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21st October 2022 Market Updates

FPG Fortune Prime Global Overnight headlines 

Overnight headlines

The 10-year US Treasury yield increased 9 basis points to 4.23 percent. Following Liz Truss’ resignation as prime minister, the UK 10-year yield increased 3 basis points to 3.89 percent.

Eight out of the 11 S&P 500 industry groups on Wall Street experienced declines, led by utilities and industrials.

Following underwhelming earnings and worries about future demand, Tesla fell. Longtime supporter of the company, Wedbush Securities, reduced its price objective from $US360 to $US300.

According to Bloomberg data, the average price objective for the business is $298, which is over 48% higher than where the stock was trading on Thursday morning.

In a note, JPMorgan analyst Ryan Brinkman stated, “We remain cautious on valuation, particularly in the context of ambitious unit volume growth assumptions, and continue to see meaningful downside risk to our December 2023 price objective.”

Bank of America, on the other hand, increased their price target by $10 to $325 per share. Tesla’s final price was US$207.28.

Because of its high valuation, which is mostly reliant on the company’s future development potential, risks to demand are a particularly sensitive issue for Tesla, according to Bloomberg. Compared to the S&P 500 Index’s 17 times, Tesla’s stock is currently trading at 48 times its projected earnings.

In order to fight inflation, interest rates are likely to be increased this year to “far above” 4%, according to Patrick Harker, president of the Federal Reserve Bank of Philadelphia.

Fed governor Lisa Cook stated that “inflation is too high, it must be brought down, and we will keep working until the job is done.” This probably calls for continuing rate increases and a protracted period of tight policy.

 

Market movements

  • Australian dollars up 0.1% to 62.77 US cents
  • Bitcoin down 0.7% to $US19,055
  • The Dow fell 0.3% on Wall Street. S&P -0.8% -0.6% Nasdaq
  • Stoxx 50 increased 0.6% in Europe. FTSE up 0.3%, CAC up 0.8% DAX +0.2%
  • Spot gold increased by 0.1% to US$1630.38/oz
  • Brent crude increased by 0.5% to US$92.86/barrel.
  • The 10-year yield was US$4.23%. 4.05% for Australia Europe, 2.39%

 

Today’s agenda

Local: Trade balance and credit card usage in NZ for September

Overseas data: September CPI for Japan; Eurozone consumer confidence in October; UK October consumer sentiment, public sector borrowing, and September retail sales

 

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