That’s CNBC host Jim Cramer putting his support behind Elon Musk and his controversial move to reopen Tesla’s TSLA, -0.23% manufacturing plant in Northern California despite county orders.
“There are people who think he’s the greatest, and people who think that he’s willing to sacrifice people on the altar of profit,” Cramer continued. “He may not be as concerned about COVID as every person in the world, but there’s no indication that he’s willing to sacrifice people’s lives.”
As Cramer suggested, Musk certainly has expressed his doubts as to the severity of the COVID-19 pandemic, having called the panic “dumb” back in March and predicting that, by the end of April, the U.S. would probably see “close to zero new cases.”
Musk’s decision to flout the Alameda County order, of course, has also had its fair critics, including a California assemblywoman who lobbed an F-bomb in his direction.
President Trump tweeted support for Musk.
Treasury Secretary Steven Mnuchin chimed in with support, as well.
“He’s one of the biggest employers and manufacturers in California, and California should prioritize doing whatever they need to do to solve those health issues so that he can open quickly and safely,” he said in a separate CNBC interview on Monday.
As the debate raged on between those in favor and those against, Musk has made it clear on social media with a series of tweets that he has no intention of backing down.
Beware of ‘foreign tourists’ pushing up the S&P 500, then bailing when things get bumpy
Reasons to press pause on the stock-buying button are growing plentiful. We’ve got trade tensions, fresh coronavirus outbreaks in Asia and between U.S. coastlines, alongside worries some economies are opening too fast.
It should be no surprise to hear Wall Street preaching caution. Goldman Sachs kicked off the week with a prediction that the S&P 500 will drop 18% in the next three months, as investors brush off virus risks.
Our call in the day falls in line, with a warning from Citigroup’s chief U.S. equity strategist Tobias Levkovich that a bullish case for the stocks left us about six weeks ago, as he sticks to a 2,700 year-end target for the S&P 500.
“Sadly, there still are going to be problems in the next few months with respect to the virus and ongoing challenges for the economic recovery,” said Levkovich and his team, adding that investors will also have to grapple with uncertainty from the coming presidential elections.
Levkovich pushed back on the bullish arguments they have been fielding from clients, such as the view that company cost-cutting should be a positive for profits. He countered that capacity utilization will be constrained, and thus bottom lines.
And then there is the talk Citi has been hearing about foreign money buying up secular growers — stocks that consistently rise over time — with clean balance sheets and free cash flow generation. Levkovich said that is similar to what was seen in the 1990s during the technology, media and telecom bubble, which also impacted the dollar, and some have been wondering if another bubble is building up, and that makes them wary.
“In the past, we have been worried when the ‘tourists’ come in to the S&P 500 since it is often not their area of expertise and those owners could be more like renters when the market hits bouts of turbulence, which can be caused by unpredictable virus developments,” he said.
The Federal Reserve will start buying corporate bond exchange-traded funds on Tuesday. A small-business sentiment survey was not as grim as expected, with consumer prices still to come, and we’ll hear from several Fed speakers, among them Minneapolis Fed President Neel Kashkari and Fed Vice Chair for Supervision Randal Quarles.
Market Wrap Up
U.S. stocks ended sharply lower on Tuesday, erasing the previous day’s gains, as investors monitored tentative efforts to reopen the economy and weighed tensions between Washington and Beijing.
What are major indexes doing?
The Dow Jones Industrial Average fell 457.21 points, or 1.89%, to close at 23764.78, marking its biggest one-day percentage drop since May 1.
The S&P 500 index lost 60.20 points, or 2.05%, to end at 2870.12, while the Nasdaq Composite index shed 189.79 points, or 2.06%, to finish at 9002.55, snapping its six-day win streak.
What’s driving the market?
New clusters of COVID-19 cases have emerged in countries that have begun to lift restrictions on business activity imposed to contain the spread of the disease, a development analysts said may be giving investors pause as U.S. states begin loosening lockdowns in a bid to reopen the economy.
In Wuhan, the Chinese city where the coronavirus first emerged late last year, six people tested positive over the weekend, ending a stretch of more than a month that had seen the Hubei province report zero infections, The Wall Street Journal reported.
Dr. Anthony Fauci, the U.S. government’s leading infectious diseases doctor, warned that the country faces “needless suffering and death” if the nation reopens too early during the coronavirus pandemic, as top health officials emphasized in Senate testimony on Tuesday the need to move with caution and expand testing.
“Markets are being driven day-to-day by news of easing economic restrictions and what that looks like,” said Mark Saylor, portfolio manager at Penn Mutual Asset management in an interview. “You’ve had some positive data out of the New York region, but you’re seeing spikes and incidents in areas that maybe are opening too early.”