US GDP Beat | Tesla Surges 

27 January 2023

New Zealand Market Movers 

The New Zealand market (NZX 50 Index, +0.2%) rose slightly on Thursday.  

Supplement maker Me Today (+27.3%) led percentage gains, jumping to 1.4 cents per share, in very light trading. Small-cap tech stocks were mixed, including Rakon (-1.0%), Serko (+6.6%), Scott Technology (-0.7%), Eroad (-1.1%), and ikeGPS (+5.4%). 

Mercury NZ (+0.4%) advanced after delivering its quarterly operational update, which noted that the past December had been one of the wettest on record, leading to a +38% increase in hydro generation for the December quarter compared to the previous corresponding period. 

We choose to be more cautious and make some changes to our NZ portfolio, trimming down positions and increasing our cash. Lower Spark –1% down to 11%, Lower EBOS –1% down to 8%, Contact Energy down –1% to 5%, and Flecther Building down –1% to 3%. This will increase our cash from 10% to 14%, and with the upcoming Pushpay takeover then eventually increase cash in our NZ portfolio to 20% – with the aim to deploy funds later in the year once volatility subsides.  

Australia Market Movers 

The Australian market (ASX 200 Index, 0.0%) was closed on Thursday in observance of Australia day. 

Just like our NZ portfolio, we will trim positions in our Australian portfolio. Lowering Telstra down –1% to 5%, ANZ down –1% to 5%, Westpac down –1% to 6%, Macquarie down –1% to 4%, James Hardie down –1% to 2% and Costa group down –2% to 2%. This will increase our cash +7% to 21%.   

Europe Market Movers  

European markets (Stoxx 600 Index, +0.4%) closed in the green on Thursday, with Retail stocks (+2.2%) leading sectorial gains.  

US Market Movers 

US markets (S&P 500 Index +1.1%) have been buoyed by corporate earnings from Tesla (+11%) and fourth-quarter GDP coming in above expectations, at +2.9%, above expectations (+2.8%), and down from the third quarter rise of +3.2%. 

US GDP data released overnight showed the US economy grew but at a slowing rate over fourth quarter of 2022, but managed to beat expectations nonetheless. Consumer spending slowed and residential investment plunged, but government spending and stronger business investment provided an offset. Still, the future is more important than the past and there is plenty of speculation about a hard landing in the US this year as the tightening cycle reaches maturity. 

Tesla shares surged +11% after posting record revenue and earnings for the fourth quarter of 2022, beating market expectations. The stock is now up +42% for the year, and have recovered most of its losses suffered in December. 

Stock in Focus: MOËT HENNESSY LOUIS VUITTON (LVMH) 

LVMH (1.17%) reported record results, defying a year where consumer spending has been challenged – revenue increased 23 per cent to €79.2bn whilst net profit grew 17 per cent to €14bn. In addition, the Arnault-controlled behemoth increased its dividend by 20% to 12 euro per share. The luxury house’s results are in stark contrast to smaller peers like Richemont and Burberry, who reported decreased sales that were impacted by China’s COVID-related shutdowns. LVMH is a component of our US Model Portfolio and we continue to rate the stock a buy, in our view it is the strongest luxury company in the world that is comfortably diversified by its exposure to luxury spirits and champagne. 

 
What Markets will be Watching this Week (UTC +13) 

Monday 
NZ Westpac Consumer Confidence DEC 

Tuesday 
NZ Balance of Trade NOV  

NZ ANZ Business Confidence DEC 

AU RBA Minutes of Dec Policy Meeting 

Earnings From Microsoft, Johnson & Johnson 

Auckland International Airport Monthly Traffic Update 

Wednesday 
EU Consumer Confidence DEC 

CPI (Inflation) data for Australia and New Zealand 

Earnings from Tesla 

Quarterly updates from Fortescue, Woodside Energy and Mineral Resources 

Thursday 
GB GDP Growth Rate YoY Final Q3 

Bank of Canada Interest rate decision 

Earnings from Visa, LMVH, Mastercard 

Friday 
US Chicago Fed National Activity Index NOV 

US fourth Quarter GDP 

Earnings from ResMed 

Saturday 
US Durable Goods Orders MoM NOV 

US markets (S&P 500 Index +1.1%) have been buoyed by corporate earnings from Tesla (+11%) and fourth-quarter GDP coming in above expectations, at +2.9%, above expectations (+2.8%), and down from the third quarter rise of +3.2%. 

Do You Want Daily Market Insights?

If you’re interested in staying up-to-date with the latest news and analysis on stocks, be sure to sign up to BlackBull Research.

1 Month Free Trial

Access our expert stock market research Free of charge with no obligation

Free 1 Month Free Trial

Unlock this article & access our expert stock market research

ASX, NZX & USD Stock Buy, Hold, Sell recommendations. Model Portfolios. Daily news and more

[pmpro_checkout]