Market Morning: Musk Nukes Tesla Shorts, Negatively Priced Power, Samsung All In on AI

Stock Market Roundup

Musk Pulls Nuclear Option on Tesla Shorts

Story continues below

In quite a clever move that amounts to a surprise squeeze on Tesla (NASDAQ:TSLA) shorts, the notorious and constantly-in-the-news for one thing or another Tesla CEO Elon Musk proposed taking Tesla private yesterday, which rocketed shares higher 11%. The deal he proposed and says that he has somehow secured the funding for would be a total $72 billion at $420 a share. Shares closed just below $380, indicating that investors sort of take Musk at his word, but sort of don’t. Nobody seems to know how Musk will come up for the money for this one, but it sure takes investors’ minds off of Tesla’s Model 3 production drama. Or this is just a way to juice the stock higher before a much-needed equity financing given the fact that Tesla is mired in debt and is still cash flow negative.

SEE: Macrogen To Use Blockchain In Its DNA Genetic Sequencing Service

More Tariffs Set to Take Effect August 23 as China Trade Surplus Stays Near Record Highs

China’s trade surplus with the US remained above $28 billion last month, very close to record highs, while tariffs on $16 billion more in Chinese good are set to take effect in two weeks. New tariffs will be focused in on semiconductors (NASDAQ:SOXX) in China, which contain chips that are made in the United States, which effectively means that the Trump Administration will be protecting America from importing its own stuff to its own borders, for the sake of national security. Chinese stocks (NYSEARCA:FXI) meanwhile had a bit of a relief rally yesterday, up over 2% but are still within a tight trading range following June’s precipitous drop.

Electricity Prices Fall Below Zero As Wind and Solar Farms Compete With Coal Plants

Negative interest rates, meet negative prices for electric power. Traditional energy companies like NRG Energy (NYSE:NRG) are having problems competing with clean energy alternatives because the energy they produce has priority on the grid, bringing electricity prices down below zero in many jurisdictions during certain hours of the day, in the US and internationally. Faring the worst is Germany, which has had 194 hours of negatively priced electricity since the beginning of 2018. US leaders for negatively priced electricity are California, New England, and Texas. Tasmania leads Africa with 59. This forces traditional power plants to shut down production during subzero pricing hours or lose money, and many power plants are not designed to shut down quickly.

CVS Aetna Deal Likely to Go Through

The Aetna (NYSE:AET) CVS (NYSE:CVS) deal is looking increasingly like it won’t be challenged by the Justice Department because the two companies specialize in different parts of the health care supply chain. Aetna being an insurer and CVS a retail pharmacy. The merger would give CVS about a 33% market share in the Medicare Part D market, passed by President George W. Bush in the early 2000’s. CVS would benefit from the merger because it would draw Aetna customers into its stores to fill their prescriptions.

Samsung To Invest $22 billion in AI and Autonomous Driving Car Parts

Samsung Vice Chairman Lee Jae-yong was released from prison after being convicted on charges of bribery, he’s back at the company’s leadership, and he’s wasted no time moving forward. The company now plans to invest $22 billion in new technologies for the future 5G network including AI and components for self-driving cars. The South Korean company and Apple (NASDAQ:AAPL) competitor does not want to fall behind the next generation in network technology, which will probably include AI features. Some of the money will also go to Samsung’s biopharmaceutical contract manufacturing segment as well.

An ad to help with our costs