Fed Expects Unemployment Rate to Stay High: Live Updates
Wall Street believes it’s a great time to be a business of making electric vehicles.
Take Tesla. On Wednesday morning, the company’s share price rose above $1,000 for the first time ever, giving it a market value of about $185 billion. At that price, the company is second only to one other car manufacturer, Toyota, which is valued at about $215 billion. That’s despite the fact that Tesla produces and sells far fewer vehicles than Toyota and other major car companies.
Tesla’s many critics say the shares are overvalued. And even the company’s chief executive, Elon Musk, said last month that the stock price was “too high” at about $760 per share. But the stock has been soaring for months on the promise that the company will revolutionize the automotive industry.
Some recent good news has lifted Tesla’s share price even higher. The company’s California factory reopened last month after it had been closed for weeks under a local shutdown order intended to limit the spread of the coronavirus, allowing it to accelerate production of its anticipated sport utility vehicle, the Model Y. And sales of vehicles produced at Tesla’s Shanghai factory reportedly recovered in May.
“While the stock has been roaring higher, we believe the main fundamental catalyst continues to be the massive China market which is showing clear signs of a spike in demand,” Daniel Ives, managing director of equity research at Wedbush Securities, said in a note on Tuesday.
On Wednesday, Mr. Musk told staff in a memo that it was also time for the company to ramp up production of the Tesla Semi commercial truck, according to Reuters. That might be in response to Nikola, an Arizona-based electric truck start-up whose stock has rocketed since it went public last week.
After an initial rush, $130 billion is still sitting in the small-business relief fund.
About $130 billion is sitting in the federal government’s Paycheck Protection Program, waiting to be tapped by small businesses hurt by the pandemic.
When it was opened in April with $349 billion, the paycheck program ran out of money in less than two weeks, prompting Congress to swiftly approve additional funding of $310 billion. The outflow of money has been slower since. Many small businesses are wary of borrowing, mainly because they find the program’s rules confusing and limiting.
Article source: https://www.nytimes.com/2020/06/10/business/stock-market-today-coronavirus.html