Global markets were higher overnight with the Tech sector leading gains on Wall Street with Apple becoming the world’s first $1 trillion listed company.
US Stocks shrugged off trade tensions overnight which remain an ongoing concern for markets. Before the US trading session, stocks across Asia were lower, including Australia, as demand concerns weighed on commodities prices, which fell across the board as the US-China trade war deepened. The US is reportedly proposing to lift tariffs on $US200 billion worth of goods from 10% to 25% with China responding by saying it would take countermeasures.
Stock in Focus: Tesla (TSLA:Nasdaq)
Shares in Tesla jumped +16% overnight after the company convinced investors that it will able to yield positive cash flow and turn a profit, and Chief Executive Officer Elon Musk apologized for past provocative remarks.
Tesla said it expects to increase Model 3 production to 6,000 per week by late August, buoying expectations that the Elon Musk-led electric vehicle maker will meet its goal of profitability and positive cash flow in the next two quarters.
Tesla shares have been on a wild ride as the company divides investor opinion, and it is seems like it has been a while since the shares jumped post an earnings update. Following the move overnight Tesla’s value has once again moved above General Motors, making it the biggest US automaker – an amazing accomplishment from a standing start.
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 share market sold off on Thursday (ASX 200 index -0.55%) led by the Resources sector following a fall in commodity prices and as trade tensions between the United States and China escalated. Shares in Rio Tinto were hit particularly hard as its half-year profit result came in below market expectations. The mining giant delivered a 33% jump in first-half net profit to $US4.38 billion (A$5.9 billion) after the close of trade on Wednesday which was below expectations of $US4.53 billion.
The New Zealand market was slightly lower yesterday (NZX 50 index -0.12%) in light trading. Shares in honey producer Comvita and Sky Network Television lead the market lower. The NZ market remains in a quiet period ahead of local earnings season which gets fully underway next week with the likes of SkyCity reporting. Outside the benchmark index, Millennium & Copthorne Hotels reported a 24% lift in first-half profit as it benefited from growth at NZX-listed residential property developer CDL Investments and a steady tourism market, although it warned it is seeing increased competition.
3 Things Markets Will be Watching this Week
1. US corporate earnings season continues as investors digest quarterly company profit announcements.
2. Locally, investors in Australia and NZ will also turn their attention to corporate profit announcements which kick off this week.
3. NZ employment figures are released on Wednesday, the US Federal Reserve makes an interest rate decision on Thursday morning (AU/NZ time).
Have a Great Day,
Team