Video: Hermes, Tesla, Pilbara Minerals claim top spots so far in 2023; why their stocks could change course this week

Video: Hermes, Tesla, Pilbara Minerals claim top spots so far in 2023; why their stocks could change course this week

Jessica Amir
Market Strategist

Summary:  Lucid, Tesla, Hermes, LVMH, Pilbara Minerals and Sayona Mining shares were the best performers in the US, Europe and Australia in January, but their stocks could quickly change course depending on the Fed and ECB outcomes this week. Australian Mining companies could report triple digit earnings growth, with gold and lithium companies in the spotlight. Tesla has changed the EV landscape in Australia, offering its supercharging stations to all EVs, supporting the notion EV demand could rise down under, especially if the RBA cuts rates this year. We cover the stocks to watch.

What’s happening in markets?

The next three days could set the tone of markets for months, with the Fed Meeting starting Wednesday in the US, earnings from Meta on Thursday, followed by Apple, and Amazon and Google on Friday as well as US job report.

Where has the most momentum been in markets and can it continue?

It’s vital to reflect on the global equity markets rally in January - and where momentum has been. In the US the Nasdaq gained 10%, the S&P500 5.6%, with EV names, Lucid and Tesla up 40-70% off their lows. In Europe the biggest 50 stocks (Stoxx 50) gained 10% with designers such as Hermes and LVMH providing the most heat, up 18% on expectations of higher earnings as China reopens. Australia’s ASX200 lifted 6.2% with lithium miners Sayona Mining and Pilbara Minerals up the most, 37-27%. Ultimately the Fed's decision on interest rates and the outcome this week, along with the ECB's will put some of these gains to test. 
 

What to watch?

Australian full-year earnings season kicks off; will mining companies deliver triple digit growth  

February is an important time of year with full earnings season kicking off. ASX200 companies will report their 2022 profits and earnings, and guide for 2023, which could set the course for equites for the next few months. A company’s shares will generally do well if the company reports a better than expected outlook and results, and inversely their shares will typically sink if they disappoint. That said, the most earnings growth is expected to come from the Mining sector with well over 100% earnings growth (consensus); with gold and lithium companies are expected to outperform. BHP as an example, could report 17% dividend growth and it could give a rosy outlook after kicking off coal exports to China for the first time in two years. Energy companies are expected to report a 30% earnings jump and 300% revenue growth. For a list of stocks and inspiration refer to the Australia Resources basket.

Today, Credit Corp reports results, Pinnacle on Thursday, NewsCorp Friday. In the third week of February the season ramps up with CBA and Fortescue reporting Feb 15, on Feb 21, BHP reports, with Rio the next day, followed by Qantas.

Potential trading and investing ideas

Lithium companies are on fire, but what could be next? 


Consider watching Lithium companies like Pilbara Minerals and Allkem - trading around record high territory, but could see profit taking, with the technical indicators (MACD and RSI suggesting buying is slowing) in the short term ahead of the Fed’s decision on interest rates. Over perhaps the next half year we think lithium companies could head higher though, underpinned by the lithium market strength. But also because firstly there is a notion EV demand could pick up as the RBA could end rate hikes early this year. Secondly, Tesla opened its 50-supercharger stations around Australia to all EVs, with the stations previously locked to Tesla. And thirdly, EV companies are ramping up production; Tesla has a lofty target of making 2 million vehicles this year, Ford aims to product 600k EVs this year. meaning a lot more raw materials, such a lithium will be needed (as well as copper) for that matter.



Stay tuned to Saxo's
inspiration page for trading and investing ideas.

For a global look at markets – tune into our Podcast.

 

Disclaimer

The Saxo Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-hk/legal/disclaimer/saxo-disclaimer)

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. Saxo does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo or its affiliates.

Saxo Capital Markets HK Limited
19th Floor
Shanghai Commercial Bank Tower
12 Queen’s Road Central
Hong Kong

Contact Saxo

Select region

Hong Kong S.A.R
Hong Kong S.A.R

Saxo Capital Markets HK Limited (“Saxo”) is a company authorised and regulated by the Securities and Futures Commission of Hong Kong. Saxo holds a Type 1 Regulated Activity (Dealing in Securities); Type 2 Regulated Activity (Dealing in Futures Contract); Type 3 Regulated Activity (Leveraged Foreign Exchange Trading); Type 4 Regulated Activity (Advising on Securities) and Type 9 Regulated Activity (Asset Management) licenses (CE No. AVD061). Registered address: 19th Floor, Shanghai Commercial Bank Tower, 12 Queen’s Road Central, Hong Kong.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products may result in your losses exceeding your initial deposits. Saxo does not provide financial advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo does not take into account an individual’s needs, objectives or financial situation. Please click here to view the relevant risk disclosure statements.

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-hk/about-us/awards.

The information or the products and services referred to on this site may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and services offered on this website are not directed at, or intended for distribution to or use by, any person or entity residing in the United States and Japan. Please click here to view our full disclaimer.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc. Android is a trademark of Google Inc.