Risk-off & Tesla’s Battery Day

For the day ahead, I’ll be watching investor reaction to yesterday’s big risk-off day across markets, Tesla’s so-called ‘Battery day’ and the testimony from Fed Chair Jay Powell.

Yesterday was a classic risk-off moment where the stocks and crypto slumped, while Treasuries, the US dollar and the yen all rallied. Tech stocks have been pulling back for a couple of weeks but yesterday the sell-off was broader with industrials in the Dow hit hard. The price of silver was down 10% at one point on Monday.

There didn’t seem to be one specific trigger baring perhaps the leaked FinCEN report and its effect on European bank stocks. Some also argued the sad passing of Justice Ruth Bader Ginsburg and the partisan squabbling over her replacement in the Supreme court has made a new US stimulus bill even less likely. If the decline is just sentiment driven, then it makes the chance of a snap back the next day higher- though its worth noting some key technical levels including the 50 DMA in the S&P 500 have given way- favouring more downside.

So Tesla’s battery day is part PR stunt part something substantial for the future of EVs. Every new generation of Tesla’s batteries should be able to hold store more energy and have a longer life- thus improve electric vehicle range and cost to something the masses will be comfortable adopting.

Powell testifies for one out of three occasions this week on Tuesday before the House Financial Services Committee on the CARES act - i.e. the first stimulus bill.

For those in the UK, Prime Minister Boris Johnson is expected to announce further lockdown restrictions in a statement to the House of Commons around mid-day. In Switzerland no such new measures are planned yet while the so-far successful test and trace program is still functioning.


Right, thanks for tuning in, good luck trading today and make sure to subscribe to the MorningFlow newsletter to get these videos delivered to you every day.



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