Tesla in kings, US data and local lockdowns
On December 21 Tesla wil be included in the SP500 index. The decision is rather strange, but, apparently, deliberate (in September, the index committee had already refused to include the company in the index, but now they have decided to do this).
It's strange because it creates purely technical difficulties for the index committee - Tesla, with its capitalization near $ 400 billion, creating an imbalance in the index. It's strange because now index funds and ETF funds (with total assets up to $ 11 trillion) will have to buy Tesla shares even if they really don't want to do it. It's strange because Tesla is a classic price bubble that is about to burst and what will happen to the entire index because of this we don't even want to think about (nothing good for sure). In general, it is not clear why SP did this, but they did.
Meanwhile, the head of the investment company Hercules Investments, James MacDonald, said he expects the S&P 500 to decline by 20% in the near term. In principle, just the collapse of the Tesla bubble may be enough for this.
Yesterday's data on retail sales in the United States was not very encouraging. They rose 0.3% in October (after rising 1.6% in September). It is obvious that the situation will deteriorate further. Since the executive branch in the United States is partially paralyzed due to the results of the elections in the United States (Biden cannot do anything yet, and Trump no longer wants to), one cannot count on a nationwide lockdown. But local authorities are increasingly tightening measures in a desperate attempt to stem the rise in the number of cases.
Against the backdrop of such news, the optimism caused by the news from Moderna has somewhat faded. Accordingly, the growth of stock markets stopped, as well as oil prices growth. But it is too early to talk about any kind of reversal. However, we note that the fundamental background for this is more than favorable.
US Oil stocks according to API increased by 4+ mln barrels. This is not something gamechanging. But still, additional reason to sell Oil from the current prices.
It's strange because it creates purely technical difficulties for the index committee - Tesla, with its capitalization near $ 400 billion, creating an imbalance in the index. It's strange because now index funds and ETF funds (with total assets up to $ 11 trillion) will have to buy Tesla shares even if they really don't want to do it. It's strange because Tesla is a classic price bubble that is about to burst and what will happen to the entire index because of this we don't even want to think about (nothing good for sure). In general, it is not clear why SP did this, but they did.
Meanwhile, the head of the investment company Hercules Investments, James MacDonald, said he expects the S&P 500 to decline by 20% in the near term. In principle, just the collapse of the Tesla bubble may be enough for this.
Yesterday's data on retail sales in the United States was not very encouraging. They rose 0.3% in October (after rising 1.6% in September). It is obvious that the situation will deteriorate further. Since the executive branch in the United States is partially paralyzed due to the results of the elections in the United States (Biden cannot do anything yet, and Trump no longer wants to), one cannot count on a nationwide lockdown. But local authorities are increasingly tightening measures in a desperate attempt to stem the rise in the number of cases.
Against the backdrop of such news, the optimism caused by the news from Moderna has somewhat faded. Accordingly, the growth of stock markets stopped, as well as oil prices growth. But it is too early to talk about any kind of reversal. However, we note that the fundamental background for this is more than favorable.
US Oil stocks according to API increased by 4+ mln barrels. This is not something gamechanging. But still, additional reason to sell Oil from the current prices.
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