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.
Q4 Outlook 2022: Winter is coming
- Winter is coming to the financial markets as central banks are tightening their grip. How spring will look is still a question.
European energy crisis: it will get worse before it gets betterThe winter in Europe will be tough, but whether the result is political chaos or sustainable, innovative solutions is still undecided.
A difficult and volatile quarter awaitsAs the year draws to an end, commodities continue to be at centre stage of the world with growth pockets political uncertainty.
The bright side: crises drive innovationThe positive spin on crises is that they come with solutions. It is worrisome that deglobalisation may be a response to this crisis.
Green transformation in China: renewable energy and beyondGoing green, China needs to span numerous energy sources to ensure stability, as every source comes with a challenge.
Asia: Intermittent solutions, but a faster renewable adoption curveAsian energy supply is being squeezed. This and the adoption of renewables may change the investment sentiment in the region.
FX: A Fed thaw needed to deliver a sustained USD turn lowerThe US Dollar can keep momentum when the Federal Reserve continues to tighten, leaving the rest to play to their drum.
Autumn can become ugly for equities and bond holders. Comfort for Dollar longsTechnical analysis suggests that equities could face a tough Q4 as could fixed income. US Dollar positions could provide some upside.
The next stock market sector to watch, with stocks going nuclearAs the world scrambles to find affordable, sustainable energy, nuclear is getting attention from politicians and investors alike.
The crypto space is getting cold when the hype disappearsCryptocurrencies face a winter of their own as retail investors and governments are asking tough questions.