30th September 2023 – 06th October 2023 | Another week in the markets
| S&P 500 | Nasdaq | VIX | DJIA | Russell 1000 | NYSE |
| 4,308.50 | 13,431.34 | 17.45 | 33,407.58 | 2,359.19 | 15,214.02 |
| 0.48% | 1.60% | -0.40% | -0.30% | 0.33% | -1.20% |
| Nifty 50 | Gold | Silver | Brent crude | USD-INR | EUR-INR |
| 19,653.50 | $1,847.00 | $21.77 | $84.43 | 83.11 | 88.01 |
| 0.08% | -0.94% | -2.79% | -8.34% | -0.08% | 0.08% |
Source: MarketWatch
Hello Saturday,
This week, 75,000 nurses and other medical workers go on a strike in the US, General Motors stock suffers amid a labour strike and possible recall, and BYD is close to taking over Tesla’s global EV delivery crown.
- Over 75,000 medical workers of healthcare company Kaiser Permanente, including nurses, pharmacists, and receptionists, go on a three-day strike, demanding higher pay and increased staffing levels, among other things.
- In the third quarter, Chinese automaker BYD’s battery-powered electric vehicle delivery numbers fell short of overtaking Tesla by only about 3,000 units.
- Exxon Mobil is in talks to acquire Pioneer Natural Resources for $60 billion; if successful, this deal will significantly increase Exxon’s oil production without it having to bear the risk of drilling new acreage.
- General Motors may have to recall 20 million vehicles over potentially faulty airbag inflators designed by ARC Automotive; GM stock takes a hit.
- Iraq to ban transactions in US dollars starting 2024, while Argentina might ditch its own currency and opt for complete dollarisation.
Taking stock | Nursing wounds | EV-erywhere | Festive shale | General Malfunction | Dollar drama | Invest wisely
Taking stock
Wall Street rallied on Friday despite the September jobs report coming in stronger than expected. For the week, the S&P 500 gained 0.48%, snapping out of a four-week losing streak. The Nasdaq, too, ended the week in the green, rising 1.60%. The Dow, however, dropped 0.30%.
Nursing wounds
2023 is on track to becoming one of the most pivotal years for labour strikes in the US, with unions across industries, including media and auto, going on strikes for better wages and working conditions. And now nurses and other medical workers have joined the fray as well.
On Wednesday, more than 75,000 unionised employees of Kaiser Permanente, the largest private non-profit healthcare company in the US, went on a planned three-day strike. The striking employees include nurses, dietary workers, pharmacists, optometrists, and receptionists across California, Colorado, Virginia, Oregon, Maryland, and Washington. The unionised striking employees represent 40% of Kaiser’s total staff.
This is the largest-ever healthcare sector strike in the US, and stems from acute staffing shortages, leading employees to be overworked and underpaid. This is primarily a consequence of COVID-19, during which about five million medical workers left their jobs due to occupational burnout. The pressure of this is being felt by the remaining workers in the sector, who are demanding higher pay, improved staffing levels, and a reformed bonus structure over the next four years.
They also want the minimum per-hour wage to be increased to $25 to keep up with the rising cost of living. As of now, Kaiser has agreed to raise wages across the board by 1.5% to 16% over the next four years, but the workers believe this offer to be inadequate.
Whatever calls Kaiser makes will have a significant impact on the rest of the sector, as it is one of the largest medical employers in the country. Other healthcare systems are also anticipating similar demands from their unions. Already, nurses and other medical staff at 11 facilities of Tenet Healthcare have voted to organise a strike later in the month over wage and staffing issues.
EV-erywhere
The electric vehicle (EV) market and the competition in the market are both growing rapidly. Global EV sales in the first half of 2023 reached a record 6.2 million units, reflecting a growth of 49%, with China being the largest EV market, accounting for 55% of global EV sales. And BYD, the biggest EV automaker in China, is now coming close to overtaking Tesla as the world’s largest EV maker.
Tesla missed Wall Street expectations of delivering 455,000 units in the third quarter, managing to deliver only 435,059 electric cars instead. BYD sold 431,603 battery-powered electric vehicles (BEVs) in the same period, falling short of snatching Tesla’s global delivery crown by around 3,000 units.
What’s interesting to note is that BYD produces both BEVs and plug-in hybrid electric vehicles (PHEVs), while Tesla only makes BEVs. So, when you look at BYD’s total sales, it’s actually far ahead of Tesla. Last year, BYD sold 1.8 million cars, out of which more than 911,000 were BEVs, while Tesla sold about 1.3 million BEVs. As of the first half of 2023, too, BYD’s total EV sales, including BEVs and PHEVs, exceed Tesla’s.
Source: Canalys
Festive shale
Exxon Mobil is in advanced talks to buy shale-focused Pioneer Natural Resources in a $60 billion deal. If the deal goes through, not only would it be Exxon’s biggest since its acquisition of Mobil in 1999, but would also make it one of the top producers in one of the most lucrative US oil basins, the Permian basin.
The Permian basin stretches across Texas and New Mexico, and is one of the most coveted in the US energy industry owing to its relatively low costs for oil and gas extraction. Pioneer is the third-largest oil producer in this basin after Chevron Corp and ConocoPhillips. Exxon managed to produce about 620,000 barrels of oil equivalent per day (BOED) in the Permian basin in the second quarter, while Pioneer averaged 711,000. Hence, this acquisition would be greatly beneficial to Exxon, allowing it to increase its production without taking the risk of drilling and developing unproven acreage.
General Malfunction
On Thursday, General Motors’ stock price fell below $30 a share during intraday trading for the first time in three years. The ongoing United Auto Workers (UAW) strike has not been helping, and has already cost the Detroit-based automaker about $200 million in the two weeks since it started. But this most recent share decline happened after it was reported that the company had at least 20 million vehicles with a potentially dangerous airbag part that the government says should be recalled.
US auto-safety regulators have been pushing to recall 52 million air-bag inflators designed by ARC Automotive, a Tennessee-based auto supplier, since they are at risk of exploding during a car crash, the consequences of which are severe and potentially fatal. Earlier, it was not known just how many of GM’s vehicles would be impacted. But now that the number has come to light, it makes GM the most exposed automaker in this potential recall.
GM has already recalled about 1 million cars due to this issue, and the company reiterated this week that the current data does not provide a basis for any further recalls.
Dollar drama
Countries around the world are increasingly focusing on de-dollarisation to erode the dominance of the greenback. And now Iraq has decided to ban cash withdrawals and transactions in US dollars starting January 1, 2024. While the primary reason cited for this is to avoid the misuse of its hard currency reserves for financial crimes, de-dollarisation is also a factor.
Despite this push for de-dollarisation in most corners of the world, Argentina might just opt for complete dollarisation soon. The front-runner in Argentina’s presidential elections, Javier Milei, has proposed completely replacing pesos with US dollars. Milei believes that dollarisation will help the country deal with its sky-high inflation, which hit 124.4% in August — its highest level since 1991.
Invest wisely
Situations like labour strikes can be a good buying opportunity for blue chip stocks like General Motors, which have historically bounced back after a deal is reached. It allows you to buy good stocks at discounted prices and benefit from capital gains over the long run. The critical element to capitalise on opportunities like these is timing. And Appreciate allows you to access the US market in a quick and simple manner to make the most of such time-sensitive investment opportunities. So, download the Appreciate app today and strike while the iron is hot!
Warm regards,
Another week
in the markets
