Market Round Up: Subsidies Unplugged 🔌 Altria Jumps On The Weed Train 🍁
1. Subsidies Unplugged
Electric car enthusiasts better start opening their wallets because the Trump administration is looking to end subsidies for electric cars and other renewable energy sources – yikes.
Currently, consumers receive between $2,500-$7,500 in tax credit for purchasing plug-in vehicles under federal law to promote the use of low-emissions vehicles….but not for long, maybe.
Tesla and GM have been in an uphill battle against the Republican-led House of Representatives to get further incentives, but recent GM plant closures have pushed President Trump to remove subsidies entirely in retaliation.
President Trump voiced his anger on Twitter over GM’s closure of 5 North American plants that would cost as much as 15,000 jobs as GM shifts its strategic focus to electric vehicles. The removal of subsidies during an important transition for GM would likely cause significant setbacks for the automaker, but also for consumers.
This would put upward pressure on prices in the electric car market at a time when higher interest rates are already squeezing consumers’ bottom line. This may make the already-expensive electric vehicles beyond the reach of ordinary people, and put the industry in an extremely difficult position.
Let’s hope January’s newly Democratic House of Representatives can intervene before it’s too late!
2. Altria Jumps On The Weed Train
US tobacco company, Altria, announced its intentions to get into the marijuana business through a potential partnership with Canadian firm, Cronos. The news sent Cronos’ stock price skyrocketing almost 30% yesterday, but is this strategic move enough to save Altria?
Having lost almost 20% of its value this year, the pressure is on Altria to diversify into faster-growing industries as consumers move away from traditional smoking methods.
E-cigarettes and the legalisation of marijuana, have changed the tobacco industry dramatically, forcing tobacco producers to adapt or wither and die.
Altria have finally decided to hop on the bandwagon by looking to invest in both areas with Juul and Cronos becoming part of their strategy to harness the surging smoking alternatives market and slow their decline.
The cannabis market still remains relatively untapped with a great deal of potential if more states look to legalise its recreational and healthcare-related applications. Although these are just talks for now, more good news in the sector could send cannabis stocks back to their September-October highs.
So, if you haven’t already, perhaps you should consider getting on the weed train!
Today we are watching…
1. Boeing (#boeing)
Boeing took off yesterday, rising 3.81% for the day to continue a strong bull-run. The share has been in a steep uptrend since the start of the month, erasing the losses from the early-November sell-off. Buyers will look to keep pushing prices higher, but beware of a short-term consolidation period at these higher levels.
2. Advanced Micro Devices (#amd)
US micro-chip producer, AMD, jumped a whopping 11.31% off the back of positive trade talks at the G20 summit. Chip-makers were the worst hit by the October selling spree, but were some of the biggest risers yesterday. Having lost a lot of ground from its peak in September, investors may look to pile back into AMD at these lower prices.