New Zealand Market Movers
The New Zealand market (NZX 50 Index, +0.6%) rose on the back of the huge rally in Freightways (+5.9%).
The global dairy trade index (-4.6%) slumped overnight, with whole milk powder (-4.2%) and skim milk powder (-6.9%) cratering. Dairy stocks were mixed with A2 Milk (+1.0%) up, Fonterra Shareholders’ Fund units (0.0%) flat, and Synlait (-1.0%) falling.
Rua Bioscience (-1.9%) fell after reporting that they had received its first order via its German distributor, marking a significant commercial milestone for the medicinal cannabis company. Rivals Greenfern Industries (-6.0%) tanked on the day, while Cannasouth (+1.6%) found market support.
Australia Market Movers
The Australian market (ASX 200 Index, +0.3%) eked out a small gain on Wednesday, while only two sectors, Energy (-0.8%) and IT (-0.1%), closed in the red. Sectorial leaders included Utilities (+1.0%), Industrials (+0.9%), and Consumer Discretionary (+0.8%).
Origin Energy (-1.4%) held its annual general meeting yesterday and noted that it expects underlying earnings before interest, taxes, depreciation and amortization to climb to $500 to $650 million in the 2023 financial year (compared to $365 million the year prior). Further the company anticipates further earnings growth in 2024. Other Utilities stock performed better on the day, including APA Group (+3.4%), Infratil (+1.2%), and Contact Energy (+1.2%).
Europe Market Movers
European markets (Stoxx 600 Index, -0.4%) snapped its four-day winning streak on Wednesday.
Porsche (+1.4%) shares rose to €93.36 on their Frankfurt stock exchange debut, completing one of the largest ever public offerings in Europe.
In other news, UK inflation rose to 10.1% in September from 9.9% in August, returning to the 40-year high hit in July, which will put more pressure on the Bank of England to hasten interest rate hikes.
US Market Movers
US markets (S&P 500 Index –0.7%) snapped its two-day winning streak due to rising Treasury yields despite another batch of favourable corporate earnings.
10-year Treasury (0.1%) yields jumped to 4.12% on Wednesday as recession fears remain intact.
Netflix (+13.1%) and United Airlines (+5.0%) soared On Wednesday after posting better-than-expected earnings. The former reported +2.41 million net subscribers for the quarter, doubling its initial growth estimate.
Chinese listed companies were hit hard on Wednesday with the NASDAQ Golden Dragon Index (-7.1%) faltering under selloffs in Xpeng (-10.8%), Bilibili (-10.2%), Baidu (-8.8%), and Alibaba (-6.6%)
IBM and Tesla report after the bell.
Tesla (TSLA.NASDAQ)
Tesla shares are current down ~4% in after-hours trade, following the release of its third quarter result, as it warned bottleneck in transport capacity for delivering new cars in the final weeks of the quarter impacted total deliveries.
Adjusted earnings per share came in at $1.05, ahead of market expectations of $0.99. Revenue jumped +55% from last year to $21.45b, which was a touch lower than $21.96b expected. The company also reiterated it expects to continue to achieve +50% vehicle delivery growth annually, and its Semi electric heavy-duty truck will begin December this year.
When we look at this company as a car company, we think it is extremely overvalued, but, if we look at Tesla and view them as a tech company, we could say Tesla’s share price could easier to justify. However, even as a tech company we believe they are still overvalued. Tesla’s stock price is incredibly volatile which makes us uncomfortable, and the volatility will continue to be heightened at these levels. Many Tesla investors buy this stock because it is a revolutionary trend and are not considering the true worth of the company.
What Markets will be Watching this Week (UTC +13)
Monday
CN Balance of Trade for September
Tuesday
NZ Inflation Rate for Quarter 3
AU RBA Meeting Minutes
Wednesday
GB Inflation Rate Year-over-Year for September
Thursday
AU Unemployment Rate for September
Friday
JP Inflation Rate Year-over-Year for September