The Threecap
Three things to recap this past week.
1. A Slow Week for Stocks
With the end of the highly-contested election cycle, the market has remained relatively stable as we head into the winter holidays. The Dow Jones dropped 0.74%, the S&P 500 fell -0.77%, while the NASDAQ gained 0.22% on the quiet week.
It remains to be seen if the rotation from “stay-at-home” tech stocks to consumer and industrial stocks will continue in light of new COVID-19 lockdowns. For now, as positive vaccine news continues to roll out, that trend should be maintained as investors eye 2021.
2. The Future is Bright, the Present is Not
After Pfizer and BioNTech announced that they had created a 95% effective vaccine, Moderna announced that its vaccine was 94.5% effective in trials, effectively establishing the top two candidates. The Oxford/AstraZeneca was just cited as 70% effective, providing an excellent third candidate. For now, optimism is high that life will return to normal once vaccines are rolled out.
The present, however, is not as bright. The global case count is approaching 60 million, while the U.S. has surpassed 12 million cases. The United States has announced fresh restrictions across many states, while European countries have also instituted new lockdowns.
3. Tesla: The Newest S&P 500 Addition
In a historic addition, Tesla will be added to the S&P 500 index, after not being included initially in September. The automobile company’s stock is quickly approaching a market capitalization of $500 billion, running up the valuations of other automakers. However, given the advanced technology utilized in Tesla’s cars, many view Tesla as a tech company, not just another automaker. This explains the incredibly high valuation.
With Tesla now effectively generating profits and included in a major index, the market has acknowledged that electric vehicles will be the next big phenomenon in transportation. China’s automakers, such as Nio, XPeng, and Li Auto are being flooded with investor money and valued in the tens of billions. Tesla is the future, but it has competition.
Recent Articles
Basics of Forex Markets
When considering options to invest our money, typically, young investors will gravitate towards the stock market. They may also be familiar with bond or commodity markets. Despite this, the currency market, also known as the forex (foreign exchange or FX) market, is the largest market in the world. The forex market size now exceeds an average of $5 trillion per day in total volume, primarily being traded in the UK and by professional traders. As of recently, platforms have made currency exchange far easier for the average investor.
Marginal Tax Rates
Taxes are nearly always given a bad reputation due to their confusing nature and the incredibly mysterious tax laws that the United States currently has. y understanding the tax laws, you are able to potentially save money and regulate your spending so you know what to expect each year when it comes time to deal with the IRS. In this article, Alex Patel explains a particularly confusing aspect of income taxes — marginal tax rates. There are many misconceptions, especially with regards to income taxes, as the United States taxes different income brackets at different rates.
Recent Podcast
In this episode, Rohan Gupta and Alex Patel talk to Andy Rachleff, the CEO of Wealthfront, about automated money management. They delve into topics like passive investing, the benefits of automation, financial advisory, and much more!
Check out the episode to learn about the COVID-19 market so far in a simplified way!
Team Member Showcase
Mira Patel
Social Media Specialist
Junior in High School
Daily Routine: Outside of school, I golf and play tennis the majority of the week.
Why you joined StreetFins: I joined Street Fins because I’m really interested in business and marketing and thought StreetFins is a really neat platform.
Finance Tip
“To finance longer life spans, we must convince individuals to start investing now for the long term. But longevity should be an asset that can be levered, not a curse. They must understand that there's a cost to sitting in cash. No one talks about that cost. ” ― Laurence D. Fink