Stocks Pump and Bump and Slump on Fed Statement
In another bearish sign of a possible trend change, the major indexes pumped on initial news of the Federal Reserve’s statement on interest rates, but then promptly sold off, ending the day at lows. Futures are flat, and traders are getting more worried. Among them is Guggenheim Partners’ Scott Minerd, who appeared on CNN yesterday saying that this is the rally to sell. The Dow Jones and S&P 500 (NYSEARCA:SPY) ended up down 0.72% on the day, with tech (NASDAQ:QQQ) slightly outperforming, down only 0.42%. The Fed has hinted at another rate hike in June, and it is unclear how many more rate hikes equities can take.
Musk’s Meandering Matters More
Elon Musk is back in the news again for not answering a question nicely on Tesla’s (NASDAQ:TSLA) latest earnings call about Model 3 owners adding options to their vehicles. Musk didn’t like the question because he thought it was dry, and that they were “killing [him].” Tesla stock then sold off when the fact that Musk thought that the question was killing him, was killing Tesla traders. Reports today indicate Musk has not been killed, though a shareholder has challenged his positions as company Board Chairman. Musk also didn’t like questions about a possible capital raise, insisting that Tesla will pull a profit by the end of the year and a further raise will not be necessary. Maybe that target will be reached this time.
Trump Maybe Will or Won’t Definitely Maybe Pull Out of Iran Nuke Deal Possibly
The signals out of the White House regarding the future of the Iran Nuclear Deal are clear and direct in their indication that officials have no idea what President Trump will do. This is making oil (NYSEARCA:USO) jumpy and unsure of its direction. Reintroducing sanctions on Iran could cut off the supply of Iranian oil from global markets, exacerbating a sharp rise in the price of oil that is also helping push up inflation indexes. According to Reuters, “One of the White House officials who spoke on condition of anonymity said it was possible Trump will end up with a decision that ‘is not a full pullout’ but was unable to describe what that might look like.”
Daimler Now Serious About Boycotting Congolese Child Labor
Daimler (OTCMKTS:DDAIF), the parent company of Mercedes, is now apparently more serious about boycotting all child labor and not buying any cobalt mined by children in the Congo. Usually boycotts are intended to hurt the target of said boycott, which in this case would be children who probably need the work in order to support their families, though in this case it is widely agreed that they help. CNN conducted an investigation tracking down some of Daimler’s cobalt supply to artisanal mines in the Congo. Daimler says it intends to buy all its cobalt directly from miners so as not to accidentally buy from a middleman who sources its cobalt from one of these artisanal mines. The children would then be free to be children instead of work, so the narrative goes.