Wall Street In Focus
JUNO Summer 2020
19 October 2021
Wall Street is where the big money is. We’re seeing more Kiwis expanding their portfolios to the United States, says Bryan Wilmot of Stake.
The New Zealand Stock Exchange is home to 183 of New Zealand’s biggest and best public companies, some fabulous stocks, and a combined value of US$244 billion.
But many Kiwis are hunting opportunities outside New Zealand, adding shares from Wall Street.
You can see why. Take Amazon’s market cap, which is over six times the value of the entire New Zealand Stock Exchange. Staggering.
While size isn’t everything, the liquidity this brings – US$1.5 trillion of Apple is traded every day – is highly appealing to investors.
Moreover, it’s the home of world-leading companies, and Kiwis have done well this year snapping up ‘Covid darlings’ like Zoom for video conferencing and Peloton for home exercise equipment.
And while 2020’s unpredictability has created volatile markets; traders can profit from this uncertainty.
A range of index, commodity, and currency exchange-traded funds (ETFs) allow traders to make money whichever way the markets move. The US is a market for any season.
Wall Street is a big, diverse beast and at Stake, since we’ve been giving Kiwis access with no fees on trades, we’ve seen them flocking to it.
Stake’s 10 most popular stocks
(as of November 4)
1. Tesla (TSLA)
2. Apple Inc. (AAPL)
3. Nio Inc (NIO)
4. ProShares UltraPro Short QQQ ETF (SQQQ)
5. ProShares UltraPro QQQ (TQQQ)
6. Amazon.com, Inc (AMZN)
7. Workhorse Group Inc (WKHS)
8. Hyliion Holdings Corp (HYLN)
9. NVIDIA Corporation (NVDA)
10. Microsoft Corporation (MSFT)
Amazon (AMZN), Apple (AAPL), Microsoft (MSFT) and Nvidia (NVDA) are big tech companies that are universally in Stake’s top traded lists across the world. Clearly New Zealand is no different in trying to get behind some big tech.
What’s really interesting though, is that Kiwis, more than any other country, are going deep on the electric car industry beyond just Tesla (TSLA), which features in top traded lists in all our markets.
Nio (NIO) and Hyliionn (HYLN) are somewhat popular but not often among our top-traded, and Workhorse Group (WKHS) is rarely or ever featured in top-traded lists.
Clearly New Zealand has a real passion for renewables and is also backing EVs as they start to consume the automotive industry.
The last two stocks I’ll mention are interesting in that it is people taking positions and bets on the way the market is going to head.
SQQQ is an exchange-traded fund that tracks three times inverse to the Nasdaq. That means, when the Nasdaq goes down 1 per cent, this moves up 3 per cent. It’s effectively shorting the market.
TQQQ on the other hand, is an exchange-traded fund that is 3 times direct to the Nasdaq. That is, when the Nasdaq goes up 1 per cent, this goes up 3 per cent.
5 IPOs to Keep an Eye On
IPOs are initial public offerings, where new companies list for the first time on the stock exchange.
This year we’ve seen swathes of new names enter life as public companies.
The resurgence of reverse mergers and special-purpose acquisition companies (SPACs) provided a new way for companies to list, but the age-old IPO has provided an avenue for stocks like Palantir, Unity and Warner Music to get access to public markets.
Speculation has surrounded this unicorn for years while names like Uber and Spotify beat Brian Chesky’s company to Wall Street.
In August, the company announced it had filed for IPO. Airbnb opened at $146 per share on its first day of trading on December 10, more than doubling the $68 per share price set for its IPO the day before.
With seven million listings in 100,000 cities worldwide, the scalability of Airbnb is obvious.
It’ll be interesting to see how hotel chains react to this threat. Take Tesla, which has quickly made its way to being the most valuable car company in the world.
Tinder is already tradable through its owner Match Group ($MTCH).
In February, its closest competitor in the dating app world, Bumble, is set to debut. Bloomberg reports the company should go public at a valuation between US$6 billion-US$8billion.
What’s unique about Bumble is the power lies in women’s hands to make the first move.
The proposition has been valued by users because the app has ticked past 100 million users across 150 countries.
In fact, during the lockdown period, their user base increased by 25 per cent.
DoorDash is a prepared food delivery service. It listed on December 9 at US$102 per share and in its first day of trading, it rose 86 per cent to US$188.
Food delivery is a massively competitive industry with a score of companies fighting for low-value journeys.
DoorDash has fought through the competition to have almost half of the market share in the US, by most estimates. Competitors include GrubHub, UberEats and PostMates.
Another company powered forward by lockdowns, DoorDash is now available in 4000 cities to 20 million users. It’s expected to list for around US$16 billion.
Wish is a primarily mobile-based shopping app, connecting buyers with the factories where goods are produced. Its selling point is the price.
Wish acts as the home for all the knick-knacks and gadgets you never knew you wanted, unlike sites like eBay, which have a wider range of higher value and branded goods.
Wish priced its IPO at US$24 a share, then fell as much as 16 per cent on its first day of trading.
However, e-commerce is on a tear. Online shopping is an already-strong trend pushed exponential by lockdowns and it’s becoming the default option for consumers.
This growth in the market can also be seen in Shopify’s ($SHOP) 200 per cent gain this year.
To trade on the New York Stock Exchange, go to Stake and set up your own trading account, commission-free.
JUNO’s content comes from sources that JUNO magazine considers accurate, but we do not guarantee its accuracy. Charts in JUNO are visually indicative, not exact. The content of JUNO is intended as general information only, and you use it at your own risk.
Informed Investor's content comes from sources that Informed Investor magazine considers accurate, but we do not guarantee its accuracy. Charts in Informed Investor are visually indicative, not exact. The content of Informed Investor is intended as general information only, and you use it at your own risk.