Week 6 in Brief
Tesla stock left the accelerator on an electrifying run this week, surging on Tuesday after major shareholder Ron Baron forecast the company will top $1 trillion in revenue in a decade. Investors who bet against the stock scrambled to catch amid fear of mission out. However, some analysts maintain that this wildest stock story of the week could also be the most dangerous. At its peak, Tesla shares were up 48 % on Tuesday but dropped nearly 18% on Wednesday before recovering by about 4% Thursday amid fears the coronavirus will delay Model 3 deliveries from China. Still, Tesla is up more than 80% in 2020 alone.
The Republican-controlled Senate voted to clear President Trump of all charges, as widely expected, in an impeachment battle that was fought almost entirely along party lines and finally ending months of the political game in Capitol Hill. Futures on the Dow and broader U.S. stock market launched to new records Wednesday evening after the acquittal.
With the Brexit, global economic uncertainty, the ongoing trade war with China, and the recent coronavirus contagion, investors have one less concern now with the conclusion of the impeachment proceedings. The real political risk is likely to begin emerging now as the Democratic primaries and caucuses get underway. One analyst notes that “the first of the results from the Iowa caucus put an outsider, Pete Buttigieg, and the popular liberal Bernie Sanders in the lead. Should candidates like Sanders continue to perform well, it would only be a matter of time before Wall Street turns more cautious at the prospect of a ‘radical’ presidential nominee for the Democratic Party.”
Credit Suisse CEO Tidjane Thiam resigned Thursday after acknowledging two spying scandals that “disturbed” the Swiss bank. Thomas Gottstein appointed new CEO. In 2019, Credit Suisse’s ex-chief operating officer, Pierre-Olivier Bouée was implicated in two separate spying operations, one involving the former head of wealth management Iqbal Khan. Khan had defected to crosstown rival UBS and Bouée reportedly feared that he might try to poach Credit Suisse employees and clients. The bank said he had ordered the surveillance to protect its interests.
Chinese markets tumbled on Monday, the first week of trading after WHO declared the virus a global emergency. Chinese stocks tumbled nearly 8% percent as the virus continued to spread, logging their biggest single-day fall since 2015. Financial markets reopened after the extended Lunar New Year break, all sectors closed lower, and the central bank injected US$ 174 billion of liquidity into the market.
The S&P 500 and Nasdaq set new all-time highs in New York trading as upbeat economic data continued to drown out fears of a global coronavirus epidemic. Reaction to the novel disease triggered a meltdown on Wall Street last Friday, with the majors recording their worst single-day drop since August.
*What were some of your biggest news of the week? Or what do you think will be the biggest news of the coming week? Even better, how do you think we can improve on our weekly briefs? Please let us know in the comments. *