Geoffrey Smith 

Investing.com – Tesla (NASDAQ) has a market value of $1 trillion. This was after Hertz Global signed a major contract. Facebook (NASDAQ) has cushioned soft revenue growth by increasing its buyback program. Microsoft (NASDAQ;) and Google parent Alphabet, (NASDAQ:), are scheduled to announce earnings after the close. General Electric UPS and (NYSE:) get earnings rolling before the open. Janet Yellen, Liu He are unable to move forward on trade issues. The American Petroleum Institute updated its estimates of oil stocks in light of the fact that prices have hovered near their seven-year peak. What you need to know about the financial markets for Tuesday, 26 October. 

1. Tesla joins the Trillion-Dollar club

After Hertz Global announced a large order, Tesla’s stock jumped 12.7% to become the first automaker valued at $1 trillion.

The deal, for 100,000 Model 3 cars over 14 months, is by far the biggest in Tesla’s history. While it’s not the first big order for electric cars from a rental firm, it represents a big landmark in EVs’ journey into the mainstream.

Elon Musk, CEO of Tesla, tweeted that Hertz would not give a discount on the cars. The tweet was a deviation from usual carmakers/rental firms dynamics that underlines Tesla’s pricing power. But it is not clear if an order for $4.2billion can be justified by the increase in nearly $120billion of market value.

2. Facebook’s buyback softens the blow of slower growth

After-hours trading saw Facebook share prices rise by nearly 3 percent after Facebook announced that its stock buyback program would be increasing in value to $50 billion.

The social media giant’s revenue growth slowed to 35% on the year, from over 50% in the first half, as Apple’s new privacy rules made it harder for advertisers to target Facebook users, and its guidance of $31.5 billion to $34 billion in revenue in the current quarter was below analysts’ forecasts. The earnings per share however were higher than expected.

Facebook also said it will spin off its augmented and virtual reality operations, investment in which will shave $10 billion off the company’s bottom line this year.

3. Stocks to Open Higher; Alphabet and Microsoft Earnings Due

U.S. stock markets are set to open higher later, with Facebook’s buyback and the sharp rise in Tesla on Monday helping to keep sentiment buoyant.

At 6:15 AM ET (1115 GMT), we were up 102 points or 0.3% while we were up 0.4% to 0.6%

Microsoft and Alphabet are the top earnings reporters, although they report following the close. Early reporters include UPS, General Electric, S&P Global (NYSE:), and defense giants Raytheon (NYSE:) and Lockheed Martin (NYSE:

4. Yellen and Liu He comparison notes

Treasury Secretary Janet Yellen and China’s top trade negotiator Liu He spoke by telephone, but failed to make any substantial progress on ongoing points of contention between the U.S. and China.

A statement from the Chinese commerce ministry said that Liu had raised concerns about the ongoing tariffs on Chinese exports to the U.S., put in place by President Joe Biden’s predecessor Donald Trump. The tariffs haven’t stopped U.S. imports from China rising to record levels as consumers have shifted spending away from services toward goods during the pandemic.

Elsewhere in China, another real estate developer, Modern Land, defaulted on an international bond citing “unexpected liquidity difficulties” and hitting Chinese property shares. China Evergrande, a heavily indebted company, escaped official default last Wednesday and faces a new payment deadline for Friday.

5. API inventories rise ahead of oil prices

Crude oil prices eased off Monday’s highs as the market digested a series of comments from officials in OPEC countries that ultimately added little to market expectations of the bloc’s production policy.

At 4:30 pm ET, the American Petroleum Institute will release U.S. inventory data. These are expected to reveal a slight increase of slightly over 1,000,000 barrels. Indirect impact may be also possible from other U.S data such as the Conference Board consumer confidence index, and Richmond Fed’s business survey.

U.S. crude futures had fallen 0.5% by 6:38 AM ET to $83.38/barrel, and futures declined 0.2% to $85.00/barrel at 8:05 AM ET.