ARK Invest sells 213,300 Komatsu shares

In today’s top stories, ARK Invest ditches Komatsu shares, Tesla’s margins shrink and copper prices jump after mining companies reduce forecasts. Meanwhile, an $85bn fund manager bets on India and analysts make bullish calls for streaming stocks.

ARK offloads Komatsu shares

Cathie Wood’s ARK funds sold 536,000 ADRs and 213,300 shares in Japanese machinery producer Komatsu [6301.T] ahead of its earnings next Friday. Altogether, the ARK Autonomous Technology and Robotics ETF [ARKQ] and the ARK Space Exploration and Innovation ETF [ARKX] offloaded 749,300 Tokyo-listed shares in the company, marking a record monthly decline in its holdings of Komatsu stock.

Tesla margins shrink

Despite hiking prices to combat rising component costs, Tesla [TSLA] reported its lowest margins in over a year when the EV maker announced its Q2 earnings on Wednesday. The company still beat analyst expectations, with earnings coming in at $2.27 compared with the Wall Street consensus of around $1.80. While Tesla shares rose 2.6% before the markets opened on Thursday, CEO Elon Musk is still under pressure to resolve supply chain and production issues.

US fund manager bets on India

US firm GQG Partners says India is one of the best positioned emerging markets to weather a recession due to its strong domestic market, which makes it less dependent on exports. GQG has invested $7bn in India and lists favourable demographics and local consumer demand as reasons to be optimistic on the country — although foreign funds have shed almost $30bn from India’s stock market this year.

Optimism for streaming stocks

With Netflix [NFLX] reporting a smaller subscription loss than expected, analysts have been speculating whether it could return to growth. I/O Fund’s Beth Kindig believes this will be the case, since the stock is already at “rock bottom”. “We expect a return to growth for streaming stocks and we believe the current valuations are an overreaction to the downside”, she told CNBC’s Squawk Box. Meanwhile, analysts are bullish on Roku [ROKU], citing the growing trend of ad-based video on-demand.

Copper price rebounds

After reaching a 20-month low last week amid fears of a recession, the copper price has jumped higher after yet another producer lowered its full-year forecast. Antofagasta [ANTO] was the most recent miner to slash its targets for 2022 on Wednesday, lowering its expected annual output from 660,000–690,000 tonnes to 640,000–660,000 tonnes. The company blamed rising costs, drought and a leak at its Chilean operations as reasons for the lower output.

FAANG stocks struggle in tech crunch

Technology companies have suffered in recent months as inflationary fears and interest rate hikes have weighed down investor sentiment. The FAANG stocks, including Meta [META] (formerly Facebook), Apple [AAPL], Amazon [AMZN], Netflix [NFLX] and Alphabet [GOOGL] (parent company of Google), have been included in this technology rout. With economic pressures around the world, upcoming Q2 earnings are also expected to be difficult.

Are the chips down?

Semiconductor stocks were beaten down in the first six months of 2022, but they gained some momentum towards the end of last week as Taiwan Semiconductor Company [TSMC] posted a record profit for Q2, allaying fears over softening demand from high inflation and reduced spending. The industry has also been helped by the news that GlobalFoundries [GFS] and STMicroelectronics [STM] are partnering to build a factory in France that will boost European production capacity.