The ASX is set to rise for a second consecutive day. The ASX200 closed 91 points (-1.54%) higher yesterday at 7,115. ASX Futures (SPI 200) imply the ASX 200 will open today 41 points higher, up 0.58%.
The Utilities (+3.83%), Real Estate (+2.78%) and Energy (+2.63%) sectors performed best, while the Financial (+0.47%) and Communications Sectors (+0.04%) were the hardest hit.
A positive day on the ASX today would come on the back of two green days for US stocks, which bounced higher amid growing consumer confidence data (108.3 vs 101 exp – which lifted to its highest level since April) and strong corporate earnings. Quarterly results from Nike (NYSE:NKE) and FedEx (NYSE:NYSE:FDX) eased recession fears.
Note the average 2023 S&P 500 forecasts among investment banks is 4,038 and the US market is heading into a strong time of year.
Here’s what we saw (source Commsec):
- The Euro fell from highs near US$1.0642 to lows near US$1.0589 and was near US$1.0610 at the US close.
- The Aussie dollar lifted from lows near US66.58 cents to highs near US67.27 cents and was near US67.10 cents at the US close.
- The Japanese yen eased from 131.54 yen per US dollar to JPY132.49 and was near JPY132.30 at the US close.
- Global oil prices rose by almost 3% on Wednesday after data showed a larger-than-expected draw in US crude stockpiles. Inventories fell by 5.89 million barrels last week, according to the US Government, compared with analyst estimates for a drop of 1.66 million barrels.
- The Brent crude oil price rose by US$2.21 or 2.8% to US$82.20 a barrel.
- The US Nymex crude oil price gained US$2.06 or 2.7% to US$78.29 a barrel.
- Base metal prices climbed on Wednesday.
- Copper prices rose by 0.4% on investor expectations that China's easing of COVID-19 restrictions will eventually lift demand.
- Aluminium was up by 1%.
- The gold futures price settled unchanged from the previous session at US$1,825.40 an ounce.
- Spot gold was trading near US$1,815 an ounce at the US close.
- Iron ore futures lifted US88 cents a tonne or 0.8% to US$110.74 a tonne, as China's steady stream of supportive policy measures improved the likelihood of a recovery in the housing market.
Tesla (NASDAQ:TSLA) gets smashed, but it’s not the worst performer in 2022
Tesla Inc (NASDAQ:TSLA) shareholders seemed pretty happy about Elon Musk’s announcement that he would step down as CEO of Twitter.
Musk’s Twitter poll seemed to be designed as a way out of the mess he’s got himself into with the social media platform and he’ll step down as soon as he finds “someone foolish enough to take the job!”.
In the meantime, Tesla shares eased for a fourth straight session closing at $137.57.
Musk has defended Tesla’s stock performance in 2022, particularly in the wake of his Twitter disaster.
Tesla stock has plummeted by 61% this year, making it the 11th worst-performing stock in the S&P 500 in 2022.
“As bank savings account interest rates, which are guaranteed, start to approach stock market returns, which are *not* guaranteed, people will increasingly move their money out of stocks into cash, thus causing stocks to drop,” Musk tweeted.
Given the drop in price, it would be safe to assume Tesla would have wiped out more shareholder wealth than any other stock this year.
That would be a bad assumption.
At the top of the poor-performing heap is Amazon.com Inc (NASDAQ:NASDAQ:AMZN).
Amazon investors have lost $804.6 billion this year and the stock is down 48% in 2022.
Apple Inc (NASDAQ:NASDAQ:AAPL) and Microsoft Corp (NASDAQ:MSFT) have also lost big and suffered bigger market cap declines than Tesla – based on size.
Amazon showed a net loss of $3 billion for the first three quarters of 2022, compared with the $19 billion booked in profits during the same period in 2021.
Retail sales are weak coming into Christmas, web services are facing increased competition from the likes of Microsoft and the growth of the cloud business has stalled
CEO Andy Jassy said the company was working methodically toward “a stronger cost structure for the business moving forward.”
The five worst-performing stocks in market cap over the year are:
- Amazon – down 48% in 2022 and US$805BN in market cap
- Apple Inc – down 24% in 2022 and US$753BN in market cap
- Microsoft Corp – down 27% in 2022 and US$700BN in market cap
- Tesla Inc down 61% and US$622BN in market cap
- Meta Platforms Inc (NASDAQ:FB) Class A down 64% and US$466BN in market cap.
Foreign Minister Penny Wong met with her Chinese counterpart Wang Yi in Beijing on Wednesday, in what is a positive, albeit necessarily cautious, step towards bridge building.
High on the agenda was the release of two Australian citizens jailed in China and a resumption of consular access to foreigners in prison.
“We advocate for a range of things,” Wong said after the 90-minute meeting.
“They include for those Australians to be reunited with their families as soon as possible, but we also advocate for the observance of consular agreements.”
Human rights issues were also part of the discussion.
On the economic side, Wong hinted at developments with various trade issues, including “blockages” impacting around $20 billion worth of Australian exports.
“In the context of trade, there was a discussion about opportunities for further dialogue to work through how we might do, what I think is in the best interest of both countries and consumers ... and certainly in terms of Australian exporters and Chinese consumers, and that is for the trade blockages to be removed,” she said.
Wong has called for more dialogue between the countries.
Wang acknowledged the Australia-China relationship had suffered “difficulties and setbacks” recently.
Australia’s Ambassador to China Graham Fletcher said, “There are lots of things that Australia and China can work well together on ... like climate change, renewables (and) health.”
China-Australia Chamber of Commerce in Beijing chair Vaughn Barber welcomed the meeting as a first step to stabilising business investment decisions for Australian businesses working in China.
“The opportunity to stabilise relations is highly welcomed by the Australian business community here in China,” he said.
“This is a positive step forward.”
Australia wants annual leaders' meetings with China to resume.