1. Currency “Flash Crash”
A surge of risk-aversion slammed into Asian currency markets this morning as investors headed for the hills, sending the Aussie Dollar (AUD) through the floor and the Japanese Yen into orbit.
Apple’s sales forecast cut was the culprit that caused the massive flight to safety which was aided by thin holiday volumes and vicious algorithmic selling, making the movements even more extreme.
In the space of 7 minutes, the Yen skyrocketed 8% against the AUD and 10% against the Turkish Lira, pushing the Aussie currency to its lowest level since 2009. By crikey!
With the Yen being a traditional safe-haven and the Aussie Dollar seen as a gauge for global risk appetite, it paints a rather grim picture of investor sentiment in the markets.
Both the Yen and AUD are expected to firm this year as the US Dollar’s strong run in 2018 potentially softens on a looser policy outlook from the Fed. All eyes will be on Jerome Powell tomorrow for any signs of fewer rate hikes to come as concerns of global growth have undoubtedly become more pronounced.
It’s crunch time, Mr. Powell.
2. EV’s Norwegian Takeover
The Norwegians have taken the lead in electric vehicle (EV) adoption with sales up an incredible 40% in 2018. A third of all vehicles sold in Norway are now zero-emissions, and the world is taking notice.
A seismic shift is happening in the car market and the smart manufacturers are scrambling not to be left in the dust of the likes of Toyota, Nissan, Tesla, Hyundai and many more. 2019 is undoubtedly set for the biggest boom in the EV market on record. Have you prepared for it?
General Motors scrapped multiple plants at the cost of thousands of jobs to restructure its business model to cater to the whirlwind of demand in the EV market, and investors responded positively to the strategic reorientation. If that doesn’t scream change, we’re not sure what does!
One persistent issue, however, is President Trump’s removal of the $7,500 tax rebate for EV’s which has already affected Tesla this year. In response, Musk’s generous $2,000 discount on all models, coupled with weaker sales data was met with an 8% slide in its share price yesterday….Yikes.
Nevertheless, despite the loss of the industry’s associated tax benefits, analysts remain confident that the EV boom is just getting started. So get plugged in, people!
Today we are watching…
1. General Electric (#ge)
After a dismal 57% decline in 2018, GE has started off on the right foot in 2019, bouncing 8% yesterday. The positive sentiment has emerged after announcements that the company intends on restructuring its business model. The plan includes spinning-off its profitable healthcare division, emphasising its promising aviation department and shoring up some of the debt on its books. Let’s see if they can make it happen!
2. Johnson & Johnson (#jnj)
Johnson & Johnson looks set for more pain as the controversy surrounding its knowledge of cancer-inducing asbestos in their baby talcum powder heats up. Sales in India, one of its largest markets, have dropped by 3%, adding to the company’s distress. Even the announcement of its 2.79% dividend may not be enough to stem the tide of selling should more incriminating evidence come to light.