A look at the day ahead in European and global markets from Gregor Stuart Hunter
Just days after strapping thrusters onto the new Roadster, Elon Musk may be about to repeat the stunt for real this time with a far bigger boost for Tesla — by combining the EV maker with SpaceX.
The mercurial industrialist said on Tuesday that a merger of the two companies would be “a good idea” and that they had formed special committees to discuss a union, sending shares of the Starlink operator up 8% in extended trading. The tie-up would create one of the most valuable companies in the world, worth about $3.5 trillion and in fifth place globally, between Microsoft and Amazon.
But Musk faces substantial regulatory risks from merging the two. Top of mind among governments may be who ordered the slowdown of a military-grade version of the Starlink satellite service that Ukraine relies on in its war with Russia. The Wall Street Journal reported on Tuesday that Musk had given the order last week, citing US officials and people familiar with the matter. Reuters could not independently verify the report.
Analysts on Tesla’s Q3 earnings conference call later may be tempted to ask: Whatever happened to the last Roadster that Musk blasted into outer space in 2018, anyway?
Elsewhere, Australian data centre operator NextDC shed nearly half of its value after sharply cutting revenue forecasts for the year ahead and putting future developments on hold, extending the burst of negative sentiment towards global AI stocks.
But shares in South Korean artificial intelligence infrastructure company Elice Group surged 30% on Wednesday morning, rebounding from a slump in its market debut on Tuesday.
Markets in Asia have been fairly well-behaved otherwise: MSCI’s broadest index of Asia-Pacific shares outside Japan was up 1.2%, as the KOSPI hit a one-week high. The Nikkei 225 gained 1.3%, while S&P 500 e-mini futures were up 0.4%.
Brent crude climbed 1.5% to $110.41 per barrel in Asian trade on Middle East supply concerns, with investors wary of Red Sea shipping risks and threats to oil infrastructure in Saudi Arabia, and peace talks between the US and Iran still elusive following a choppy session for oil markets on Tuesday.
In early European trading, pan-region futures were up 0.4%, German DAX futures gained 0.4% and FTSE futures were flat.
And after a downgrade threat from MSCI triggered a rout in the Jakarta Composite, Bank Indonesia prepares to decide interest rate policy later. In a departure from its usual programme, the central bank has brought forward Wednesday’s policy rate press conference to 1330 local time (0630 GMT), 30 minutes earlier than usual, without providing details. Stay tuned.
Key developments that could influence markets on Wednesday:
Company earnings:
Meta, Tesla, Lam Research, Philip Morris International, SAP SE
Economic events:
United Kingdom CPI, PPI, RPI, RPI-X and PSNB ex-banks for September
(Reporting by Gregor Stuart Hunter; Editing by Muralikumar Anantharaman)
