Invast Blog

Tesla Powering On, International Opportunities Arising – Weekly Market Outlook with Peter Esho

Join Peter Esho as he details the key market events for the week ahead and the critical macro economic data for the week starting 17th of AugustĀ 2015.

Our focus over the past two weeks has been on the Australian banks. We spoke about the Commonwealth Bank of Australia last week and ANZ the week before. Our focus this week while reporting season is ramping up in Australia where there can be a lot of distractions is actually on a US technology stock. A stock which is also in the industry, a stock which you probably already heard of, a stock that is called ‘Tesla’.

Tesla came out last week and announced that they will be seeking to raise up to US$500 Million in the United States. Tesla is a business that is really been innovating the electric car space. A few years ago there were many doubts around Tesla’s technology and its ability to commercialize its product. Since then Tesla has continued to defy the skeptics, it is come out and grown its revenue. It still is not probably as profitable as what the market wanted but it is a business looking forward. It is a business that is looking towards growth. It is a business that went to market to seek US$500 Million and actually had to upsize its capital raising because the interest there from investors was quite large.

The implied market capitalization of this business is now in excess of US$30 Billion. To put that into perspective, that is more than half of the market capitalization of General Motors, a business that is been around for a very long period of time relative to what Tesla has managed to achieved in such a short period of time.

We think this highlights the talks of opportunities that there are in US market outside of the traditional names in the Dow components. So our focus this week is on highlighting the success of Tesla while Australian reporting season goes through. We think the Australian market will continue to trend lower. We think that the Australian banks have been a major distraction over the past few weeks and we see the Australian banks as a pocket of caution.

We will continue to encourage investors that are holding the banks to have a look at their portfolio, to re-evaluate their portfolio, to reweigh their portfolio to international opportunities like Tesla for example. We pinpointed Tesla for Invast clients in July last year and since then taking into consideration what the Australian dollar has done, it is been a great way to diversify outside of Australia and we think Tesla is a business that will continue to change the world.

It is a business that will talk about more and more. It is a business that will feature and a new strategy that were launching on our PortfolioSelect platform of driverless cars. We will tell you more about that in the coming weeks when that is ready but for now have a look at Tesla, have a look at the way that they came out to market expanded their capital raising, have a look at the opportunities outside of the Australian banks and have a look at proofing and insulating your portfolio from further downside moves in the Australian banks.

Traders involved in the market always need to know what events are unfolding and how that might affect the decisions they make in their portfolio. Therefore it is essential to get a snapshot of what will likely move the market this week.

Irrespective of whether you trade the ASX stocks, Forex, Indices, Commodities or international markets, you’ll get a great perspective on what to expect this week.

These are our initial impressions only, for further details please do not hesitate to get in touch via the details below:

Peter Esho

Chief Market Analyst
@PeterEsho

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