Tesla shares +40% this month!!

MARKETS

The S&P 500 hit a new record high for a second day running spurred on by more gains in Apple but also by travel stocks. Shares in Asia and Europe both gained with the DAX and CAC indices rising over 2%.

The US dollar pulled back from the gains made on Friday as traders sold havens and bought risky assets. Forex traders are in wait-and-see mode for Fed Chair Powell’s speech at Jackson Hole on Thursday.

Gold and silver prices dropped but remained within the volatile consolidation that has been in place for the last fortnight.
 

GURU WISDOM

“It amazes me how people are often more willing to act based on little or no data than to use data that is a challenge to assemble.” ― Robert Shiller
 

Tesla Momentum

The momentum in Tesla shares is truly extraordinary for a large company. The shares are up +400% this year and +40% this month. Today the shares hit a new record high after jumping 4%, though pulled back afterwards. Like we discussed yesterday with Apple, Tesla’s latest rise is seemingly in the run up to the 5:1 stock split, which does not affect the underlying value of the company, only its attractiveness to smaller investors.
 

Travel Stocks

A combination of falling COVID-19 cases in the United States and news that the CDC has approved ‘emergency use’ of plasma treatment for COVID-19 and US President Trump announcing the possible fast track approval of the AstraZeneca vaccine all bolstered optimism on Monday. The improved chance of moving past the pandemic and returning to normal travel routines boosted travel stocks including Delta, American Airlines and Norwegian Cruise Line.
 

No oil storm

In day’s gone by, US refinaries shutting down oil production in reaction to two storms heading toward the gulf coat would likely cause a jump in the oil prices. But because demand for fuel is so suppressed by the pandemic, there has been a very muted reaction in US oil, which rose just +0.12% today. The prices moves were a little more substantial in Natutral Gas, where a lot more production went offline in preparation for the storms.