Happy Sunday!
I’m now back in the UK after a (very rare) holiday outside of the UK. Jersey turned out to be a much more interesting island than I imagined. I highly recommend visiting. The WWII sites/museums and castles were fascinating just on their own, but there’s loads more to see.
Anyway, with that said, let’s take a look at what’s happened this week. Thankfully, it seems to have been a quiet one; perfectly timed!
Key Events
US GDP Report (Q4 2022, Final Revision)
For Q4 2022, US GDP had previously come in at 2.7%.
On Thursday, the final figure came in. GDP for Q4 2022 was revised down slightly, to 2.6% quarter-over-quarter, lower than the expected 2.7% (i.e., no change). A little unfortunate, but not a concerning result.
UK GDP Report (Q4 2022, Final Revision)
Slightly better news for UK GDP.
The previous report for Q4 2022 suggested that GDP was flat compared to Q3 2022, with 0% growth.
On Friday, the final revision revised this figure up slightly, suggesting the economy instead grew by 0.1% in the quarter. This is a small revision upwards, but is likely seen as a relief. A revision downwards, suggesting a shrinking economy, would have reignited fears of an impending recession.
OPEC+ Announces Surprise Cut in Oil Production
Just a few hours ago, Saudi Arabia and other countries announced that they will cumulatively be cutting oil production by a further 1.16 million barrels per day. This comes just one day before a meeting of OPEC countries to discuss global oil production, scheduled for tomorrow, Monday 3rd April.
Analysts suggest this could cause oil prices to jump by around $10 per barrel (currently, crude oil sits at around $75 per barrel). This will be incredibly disappointing news for consumers, who were finally starting to see petrol and diesel prices fall. It’ll also be seen as a money-grab from OPEC states, who clearly don’t wish to see oil prices drop any further.
Stock Market News
Tesla (TSLA) – Q1 2023 Production & Delivery Numbers
Today, Tesla reported its production and delivery numbers for Q1 2023; a key metric that gives analysts an insight into vehicle revenues.
In the first quarter, Tesla delivered 422,875 vehicles (excluding Tesla Semi), slightly above the consensus estimate of around 420,000. This is a new quarterly delivery record.
In terms of production, the company produced 440,808 vehicles (excluding Tesla Semi). This is in line with Tesla’s projected goal of producing 1.8m vehicles in 2023.
In Q1, 19,437 Model S and X vehicles were produced, of which 10,695 were delivered. Regarding Model 3 and Model Y vehicles, 421,371 were produced in total, of which 412,180 were delivered.
Unfortunately, there still seems to be a large gap between deliveries and production for the company’s more expensive vehicles, the Model S and Model X. This will no doubt raise a few eyebrows. Analysts will question whether there is indeed a demand issue for these vehicles.
Tesla, however, simply attributes this gap to vehicles in transit. They state that they “continued to transition towards a more even regional mix of vehicle builds.”.
Virgin Orbit (VORB) – Company Collapses
On Friday, Virgin Orbit, a Richard Branson backed space company, announced it was ceasing operations.
The company had an interesting idea; launch small satellites from a modified Boeing 747 aeroplane, instead of from a ground-based launch pad.
Unfortunately, after just six launches since 2020, two of which failed, the company has run out of steam, and out of money. Richard Branson himself has refused to offer any further financial aid to the company, and instead will be the beneficiary should the company go bankrupt, as is likely the case. He will be the first in line to take over Virgin Orbit’s assets.
Next Week
OPEC Meeting
On Monday, OPEC members will discuss current energy markets and decide on any changes to the rate of production for oil. Previously, the group of 13 countries decided to slightly reduce oil output.
This meeting comes just a day after today’s surprise announcement of a voluntary oil production cut by some OPEC+ countries, totalling 1.16 million barrels per day.
Decisions made at these meetings can have a huge impact on oil prices across the globe, which in turn can have an impact on inflation.
Shell (SHEL) – Quarterly Update for Q1 2023
While Shell doesn’t report earnings until the beginning of May, they’ll provide a quarterly update on Thursday 6th April. This will give us an insight into what to expect. It’ll also give us an idea of how the recent drop in oil and gas prices have impacted the company’s margins.
Let me know your thoughts on this week’s events, in the comments below!
