The news cycle over the past few weeks has been dominated by one thing only, and I’m sure you don’t need three guesses. Ok, I’ll tell you:
It’s Baby Yoda!
What was expected to provide a massive windfall for toymaker Hasbro (NASDAQ: HAS) has seen production delayed indefinitely due to a manufacturing slowdown in China. Millions have been affected, and the stock market is reacting wildly, resulting in its worst day since the 2008 crash on Monday. Luckily, some order was restored yesterday as the major indexes all jumped, including the S&P 500 (NYSEARCA: VOO).
Oh, and I guess the coronavirus has played some small part in the wider sell-off too.
In any case, the market has been a whirlpool of despair and confusion as of late, and despite the current mindset of many, the world will keep on spinning. We were reminded of this yesterday by Tesla (NASDAQ: TSLA) CEO Elon Musk, who made a couple of big announcements that, unlike his other venture and Virgin Galactic (NYSE: SPCE) rival, SpaceX, brought us all back down to earth.
Amidst the chaos, Tesla is expanding
Elon Musk received a lot of criticism last week for calling panic over the coronavirus ‘dumb’, but it appears that he is still not too concerned with its effects, announcing on Tuesday that the company would be seeking to build a Cybertruck Gigafactory in the U.S.
Scouting locations for Cybertruck Gigafactory. Will be central USA.— Elon Musk (@elonmusk) March 11, 2020
The company also celebrated its one-millionth electric vehicle, amid much fanfare and celebration among the wider Tesla team. The timing of these announcements could be construed by the more cynical among us as ‘suspect’, especially considering Tesla’s stock price dropped more than 13% on Monday amid a wider market sell-off. After a 3-month run that saw shares in Tesla almost triple, nearly hitting the $1,000 per share mark in January, Tesla is down more than 20% in the past month.
Likewise, U.S. rivals Ford (NYSE: F) and General Motors (NYSE: GM) have already begun to construct Cybertruck rivals, while Chinese competitor NIO (NYSE: NIO) is still beating market expectations despite the coronavirus outbreak.
Regardless of Musk’s intention, it is definitely nice to see a silver lining among all the gray clouds that have pervaded the stock market lately. It proves that despite major disruptions to many facets of our lives, Tesla — and other businesses — are still operating as normal, albeit with the possibility of workers operating from their homes.
Other companies are on the rise
We’ve extensively covered ‘stay-at-home’ stocks which could boom as people self-isolate, such as Netflix (NASDAQ: NFLX) and Facebook (NASDAQ: FB). We’ve also discussed stocks that could be immune to the coronavirus, such as Teladoc (NYSE: TDOC) and Slack (NYSE: WORK). The performance of these stocks is directly related to the spread of the coronavirus in some way, but other stocks also rose on Tuesday that have no correlation.
Mercado Libre (NASDAQ: MELI), the Argentine e-commerce answer to Amazon (NASDAQ: AMZN), saw its stock jump more than 10% as it recovered from a market-driven crash on Monday. Elsewhere, Planet Fitness (NASDAQ: PLNT) was a big winner, jumping nearly 11%. Perhaps investors read our Planet Fitness case study?
That is not to say that things are suddenly better, far from it. Many stocks are still suffering from wider sell-offs, most notably personalized fashion company, Stitch Fix (NASDAQ: SFIX), which fell more than 25% on Tuesday.
We’re in for a bumpy ride
We are beginning to adopt a ‘day-by-day’ policy here at MyWallSt, as there is no telling really what will happen in relation to the coronavirus, which is likely to get worse before it gets better. At times like these, it can be hard to know what to do with investing; do you buy, sell, or do nothing? There is no right or wrong answer at the moment, but Elon Musk is reminding us that until the day it stops spinning, the earth will go on, and we should too.
MyWallSt operates a full disclosure policy. MyWallSt staff currently hold long positions in Tesla, Netflix, Teladoc, Slack, Mercado Libre and Virgin Galactic. Read our full disclosure policy here.
Editor at MyWallSt
Jamie is the Content Editor here at MyWallSt. His favorite stock is Apple, which is also the first stock he ever bought. Jamie is not only a big fan of its products, but he believes that the tech giant has a whole lot more to give the world, and hasn't even scraped the surface of its potential.