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NY Open: Tesla losing its charge
Michael O’Neill
FX Trader, Loonieviews.net
Summary: Tesla’s battery may not be dead, but the 12.18% drop in its share price since yesterday’s $307.52 close screams that the firm needs a re-charge. USDCAD, meanwhile, is trading independently of sour Nafta talks.
Tesla’s (TSLA:xnas) battery may not be dead, but the 12.18% drop in its share price since yesterday’s $307.52 close screams that the firm needs a re-charge. Tesla’s woes started on September 27 when the Securities and Exchange Commission announced that CEO and Chairman Elon Musk was being charged with securities fraud.
The SEC alleges that on August 7, Mr Musk tweeted to his 22 million followers that he was taking Tesla private at $420.00/share and that funding had been secured.
It had not, which is why they levelled charges.
At the time of the Tweet, Tesla short sellers were getting a lot of press. They collectively lost about $1.3 billion after Musk’s tweet, according to a CNBC article. Today, CNBC reported that Elon Musk backed out of a settlement deal with the SEC because Musk claimed: “he would be failing to be true to himself.”
Canadian dollar traders appear to be thumbing their noses at President Trump and the state of the Nafta renegotiations which are acrimonious, to say the least. The Americans imposed a September 30 deadline for a revised agreement or, as President Trump threatened, Canada would get hit with 25% tariffs on cars imported into the US. That deadline is Sunday, and it appears that the odds for a deal are slim to none. The US Administrations intends to release a draft of the US/Mexico deal today.
That doesn’t mean the trade talks are over. They will continue because it is the best interests of both nations to secure a deal.
USDCAD reversed losses after President Trump’s tirade on Canada’s negotiating style and got an added boost from this morning’s better than expected Canada July GDP report. GDP rose 0.2%, overshadowing weaker than expected Industrial Product Price and Raw Material Price data (forecast 0.1%).
USDCAD is in an uptrend from February that comes into play in the 1.2900-10 area.
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