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Market Round Up: Rocket man Private Tesla, Americans not in the mood, Sustainable sustainability

by | 8 Aug, 2018

 

1. Rocket man Private Tesla

Tesla shares were suspended last night as Elon Musk stated he would probably take his company private. As a result, pre-suspension, punters took to the parade ground like a shot, helping push the stock price by 11% after trading resumed a few hours later.

As always, Musk made the announcement via Twitter, announcing he had found the funds to help him buy out investors. But was this just a moody, flippant remark by the renown tetchy Musk or a serious warning that he’s fed up with the quarterly earnings cycle of listed companies and the fact that they never reflect the prospects of a company looking at the long game? Time will tell.

Meanwhile, his vague utterances mean it’s a field day for investors and a last chance saloon to short the company against the often reactive statements he broadcasts.

 

2. Americans not in the mood

That’s spending, as consumer credit data released on Tuesday fell from $24.259 billion in May to $10.211 billion in June, missing expectations of $15 billion.

While monthly consumer credit numbers appear to be relatively volatile, the June figures suggests that consumers have become increasingly wary of taking on too much debt amid moderate wage gains and rising interest rates.

To add salt to the wound, a study by the Atlanta Fed suggests that nearly a fifth of US businesses have reviewed their capital spending plans as a result of the China U.S. trade war. Whilst this reduced capital spending will not be immediately visible, it could eventually cripple momentum in the productive sector in particular. This unintended fallout that that trade wars might have for the US economy remains a major risk to the growth outlook and could ultimately be the catalyst that forces the Fed to reconsider its pace of policy tightening.

For the time being, though, the Fed is bullish on the growth outlook and a hike next month seems highly likely.

Related: BoE Governor Mark Carney warns of Fintech disruption to traditional banking

 

 

3. Is sustainability sustainable?

A company’s worth is no longer just based on how much money it can make, but also on its social and environmental impact on the world. As global warming, pollution, human exploitation and other factors become more of the norm, the view is that corporate sustainability will become and ever-more significant factor in an investor’s decision.

It is also important to note that corporate sustainability isn’t restricted to green hippy-run companies. The majority of bluechip companies take their responsibility to humanity and mother earth just as seriously – if not cynically to keep their customers on board. So, if for instance you take a look at Forbes annual ranking of the top socially responsible and sustainable companies, you may be surprised to see a lot of the major oil and auto companies there (you can of course just look at the ‘sustainables’ listed in Invstr’s watchlist search feature!).

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ALL RIGHTS RESERVED © INVSTR LTD. 2018

Risk Disclosure:
Invstr is a technology platform, not a registered broker-dealer or investment adviser. Invstr does not offer its own recommendations of any security or provide its own research to any user regarding any security transaction or order.
Please note, investing involves risk and investments may lose value. Past performance does not guarantee future results.
Brokerage services are provided by the following:
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ALL RIGHTS RESERVED © INVSTR LTD. 2018

Risk Disclosure:
Invstr is a technology platform, not a registered broker-dealer or investment adviser. Invstr does not offer its own recommendations of any security or provide its own research to any user regarding any security transaction or order.
Please note, investing involves risk and investments may lose value. Past performance does not guarantee future results.
Brokerage services are provided by the following:
US-traded securities, including fractional trading, are provided to Invstr users by DriveWealth LLC, a regulated member of FINRA/SIPC. DriveWealth may not establish investment accounts to residents of certain jurisdictions. For more information, including disclaimers, risk and transaction fees click here.
India account traded securities are provided by SIC Stocks & Services PVT Ltd. SIC does not make any personal recommendations to buy, sell or otherwise deal in investments. Investors make their own investment decisions. The services and securities provided by SIC may not be suitable for all customers and, if you have any doubts, you should seek advice from an independent financial adviser. For more information and disclaimers, click here.

 

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