Daily dose of financial insights for investors and traders; plus six companies to watch including Fortescue Metals and Tesla
Summary: Five Minute Daily Dose of Financial Insights for Investors and Traders; covering what to watch this week in economic news, what could move markets and why to watch the NZDAUD. Plus, the latest from these six companies; Fortescue, Oz Minerals, Cisco, Ross Stores, Tesla, and Twitter.
What you need to know about markets now
- The major US indices closed in the red last week, but the S&P 500 managed to hold onto an ~11% gain from October 10, while the Nasdaq 100 managed to hold its gain of 9.2% since then. US stock and bond markets will be closed for Thanksgiving holiday Thursday.
- The Australian share market closed on the back foot as well last week, but holds a gain of 10.4% from October 3. The futures suggest the ASX200 could open 0.3% up on Monday.
- In Asia, Hong Kong’s Hang Seng ended the week up, extending its three-week rebound of 21%. The Futures indicate the Hang Seng could open 0.4% lower.
- The economic focus this week is on; OECD Economic Outlook Tuesday, FOMC minutes on Wednesday, and more Fed Speeches will be on Tuesday which could provide more hints on how high US rates may go and may cause volatility in the indices and invoke fear selling like we saw last week.
- In China, focus this week will be on; will authorities responding to the first Covid-related death in almost six months, sparking concerns it could lead to tighter restrictions, despite China implementing new 20-point tweaking covid restriction plan.
- In commodities focus is on those pegged to Chinese demand, such as iron ore, copper, and lithium. Speaking of iron ore; it could be volatile week for iron ore and iron ore stocks as India removed the export tax on steel products including iron ore. Oil will also be in focus with WTI falling 1.9% and after suffering its biggest weekly drop since April, losing 10% last week. Oil is now trading at $80.00, its lowest level since September.
- In earnings: Virgin Money, Deere & Co, Dell will be a focus this week with their earnings to be released.
- In FX: focus will be on NZD with RBNZ to poised to hike by 0.75%. A currency to watch will be the NZDAUD – given the RBNZ is hiking harder than the RBA can and this theoretically supports the NZD vs the AUD.
Six companies to be across include
- Fortescue (FMG) with iron ore falling 1.4% but holding onto a monthly gain of 27%. Fortescue Metals shares have gained about 36% in three week after China announced its property rescue plan.
- Oz Minerals (OZL) will also be focus down under after BHP increased its takeover offer for the firm. The Copper company OZL has gained 70% since July.
- Cisco (CSCO) will also be a focus this week after rising 2.6% on Friday, extending its rebound after reporting stronger than expected earnings and guidance last week.
- Clothing company Ross Stores (ROSS) rose 10% on Friday with traders expecting good Black Friday sales.
- Tesla (TSLA) is in the spotlight after it recalled over 321,000 vehicles in the US because of a tail light issue. It is the latest of multiple Tesla recalls in the US in recent months, including one recall involving over 40,000 vehicles for a possible problem with the EV steering system.
- Twitter (TWTR) is also in the news with Elon Musk considering firing more employees, allegedly in sales and partnerships.
For a global look at markets – tune into our Podcast.
Outrageous Predictions 2023: The War Economy
- The constantly growing global need for energy drives the world's richest to huddle up and launch a R&D project in a size the world hasn't seen since the Manhattan Project gave the US the first atomic bomb.
French President Macron resignsThe political stalemate in France and the rise of Marie Le Pen following the 2022 elections corners President Macron, forcing him to give up on politics and resign from his position. At least for now.
Gold rockets to USD 3,000 as central banks fail on inflation mandateAs markets and central banks realise that the idea that inflation is transitory is wrong, and that prices will remain higher for longer, gold is sent through the roof, hitting a price tag of USD 3,000
EU Army forces EU down path to full unionWith continued challenges in the region and a US military that isn't aggressively enacting its former role as global policeman, the European Union agrees to create its own armed forces, bringing the whole region closer.
A country agrees to ban all meat production by 2030In an effort to become one of the global leaders on the path to net-zero emissions, one country decides to not only put a heavy tax on meat, but to ban domestic production entirely.
UK holds UnBrexit referendumFollowing a recession and domestic pressure, the United Kingdom is thrown into political turmoil that will end with a vote to wind back Brexit.
Widespread price controls are introduced to cap official inflationHistory tells us that with the war economy comes rationing and price controls. And this time is no different, as policymakers introduce strict price controls that lead to a range of unintended consequences.
OPEC+ & Chindia walk out of the IMF, agree to trade with new reserve assetSanctions against Russia have caused widespread turmoil due to US Dollar moves in countries across the globe that don't consider the US an ally. To relieve themselves from this, they leave the IMF and create a new reserve asset.
USDJPY fixed to the USD at 200 as Japan overhauls financial systemFollowing the challenges that faced the Japanese Yen in 2022, the Bank of Japan attempts to keep the currency from sliding. Unsuccessful on the long-term, Japan will launch a reset of its entire financial system.
Tax haven ban kills private equityWith the war economy comes an increased focus on national interests and sovereign nations' ability to assert themselves. In that regard, the OECD countries turn their attention on tax havens and pull the big guns out, banning them altogether.