate in France (Q3). Quarterly figures from Foot Locker, CNP Assurances, Laurent-Perrier.

We’ll be back next week with another edition of the BUX Breakdown. In the meantime, have a great week on the markets!

The BUX Breakdown was written by Clémentine Pougnet.

All views, opinions, and analyses in this article should not be read as personal investment advice and individual investors should make their own decisions or seek independent advice. This article has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication.