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European Markets closed in the red territory, despite the release of mostly positive manufacturing data for the Eurozone, the United Kingdom and Germany. Before markets opened, Volkswagen reported a growth in revenue in the second quarter, as Rio Tinto, Lloyds, BNP Paribas and ArcelorMittal also announced their financial results. Meanwhile, it's been reported that the United Kingdom is considering keeping the free movement of people even after its departure from the European Union, in case a post-Brexit deal on the matter is not reached.
The DAX was down 0.46% at the closing bell. Carmaker Volkswagen lost 3.69% after posting its earnings earlier in the day. The FTSE 100 ended the session with a 1.27% drop. Fashion retailer Next fell 7.01% after it said full-price sales growth slowed in the last quarter. The CAC 40 lost 0.25%. Auto supplier Valeo was the worst performer, declining 3.67% at the close.
On Tuesday, the tech giant Apple Inc. reported its positive financial results for the second quarter. Due to this, the company is close to hitting a historic milestone of a market capitalization of $1 trillion, the first one in history for a United States-based firm. Shareholders are looking for a price of $203.45 to reach the market capitalization milestone.
In the quarter ending June 30, iPhone revenue amounted to $29.9 billion, or 41.3 million units, while the software and services revenue rose 31% compared to the same period a year earlier to $9.5 billion. Meanwhile, the company said earnings per share came in above analysts’ expectations at $2.34. The iPhone maker slightly missed Wall Street forecasts for sales of the flagship handset, but surpassed estimates for average selling price. It also beat on earnings per share and revenue from the growing software and services segment.
Tesla investment continues
Tesla Inc. is expected to invest $5 billion in building a factory in China, media reported on Wednesday, citing sources familiar on the matter. The American electric car maker agreed to open a plant near Shanghai where its Model 3 will be produced.
With the existing trade tensions between Washington and Beijing, investing in the Chinese market is a more lucrative option for Tesla as demand for cars in China is on a rise. The company is considering looking for Chinese investors to finance part of the project, Bloomberg news agency reported. Model 3 manufacturing should start within the next two years.
Furthermore, as reported in one of my previous articles, the car maker is also holding talks with German authorities regarding a so-called Giga factory in Europe where it would produce electric cars and their batteries in one facility. At the same time, negotiations are currently in place with the authorities in the Netherlands, which is another option for a future European plant.
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