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Copper and chip stocks seen as alternative clean energy plays

In today’s top stories, Goldman names four alternative clean energy plays, Tesla cuts China prices by up to 9% and Netflix grabs 7.3% of September’s TV viewing. Meanwhile, China stocks crashed following the confirmation of President Xi Jinping’s third term in power and analysts highlight which stocks they’re bullish about ahead of this week’s earnings.

Four plays on clean energy

Clean energy stocks clearly have a bright future, but Goldman Sachs recognises four sectors within the theme, which it calls “greenablers”, that will help to support the green transition yet are overlooked by ESG investors. They are copper and aluminium production, such as Freeport-McMoRan [FCX], electricity transmission, such as Sempra [SRE], as well as semiconductor producers like Advanced Micro Devices [AMD] and cybersecurity firms like Datadog [DDOG].

Streaming eats into cable TV

The Jeffrey Dahmer biopic series broke Netflix [NFLX] records with the best ever opening week for a new show and was partly to thank for a reversal in subscriber numbers in Q3. Monthly data from Nielsen shows that Netflix accounted for 7.3% of all television viewing in September compared with Disney’s [DIS] 1.9%. Streaming rose in popularity, accounting for 36.9% of all viewing last month, while cable’s numbers sunk to 33.8%, reported Seeking Alpha.

Xi sparks China sell-off

Confirmation that Xi had secured a third term and named loyalists in key leadership roles alarmed investors who have concerns about the Covid Zero policy remaining in place and China’s big tech giants could face fresh scrutiny. Justin Tang, head of Asian research at United First Partners, expressed concern that “Xi’s unfettered ability to enact policies that are not market friendly is now cemented,” according to Bloomberg. Seeming to echo that concern, the Hang Seng index closed down 6.4%.

Stocks with room to surprise

The volatile macro backdrop may have cast a shadow on this earnings season, but so far, so good, according to CNBC. Out of the 100-plus companies that have reported so far, 73% have exceeded earnings forecasts and 68% have surpassed revenue expectations. Of the big-name companies reporting this week, analysts love Bio-Rad Laboratories [BIO], which has an upside of 87.2% to the consensus price target, and EQT [EQT], which has a 66% upside.

Tesla’s China price cut

EV maker Tesla [TSLA] announced on Monday that it was slashing the cost of its Model 3 sedan and Model Y SUV in the country by up to 9% with CMBI analyst Shi Ji warning of a “possible price war”. Gary Black, a managing partner at The Future Fund, tweeted that Tesla “needs a PR team to clearly communicate what this China price cut is — and isn’t.” The uncertainty led to the Tesla share price falling 4% in pre-market trading.

UK banks to report profits boost

HSBC [HSBA.L] kicks off a big week of UK bank earnings reports today with Barclays [BARC.L] and Natwest [NWG.L] to follow tomorrow and Friday respectively. Analysts are expecting all three to report a boost to their net interest margin, given the recent rate increases. While investors will be watching for positive motion on the UK bank share prices, bumper profits would most likely heighten calls for Jeremy Hunt to introduce a windfall tax.

Shell’s Q3 profit warning

Oil giant Shell’s [SHEL.L] share price has been flowing in the right direction this year, up 48.6% year-to-date and 1.8% in the past month. Yet while the producer performed strongly in the first half of the year, it has issued a profit warning ahead of the third quarter earnings this Thursday. AJ Bell’s Russ Mould said Shell “is not immune from a slowdown which will impact demand for refined products”.

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