By Joshua So Happy July Fourth weekend, a time to celebrate jobs report, promising vaccine news, government spending, and Kanye West running for president in 2020, all of which will affect the market in some way or another. In the last four days, the DOW is up 800 points. A large part of that is investors' optimism about vaccine development news and the jobs report which is showing the “roaring back” economy. Another significant factor has been Tesla’s insane stock price change, breaking 1200 after shattering expectations. Since many people hold Tesla in the MarketWatch game, I’ll explain more. Tesla right now is the highest valued car company in the world, more than Toyota. Last year Tesla sold 300,000 cars while Toyota sold 11 MILLION. The reason why Tesla is “more valuable” is because its stock price doesn’t reflect what the company is, rather than what it could be. There was a time Tesla could’ve gone bankrupt easily, but now they’re at a size where fears of bankruptcy have subsided and optimism about its future value is high. This is one massive factor to consider when investing in stocks. Is the company trading at its current value or is it trading at its future value?
On the political side, the federal government decided from the start they were going to spend their way to mitigate the COVID crisis. The continuing debate is how far into oblivion are they willing to spend on stimulus money. The more stimulus money spent now, the better the economy, but keep in mind it WILL come back to bite our generation Z. Finally, you all have probably heard Kanye West says he’s running for president, which is… hilarious because he has no campaign set up, the election is 4 months away, and yet there’s a certain type of cynicism in me that keeps in mind the possibility that this isn’t just a joke. If he ran as a third-party candidate, would he take right-wing votes from Trump as a Christian icon? Would he take some of the Black votes from Democrats? Would he mobilize young voters to start voting early? I may be reading too far into this. Perhaps not though, since a strong independent or third-party candidate still has the power to swing an election which WILL directly affect the market. Hope this finds you well, Joshua So
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Where we update others about current events and how they may affect the economy and market.
Authors| Joshua So | Archives
October 2020
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