Global markets flipped between gains and losses overnight, with shares on Wall Street ending the session higher. Investors digested mixed company earnings announcements, with Facebook disappointing, while stocks such as Tesla beat expectations.
Also, the US Federal Reserve voted to keep interest rates on hold in the US early on Thursday morning, pointing to the health of the world's largest economy. Unexpectedly, the Fed made further comments around low inflation, indicating a bias towards cutting interest rates.
Stock in Focus: Tesla (TSLA:Nasdaq)
Tesla shares soared to new all-time highs as the company reported fourth-quarter earnings of $2.14 per share, well ahead of expectations for $1.72 per share. It said it expected positive cash flow and net income on a continuing basis going forward barring one-time production investments. For 2020, Tesla said vehicle deliveries should “comfortably exceed 500,000 units
Tesla continues to fire on all cylinders, wit robust initial order intake in China causing the company to already expand M3 capacity, Model Y production launching earlier than expected, and building of its Europe factory, which could eventually supply a very large market for BEVs. For the quarter, Tesla also demonstrated solid pricing for its Model 3 and continued underlying margin improvement.
We currently have a HOLD rating on Tesla
Members should look out for a full update on Tesla to be released in our weekly report.
Australia & New Zealand Market Movers
The Australian market was lower on Thursday (ASX 200 Index -0.33%) following volatility on confirmation the number of coronavirus cases had risen sharply, overtaking the total infections associated with the 2003 SARS (severe acute respiratory syndrome) outbreak. Companies exposed to the economic impact of the outbreak include Corporate Travel Management, which closed 4.7% lower, study-abroad facilitator IDP Education, which dropped 6.1%, and Webjet, which fell 6.9%. Despite Fortescue Metals Group reporting a strong first-half production result, it too was unable to avoid the sell-off.
The New Zealand market was mixed yesterday (-0.1%) as defensive stocks such as Spark New Zealand insulated the wider market from a new wave of concerns over the coronavirus outbreak. Stocks with exposure to China - SkyCity, A2 Milk, Air NZ, and Auckland Airport returned to their negative trend, while Tourism Holdings bucked the trend. Oceania Healthcare drove up trading volume after cornerstone shareholder Macquarie Group sold its 41% stake in the company to a mix of institutional and retail investors. The shares were sold for $1.20 a share in an underwritten sale, a 4% discount to the previous close of $1.25..
3 Things Markets Will be Watching this Week
- US Earnings get into full swing with a number of market heavyweights reporting profits.
- Coronavirus Headlines.
- The US Federal Reserve makes an interest rate decison on Thursday
Have a Great Day,