In today’s top stories, Cathie Wood buys up Adobe shares, BYD launches its electric SUV in India and thematic funds outperform the S&P 500. Meanwhile, Morgan Stanley cut its Tesla price target to $350 and turns bullish on tech.
Cathie Wood buys Adobe
The market didn’t react well to news on 15 September that Adobe [ADBE] would be buying private software company Figma. The Adobe share price is down 27% in the past month and has received a spate of analyst downgrades. Cathie Wood has taken advantage of the weakness, adding 22,874 shares of the stock to the Ark Next Generation Internet ETF [ARKW] on 19 September and snapping up a further 23,605 shares on Monday.
Time to buy tech says Morgan Stanley
Tech stocks have been stuck in a rut, but maybe not for much longer, according to Wall Street banks, who are turning positive on the sector. Morgan Stanley [MS] has upgraded EU tech stocks from underweight to overweight on the basis that they will gain when the Fed tempers its rate hikes. “Software should be relatively defensive in any further sell-off, and valuations look reasonable now,” Morgan Stanley added in a note seen by CNBC.
Trend-spotting funds outperform S&P 500
With the S&P 500 down approximately 24% year-to-date, one of the keys to outperforming the benchmark has been using qualitative models to spot buy and sell signals. A number of funds have used this approach to jump onto trends and start taking long or short positions, according to Barron’s. AlphaSimplex Managed Futures Strategy [ASFYX] has gained 47.3% and the AQR Managed Futures Strategy [AQMNX] has gained 40.7%.
BYD launches electric SUV in India
Warren Buffett-backed BYD [1211.HK] officially entered India on Tuesday with the launch of an electric SUV, Atto 3. The carmarker is targeting sales of 15,000 in the first year. BYD is also trying to break Japan, where hybrids make up almost half of all new car sales. It’s “a market impenetrable unless buyers there warm up to EVs and are willing to try foreign products,” auto analyst Zhu Dawei told Asia Financial.
Morgan Stanley lowers Tesla deliveries
Despite delivering a record number of vehicles in Q3, Tesla [TSLA] missed estimates. Morgan Stanley analysts believe that the headwinds limiting the carmaker’s output will persist in Q4. They have revised their full-year delivery guidance down from 1.37 million units to 1.31 million, while also cutting their price target from $383 to $350. "Nevertheless, we believe Tesla will still sell every vehicle it can produce through the FY23 forecast," they wrote in a note to clients.
US asset managers report quarterly earnings
It’s been a challenging year for asset managers and the three big US firms, BlackRock [BLK], JPMorgan Chase [JPM] and Morgan Stanley, all report earnings across Thursday and Friday. Analysts will be focusing on earnings per share, as the current consensus is for it to fall for all three of the firms. However, analysts remain overwhelmingly bullish on all three stocks.
Ashmore to show little improvement from Q4
UK investment manager Ashmore [ASHM.L] also delivers its assets under management update for Q1 2023 on Friday. Earnings plummeted in the previous fiscal year and investors aren’t holding out much hope that things will improve in the near-term given the prolonged challenges in emerging markets. They’ll be keeping their fingers crossed that Ashmore’s financials show that it can provide enough cover for rainy days ahead.