One week away from the addition of Tesla into the S&P 500 Index and the stock continues to rise. It posted an all-time high price last week, has recovered from Wednesday’s loss and is back at a new high once again.
Tesla – Past Six Months
Investor sentiment continues to be driven by speculation that Congress is closer to an agreement on additional stimulus. The Fed met Wednesday and made no major changes to its bond buying program, committing to maintain its purchase levels until significant progress in the economy is achieved. Chairman Powell said the importance for fiscal stimulus is “very, very strong” as individuals and businesses continue suffering from the pandemic’s spread.
On the vaccine front, the first case of an allergic reaction was recorded demonstrating that the vaccine was just the first step in fighting the virus and not an absolute solution. Supply, transportation, and reach of the vaccine remain major challenges, yet it gives us hope as to the reactivation of the economy.
Another big mover this week was Bitcoin. Bitcoin surpassed $20,000 for the first time Wednesday, only to rise more than 13% on Thursday to over $23,000. Cryptocurrencies and blockchain technology are quickly gaining more acceptance in the financial services industry. The Chicago Mercantile Exchange (CME) offers Bitcoin futures aimed to provide exposure to investors that may not want to own the actual coin and manage the associated counterparty risks. This week the CME also announced futures on Ethereum to begin trading in early 2021.
Bitcoin – Past Six Months
Next week, I will be paying attention to the inclusion of Tesla in the S&P Index and how the stock trades. Investors’ attention will likely remain on the stimulus deal and the progress of vaccination across the population. In addition, investors must navigate the US equity markets at all-time highs as we approach the Holidays and what remains a challenging Winter.