US markets (S&P 500 Index +0.3%) ended Wednesday in the green after a choppy session, perhaps exhausting the extreme sell-off sentiment from the previous day. The unexpected result from the US inflation report released on Tuesday had prompted speculation that stocks could start to head back to their June lows in reaction to a more aggressive Federal Reserve.
Top performers of the day include Moderna (+6.2%), Starbucks (+5.5%), and Royal Caribbean Cruises (+5.4%).
European markets (Stoxx 600 Index, -0.8%) closed lower on Wednesday, as European investors were sensitive for a second day to the US inflation data.
Tesla Inc (NASDAQ: TSLA)
Tesla (+3.4%) was one of NASDAQ’s best performers on Wednesday.
TSLA’s rise places it back above $300 per share, a territory the stock fell below after Tuesday’s broad-market rout.
Helping TSLA fend off broad investor pessimism is the company’s improving supply chains.
On Monday, Tesla’s vice president of investor relations Martin Viecha spoke at the invite-only Goldman Sachs tech conference. Viecha noted that the company’s battery supply chains are the best they have ever been, and Tesla can now buy all the cells it needs, for both its vehicles and energy-storage products.
From our point of view Tesla is a great company, and the implementation and goal of their business model is becoming more fixed. Tesla has transitioned from a risky company that could have the potential of failure to a company that has cemented itself in the auto manufacturing market, Tesla is here to stay.
We are HOLD rated, as many have failed to short sell the stock, which is being driven by its popularity as opposed to fundamentals right now
Australian & New Zealand Market Movers
The Australian market (ASX 200 Index, -2.6%) tumbled on Wednesday, shaving off 60 billion worth of value. Almost every stock and every sector index ended the day in the red.
Real estate (-4.2%), IT (-3.2%), and Consumer Discretionary (-3.1%) led the market down.
Zip -(6.4%), Megaport (-10.0%), and Block (-5.1%) were some of the worst performers in the IT sector.
The New Zealand market (NZX 50 Index, -0.9%) was not immune to the global sell-off. Only 31 of the 135 stocks on the exchange ended the day in the green.
Two retail stocks, Warehouse Group (+3.4%) and Briscoes Group (+2.1%) led the positive side of the market. Briscoes released its earnings for the six months to July 31 showing that its total sales increased 2.7% to $367.9m. The company noted that this figure is a 21% improvement over the most recent comparable pre-pandemic period.
The NZX will be closed on Sept 26 to honour Queen Elizabeth II.
What Markets will be watching this week
Monday
/
Tuesday
US CPI (Inflation) Data for August, James Hardie investor Day, NZ August housing data from REINZ
Wednesday
US PPI (Producer Inflation), Data, UK CPI and PPI data
Thursday
US retail sales data, Australian employment figures and NZ 2nd Quarter GDP data
Friday
Eurozone CPI data.