Quick turn-around for markets | Calamatta Cuschieri

US markets open low but quickly rebound, US-China near a trade war & Tesla shoots upwards

Shares in electric car firm Tesla have risen after it announced a boost in production
Shares in electric car firm Tesla have risen after it announced a boost in production

US markets plunged sharply at Wednesday’s open before rebounding back into positive territory later on into the session. Apple helped lead the comeback in the market, as the tech company rose 1 percent to erase its losses.

Chips stocks also rebounded, with Micron and Advanced Micro Devices both climbing more than 1 percent. The S&P 500 index was trading in positive territory at 2,615, after also opening sharply lower, while the Nasdaq Composite Index was up 0.3%, also erasing a sharp initial plunge.

European stocks closed lower however off from the session’s lows after China hit back against U.S. tariffs on its products. Beijing issued a list of 106 U.S. goods that will be subject to levies by the world’s second-largest economy. The Stoxx Europe 600 index slumped by 0.5% to end at 367.33 with Germany’s DAX 30 falling 0.4% to close at 11,957.90. London’s FTSE 100 index edged up less than 0.1% to finish at 7,034.01.

US-China trade war

China announced that it would levy an additional 25 percent on around $50 billion of U.S. imports including soybeans, automobiles, chemicals and aircraft on Wednesday, matching the scale of proposed U.S. tariffs issued the previous day. Beijing’s proposed targets strike at the core of commercial relations between the two countries, and at some of the most politically sensitive goods in core Trump constituencies.

President Donald Trump pushed back against an escalation with the Asian superpower however, saying on Twitter Wednesday morning that “we are not in a trade war with China, that war was lost many years ago by the foolish, or incompetent, people who represented the U.S”, providing some relief to worried investors. China’s Deputy Finance Minister Zhu Guangyao told reporters that the implementation date of China’s retaliatory tariffs depends on the outcome of bilateral negotiations, and the U.S. decisions. “We believe both countries have the ability and wisdom to address the problem,” Zhu said.

Tesla shares jump

Shares in electric car firm Tesla have risen after it announced a boost in production of its cheaper Model 3 cars in the first quarter after it built 34,494 vehicles, 9,766 of which were Model 3s. The firm said it had "by far the most productive quarter in Tesla history" The firm said it had doubled its weekly Model 3 production rate in the third quarter. In the last week, it said, it had produced 2,020 of the vehicles. It’s profitability is reliant on increasing its Model 3 production.

Shares of the California-based company, which have fallen about a fifth in value in the past week amid speculation over its finances and a fatal US car crash, were nearly 3% higher in midday US trading. Tesla says it has about 500,000 advance reservations from customers for the vehicle. The production numbers, short of Tesla's own target of 2,500 per week for the end of March, are far higher than the quantity of 793 Model 3s built in the final week of last year.


This article was issued by Peter Petrov, Junior Trader at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article is being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.