Your Monday Blip 9/21/20

Your Monday Blip 9/21/20

It was an ugly start to the week as the Dow finished off 509 points to 27,147. Trading volume was lower across the board. The selloff was due to concerns over a rise in virus infections hitting global economic growth estimates, gridlock in Congress over new stimulus measures and the debate arising from the sudden vacancy on the Supreme Court with the passing of the honorable RBG. All these things serve to push up uncertainty and volatility. IBD noted that today’s trading action undercut support and could tip the market indicator to show correction. The good folks at BTS have also started to lighten market exposure and are building cash and treasury positions. Their thinking is to wait for the economy to confirm more signs of improvement before further market investment is warranted.
The emerging electric vehicle industry often resembles the wild west as evidenced in today’s market action. Shares of Nikola, the electric truck maker which recently signed a $2 billion deal with General Motors were whacked after 39 year old founder Trevor “Alarm Bell” Milton resigned as executive chairman following SEC investigations and allegations of fraud by a firm called Hindenburg Research. Hindenburg accused the company of misrepresenting facts and embellishing the capabilities of its trucks. We will see how this all plays out and GM said it is standing by Nikola and believes in what they are doing. Meanwhile shares of Tesla were volatile ahead of tomorrow’s battery day event. Comments by 49 year old Elon “Megalomaniac” Musk stating that this quarter could set production records helped the stock trade higher in what was a wild session.
It appears that Oracle and Walmart have reached a deal with China based ByteDance to take a minority stake in TikTok and host its video-sharing app. The deal apparently has the blessing of the White House and is expected to create jobs in the US and protect the privacy of users.