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TESLA is world’s most valuable car company

Chart of the Day: SP500 (4hr candlesticks)
Source: GKFX / MT4 (July 1, 2020)


•    Tesla now largest automaker by market cap
•    New Vaccine news boosts markets
•    US & China data impress
•    NFP Preview
 

MARKETS


Following the best quarter in decades, stock markets continued the run of good form on the first day of the second half of the year. The Nasdaq 100 reached a record high while the S&P 500 gained 0.5% and the Dow dropped 0.3%. Strong US economic data curbed demand for the dollar, which fell for a second day running, allowing some reprieve for currencies like the British pound. Gold tanked $30 per oz after coming just short of 8-year highs. A surprise draw in US crude stockpiles helped oil prices finish higher.
 

GURUS


“We want to perceive ourselves as winners, but successful traders are always focusing on their losses – Peter Borish
 

Tesla = wow!


Tesla is now the most valuable car company in the world. A 5% gain in the share price to record highs on Wednesday pushed the value of the company beyond Toyota for the first time. The shares are up 170% this year in unwavering investor belief in the role the company will play in the future of electric vehicles. The company has never turned an annual profit so P/E ratios are out the window. Until traditional car companies abandon petrol engines altogether, Tesla remains one of the few ‘pure EV plays’ for investors. 
 

New Vaccine


Risk sentiment was bolstered on Wednesday on news of a new vaccine. An article from STAT News Agency said Pfizer/BioNTech is developing a vaccine that is showing positive results. Every new positive vaccine trial result puts us closer to the end of a severe health crisis- the rest is an economic crisis, which is a little easier to understand on the part of investors. 
 

US Data


Data for May and June continue to surprise on the upside and that is helping offset concerns over rising coronavirus cases in some countries and US states. The US ISM manufacturing index for June unexpectedly switched into expansion territory with a reading of 52.6 versus the 49.8 estimate and a prior reading of 43.1. Likewise China Caixin PMI data topped expectations earlier in the day.
 

NFP Preview 


There is some chatter that technical/ data collection factors played a role in the huge beat in the massive positive surprise in the May NFP report. It was that report that helped another leg up in markets- so if some of its underpinnings were false, that could seriously undermine confidence in the recovery of the US economy. Wednesday’s June ADP employment report missed expectations with a rise of 2,369,000 jobs instead of the 2,900,000 estimate.

The S&P 500 has not taken out its June 9 peak but while it is above this rising trend line it can be considered to be in an uptrend, which suggests it will see higher prices.

 

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