Over the last two days, markets have exploded higher.
All thanks to great earnings, fading coronavirus fear, and a much better than expected jobs reports from the ADP, which showed the best monthly gain in five years.
In fact, according to CNBC, the jobs market added 291,000 private jobs. That was well above estimates for 150,000. Leisure and hospitality added 96,000 new jobs. Education and health added 70,000. Professional and business services tacked on 49,000. Construction added 47,000. Even manufacturing rose by another 10,000.
The Dow is up another 230 points. The S&P 500 is up 22.
But the NASDAQ just turned red. All thanks to a big, nasty drop in share of Tesla (TSLA).
Tesla Begins to Plummet
Just yesterday, shares of Tesla exploded to a high of $968.99.
But it may have run too high, too fast. “I just can’t believe this freaking stock. It’s insane,” Roth Capital analyst Craig Irwin said on CNBC. “This is a big separation from those of us who like to pull out the calculators and look at reality.”
All as analysts have raised price targets coupled with short-covering.
“I think this is largely the fear of missing out,” Irwin added.
“The number of large hedge funds calling in, the number of institutional investors calling in, saying ‘Where does it stop? What’s the catalyst?’”
He’s not the only one sounding the alarm.
“Not to sound like an ‘Ok, Boomer’ to the younger investors rushing into TSLA shares, but the recent price action brings to mind NASDAQ c. 1999,” Barclays auto analyst Brian Johnson said, as quoted by CNBC. “We continue to believe TSLA is fundamentally overvalued,” noted the analyst, who’s price forecast calls for a 65% plunge in the stock.
Worse, the stock is plummeting on news TSLA plans to delay Model 3 deliveries to China thanks to the coronavirus. “The proposed delivery (of cars) in early February will be delayed,” Tao Lin, vice president at Tesla, announced on Chinese microblogging service Weibo, according to a CNBC translation, in response to a question from a user. “We will catch up the production line once the outbreak situation gets better.”
With such disappointing news, the NASDAQ may spend most of the day in the red.
