Tesla shares have fallen 28% since Elon Musk took over Twitter (3 min read)
Tesla stocks lost 28% since Elon Musk acquired Twitter while automakers like Ford, GM, and Volkswagen were up in the positives during the same time period. Despite the better than expected inflation report that drove tech stocks higher on Tuesday, Tesla stocks slid another 4% and reached a new record low in years. Elon selling Tesla shares to finance the Twitter deal and delays in vehicle production have all contributed to the pressure in Tesla stocks this year. Investor sentiment has also weakened as many see Twitter distracting Elon from leading Tesla.
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Rivian pauses plans to make electric vans in Europe with Mercedes-Benz (2 min read)
Rivian will no longer pursue the agreement with Mercedes-Benz to manufacture electric commercial vans in Europe. The change of plan was because Rivian believes focusing on their own consumer business will yield better near term value for the company. The news also came at a time when the European Union raised concerns about the Inflation reduction Act (IRA) from the US. The IRA contains a tax credit for EV assembled in North America which could be a big challenge to European carmakers in the coming years.
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Consumer prices rose less than expected in November (4 min read)
The latest consumer price index (CPI) report showed that inflation increased only 0.1% in November from the previous month and 7.1% from a year ago, lower than the estimates from economists. The core CPI that excludes food and energy also increased less than expected, 0.2% on the month and 6% on an annual basis. US stocks rallied following the report as the data further supports that inflation began to cool and is heading in the right direction.
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OPEC sees robust global oil demand growth in 2023 after Chinese contraction (3 min read)
China’s Covid lockdowns this year have led to the country’s first annual contraction in oil demand since 2002, which has also significantly impacted the growth in global demand. However, as China began to relax their zero-Covid policy, OPEC said it expects the world oil demand to start regaining growth again in 2023. OPEC believes that the return in oil demand from China may counterbalance some of the upcoming global economic challenges.
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Buffer ETFs Are Turning Into An Extraordinarily Good Deal (5 min read)
Buffer ETFs are an effective strategy to help take some of the guesswork out of investing. It provides downside protection up to a level in exchange for a cap on the upside if you hold it for the entire outcome period of one year. Innovator’s December Buffer ETF just reset to a new cap of 18.37% with a 15% protection. The January Buffer ETF is expected to reset at a similar or higher cap which makes it attractive as the market enters extreme uncertainty in 2023. More details are available in the article.
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Spotlight: Insurance ETF Beats Market as Rates Jump (3 min read)
Insurance ETFs are one of the few categories outside of energy that have outperformed the S&P 500 this year. The iShares U.S. Insurance ETF (IAK), for example, was up 12% and recently reached an all-time high while SPY was down about 16%. Insurance companies are mostly unaffected by the economic downturns because of the essential services it provides. Higher rates have also boosted the premiums it collects, leading to positive returns in 2022.
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That's it for today! You can reply to this email if you have any comments or feedback.
Thanks,
Thomas
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