Tesla’s Insufficient 28% Boost

“Here’s my gift-giving rule: Respect your current financial situation.” ~ Suze Orman

Dear Trader,

Welcome to today’s edition of Wall Street Connected.

This morning marked the debut of Tesla (TSLA) opening as an S&P 500 component. Tesla was given a 28% boost in price-per-share target by Wedbush Financial prior to today’s opening bell ringing, but this upgrade actually sent the stock down 4.1% in a matter of minutes.

While a 28% increase in price-per-share target by a major financial institution is typically a bullish catalyst for stocks, a mere 28% increase in price-per-share target fell short of Wall Street’s analyst consensus of a 43% increase in price-per-share target as Tesla entered its debut as an S&P 500 component. 

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While Wall Street’s analysts have since stated they remain bullish on Tesla as they believe there is a ‘major increase in electric vehicles’ around the world, competition in the electric vehicle space has also increased dramatically in 2020, leaving Tesla less likely to create a potential monopoly in the electric vehicle space.

Due to what has turned out to be a “buy the rumor, sell the news” scenario for Tesla on its S&P 500 debut, Tesla opened about 6% lower this morning, while the S&P 500 opened about 1.5% lower. 

With Tesla having closed at a new all-time-high of $695/share on Friday, it may not come as a surprise that Tesla (TSLA) is ranking #1 on top searched stocks by financial professionals last week…

TrackStarIQ Data

Here are some highlights from FA searches last week:

RANK	TOP SEARCHES BY FAs (Total Traffic) Previous Week [STOCKS]	TOP SEARCHES BY FAs w/ AUM>$1B (Total Traffic) Previous Week [STOCKS]	TOP INDUSTRY SEARCHES BY FAs (Total Traffic) Previous Week [EQUITIES]	TOP INDUSTRY SEARCHES BY FAs w/ AUM>$1B (Total Traffic) Previous Week [EQUITIES]
1	TSLA	WFC	Biotechnology	Banks – Diversified
2	NIO	IWSY	Auto Manufacturers	Prepackaged software
3	AAPL	BABA	Drug Manufacturers – Specialty & Generic	Internet Retail
4	TLRY	AMD	Software – Application	Semiconductors
5	NNDM	LCA	Conglomerates	Conglomerates
6	AMZN	LMND	Software – Infrastructure	Conglomerates
7	PFE	PFE	Internet Retail	Drug Manufacturers – General
8	MRNA	WSM	Internet Content & Information	Specialty Retail
9	ATVK	PLX	Semiconductors	Biotechnology
10	SPCE	AAPL	Diagnostics & Research	Consumer Electronics
11	LCA	HD	Drug Manufacturers – General	Home Improvement Retail
12	TSNP	BCDA	Oil & Gas E&P	Biotechnology
13	SNDL	ABML	Entertainment	Metal Mining
14	GNUS	OSTK	Consumer Electronics	Internet Retail
15	DKNG	BCLI	Specialty Retail	Biotechnology
16	SRNE	FUBO	Credit Services	Motion picture and video production
17	MVIS	GBTC	Aerospace & Defense	Trusts, misc
18	BCDA	TSNP	Medical Devices	Floor laying and floor work, misc
19	NEWS	SOL	Communication Equipment	Solar
20	ALPP	QEPC	Electrical Equipment & Parts	Cutlery, Handtools & General Hardware

The Ipath.B S&P 500 VIX Short-Term Futures ETN (VXX), which tracks volatility, traded about 12% higher this morning as a result of increasing COVID-19 concerns.

When volatility trades higher, indices such as the S&P 500 typically trade lower as a result, which was the case this morning. While this morning’s slide on Wall Street may be concerning to some readers, in the eyes of experienced traders and investors, it can be viewed as a buying opportunity, especially for Emerging Markets.

With a democratic administration about to take office, many traders and ESG investors are expecting Emerging Markets to outperform U.S. markets, and using any dip they can to buy positions in Emerging Market opportunities.

You can explore those opportunities by clicking here. 

What We’re Reading:

1. 2020 has taught many traders and investors that preparation is key in order to be successful. Ahead of Monday’s opening bell, many experienced traders and investors enjoy studying the top stock story developments which have taken place over the weekend. Here’s the past weekend’s top stock stories.
2. With global urgency for a COVID vaccine continuing to increase on a daily basis, one company was recently granted authorization to distribute emergency doses of its vaccine. It’s one of the few stocks which opened green today. Here’s the stock…
3. Despite the S&P 500 opening about 1% lower this morning, some analysts are ‘as bullish as bullish’ gets on the S&P 500 right now. Full story…

What We’re Watching:

Traders and investors hear about growth and value stocks on a frequent basis, but what about defensive and cyclical stocks?

One could say these go overlooked…

Fortunately, Markets & Minds wants to bring you up to speed.

Here’s the video.

What We’re Liking (Sponsored):

• What Big Mistakes Do People Make With $1 Million?
• 7 Retirement Income Strategies Once Your Portfolio Reaches $500k
• Where Will Stocks Go in 2021?

-InvestingChannel