[Market Madness] Edition 0082
Friday Fun
An end to an interesting week
Well folks, Gilead comes to the rescue with some positive trial news. Overnight, the futures were mixed, mainly down. This morning, the biotech company swooped in with positive test results from their latest COVID 19 vaccine trial. This gave the markets a lift between the Dow Jones and the S&P 500. The NASDAQ was down in early trading, as we’ve seen tech move somewhat counter to positive recovery news. By midday, the markets all turned green and by the close,
Elsewhere, the major indices overseas flipped, this time with Europe up and Asia down. Crude is back over $40 per barrel, gold is down and volatility is also down. As it related to COVID 19, the U.S. continues to set daily records of new cases and we are seeing daily new cases globally over 200,000 for the past days. Investors continue to sway between fearsome and greedy, factoring in new COVID 19 data as well as general economic data, moving the markets up some days and down on others.
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Fundamentals
Friday Close:
Dow Jones Industrial Avg: +1.44%
S&P 500: +1.05%
NASDAQ: +0.66%
US 10 YR: 0.637%
Crude OIL: $40.53
Market Madness Portfolio: +0.62%
COVID 19 Global Cases: 12,376,147
Indices Overseas:
FTSE 100: +0.80%
Nikkei 225: -1.06%
Hang Seng: -1.84%
TEDRATE: 0.16
LIBOR (3 month): 0.26625%
Rivian enters the rivalry
A lesser-known startup, Rivian Automotive LLC, has secured $2.5 billion in a round of funding, led by T. Rowe Price. Other big investors in the startup are Ford, Amazon, and BlackRock. The company, most known for their electric-truck program, seeks to enter the gauntlet against Tesla and Ford who are both battling to bring the first all-electric truck to the market.
“The new funding round illustrates that the auto industry’s push to electric vehicles is still generating interest from investors, even as the economic fallout of the Covid-19 pandemic has dented buyer demand for vehicles and forced many auto makers to draw down on their credit lines to shore up cash.” (excerpted from article)
Amazon has made a big bet on this firm, ordering 10,000 SUV models from Rivian which are expected to be delivered in 2022, as a way to expand their delivery fleet and do so in an eco-friendly way.
This market is definitely heating up, as the more traditional car manufacturers are trying to keep up in the disruptive environment that Tesla has engineered within the automobile industry. As we saw with Tesla, an all-electric vehicle is not an easy production task. Fans and investors betting on Tesla from the beginning have demonstrated incredible patience waiting for the firm to deliver on what they had promised. As they have refined their craft, their vehicles have become more efficient and more affordable to the average middle-class family.
The decreased price point for the car, in addition to the cost-savings incentives provided through government grants and tie-ins with home solar programs have developed into the beginnings of a more connected solar-based ecosystem; a play that many are hoping is a change in reliance on fossil fuels toward more friendly options.
Rivan is a really interesting company, all things being considered. To have secured this second round of funding at $2.5 billion for what at the moment seems like a calculated bet says quite a lot. Regardless, Tesla presents itself both company, and fans alike, a formidable foe to anyone looking to take them head-on in the all-electric space. Their stock is also red hot lately, soaring well past its old 52-week high and into the stratosphere (just like their rocket). Analysts continue to debate whether the price action is backed by strong company fundamentals and forward looking projections or is a heavy dose of speculation. Either way, with Rivian’s entrance, the all-electric vehicle space is going to be interesting to watch in the next 18-24 months.
Quick Takes
Dr. Scott Gottlieb estimates 1 in 150 could be infected with COVID 19 in the U.S. (via CNBC)
Hand pump hardships. (via WSJ)
Seoul, South Korea, mayor found dead yesterday. (via WSJ)
Auto manufacturer Rivian enters race to first electric truck next year. (via CNBC)
Local surges have forced Hong Kong to close schools and tighten social distancing requirements. (via FT)
Gilead reports positive news on COVID 19 trial vaccine. (via CNBC)
Amazon directs employees to delete TikTok app over security concerns. (via CNBC)
Reader’s Corner
The reader is out of the office today, and left a note that they’ll be back on Monday.
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