In today’s top stories, European Lithium aims to become the continent’s first producer of the metal, analysts are torn on emerging market equities after a $2trn rout and Mobileye prices its IPO at $21 per share. Meanwhile, the first Bitcoin ETF becomes the sixth worst-performing ETF debut in the history of the NYSE.
Australian lithium miner targets European expansion
The global race for lithium supply is gathering pace, particularly in China, where local appetite for the critical metal could cripple its exports. European Lithium [EUR.AX] is hoping to become Europe’s first producer and will merge with the Nasdaq-listed SPAC Sizzle [SZZL] to form a new entity, Critical Metals. Increasing lithium production in Europe will “break that sort of reliance on China to produce the concentrate for the [EV] batteries,” executive chairman Tony Sage told Bloomberg TV.
Mobileye’s $21 per share IPO
After much hype and anticipation, Mobileye [MBLY] finally debuted on the Nasdaq yesterday. In the run up to the IPO, the Israeli self-driving unit of Intel [INTC] had slashed its valuation to below $16bn. However, on Tuesday evening it was announced that it had priced its shares at $21, exceeding the target range of between $18 to $20 and valuing the company at roughly $17bn. Still, it’s a far cry from the $50bn valuation mooted last year.
Three ways to navigate choppy earnings
It’s a big week for big tech earnings and their reports are likely to dictate the direction the S&P 500 heads next, given that they account for the top five holdings. “The question is, what’s going to be the future guidance for those companies since they dominate the index?” said John Petrides, portfolio manager at Tocqueville Asset Management, speaking to CNBC. He recommends investing in energy, small-cap stocks and REITs that pay dividends.
Emerging markets divide opinion
Emerging markets have seen $2trn selloff this year, with the benchmark MSCI Emerging Markets index having dropped 29.8% so far, versus a 19.8% decline for the S&P 500. Jonathan Garner, chief Asia and emerging markets strategist at Morgan Stanley, believes the MSCI index may have bottomed and could rise 14% between now and next June. The opportunity is “really exciting,” he told the Financial Times. On the other hand, Goldman Sachs analysts don’t see a “floor valuation”.
First Bitcoin ETF turns one
The ProShares Bitcoin Strategy ETF [BITO] has turned one year old, but investors will be in no mood to celebrate. Although gaining 8.6% in the past month, the fund has plummeted 56.6% year-to-date amid the crypto winter. According to Morningstar data seen by the Financial Times, the fund is the sixth worst-performing ETF debut in the history of the New York Stock Exchange. Fixed income ETFs, however, are currently seeing major inflows given their attractive yields.
Strategic overhaul critical for Credit Suisse
The Swiss banking giant Credit Suisse [CS] heads into its Q3 earnings report today with rumours of a liquidity crisis hanging over it. The share price has plunged 49% year-to-date, although has recovered 30.8% since setting a 52-week low on 3 October as investors were spooked by reports of Lehman-style collapse and its multiple legal challenges. Investors will be paying close attention to any commentary provided by the bank on its strategic overhaul.
Production the key metric for UK miners
UK miners Fresnilo [FRES.L] and Glencore [GLEN.L] release their Q3 earnings this week and investors will be keeping their eye on production and any guidance provided. Third-quarter production is a key metric because it indicates how miners might perform in the run-up to the year end. Glencore previously lowered its copper output guidance, though Fresnillo was “on track” as of its last production report.