Jarden Brief: Tesla in turmoil after poor delivery effort

Tesla took a tumble overnight after failing to meet some market expectations. Photo / Getty

Keeping you up to date with the latest market moves, in association with Investment firm Jarden

International

US

US markets seemingly started October in recovery mode at the time of writing, proving some alleviation to their September sell-off. The S&P 500 had recovered 2.4 per cent, the Nasdaq Composite was up 2.1 per cent and the Dow Jones Industrial Average had climbed 2.5 per cent.

The recovery appeared to be led by an ease back in US treasury yields, with the 10-year note falling from over 4.0 per cent last week to 3.7 per cent at the time of writing.

The increase in yields had led to a rough September month for US markets, with S&P 500 falling 9.3 per cent over the month.

By sector, petrol companies led the market up, rallying after oil prices rose on news that OPEC+ was considering cutting oil production.

On the other hand, Tesla is currently the worst performing stock of the day, falling -8.3 per cent after failing to meet market expectations on its third quarter vehicle deliveries, which came in at 343,000.

Embattled exercise bike company Peloton was up by more than 6.0 per cent after the company announced a partnership with Hilton Hotels, which would see it place bikes in all 5,400 Hilton-branded hotels worldwide.

After surging in 2020 due to its higher sales from home exercise machines, Peloton's stock has struggled this year – falling almost 80 per cent year to date and more than 90 per cent in the past 12 months.

Rest of the World

European stocks closed higher after the UK government announced a reversal of its earlier plan to remove its top tax rate for high income earners.

Market analysts had almost universally been sceptical of the plan when announced 10 days ago, with many expressing fears that it would increase inflationary pressures by providing tax relief to those who did not need it.

The move had triggered an unprecedented selloff in UK government bonds, with 10-year bonds or 'gilts' surging by more than 100 basis points in a matter of days.

The European Stoxx 600 index climbed 0.8 per cent in response.

Commodities

Oil is currently trading 3.9 per cent higher at US$88.50 a barrel, following the OPEC+'s considered production cuts, while gold is trading up 2.2 per cent to US$1,696 per ounce.

Global currencies are seeing some recovery against the US dollar after its treasury yields fell over the weekend – with the NZD appreciating +2.1 per cent against the US dollar, the Euro recovering +2.2 per cent and the AUD up +0.5 per cent.

Bitcoin remained below the US$20,000 mark at the time of writing, up 0.8 per cent to US$19,583.

New Zealand

The New Zealand market extended its losses from last week on Monday, with the benchmark index falling -1.0 per cent following a poor US market performance over the weekend.

Property stocks underperformed the broader market as elevated rates continue to cause a drag on valuations. Sylvia Park owner Kiwi Property Group fell -3.8 per cent, while Commercial Bay owner and operator Precinct fell -3.9 per cent.

This is despite the latter announcing it had signed a 12-year lease with engineering firm Beca for a site that is currently in development.

Vista Group fell -6.7 per cent as the weakest performer of the day, tumbling back down after a Friday afternoon rally late last week.

Despite upgrading its guidance in late August, VGL's stock price has struggled to hold up since news that one of its customers and the world's second-largest cinema chain, Cineworld, filed for Chapter 11 bankruptcy in early September.

Australia

The ASX 200 traded down 0.3 per cent on quiet volumes, with several states including New South Wales observing public holidays.

Consumer stocks underperformed with Mighty Ape owner Kogan (-3.9 per cent) leading the pack down. Tech stocks also performed poorly following a rout in the US markets on Friday night, with Xero falling -2.7 per cent and EML Payments falling -3.8 per cent.

Meanwhile, energy stocks such as Ampol (+1.4 per cent), Woodside (+1.2 per cent) and Santos (+1.1 per cent) performed well, in line with other international oil companies following the OPEC+ news.

Infant formula manufacturer Bubs Australia announced that it has lodged a letter of intent with the US Food and Drug Administration, in an attempt to extend its ability to sell product in the US market.

The US infant formula market is the second biggest in the world, and was dominated by three major brands in a strict regulatory environment until a plant shutdown in early 2022 caused shortages across the country.

Bubs now seeks to extend the temporary license it received to export its product into the US market during the shortage which, if successful, would extend its ability to export product until October 2025.

Coming up today

Market analysts will likely be awaiting the Reserve Bank of Australia's Monetary Policy decision today at 2:30pm AEDT.

The majority of the market is expecting a 50 basis point rate hike, which would bring the official cash rate to 2.85 per cent.

Additional Australian data on home loans, job advertisements and building approvals are also set to be released throughout the day.

Internationally, Japan is set to release its Tokyo inflation numbers, while the Eurozone is expected to release Producer Price Index numbers – which are a leading indicator of inflation.

• For more information on the latest market moves, get in touch with Jarden.

All market pricing and announcements are sourced from Refinitiv, NZX and ASX.

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