Good Evening. Here is everything you need to know about today’s recap on the in’s and out’s of the major market and economic events.
Stocks fell further on Friday, ending the week in negative territory for the second week in a row, as global tensions worsened, contributing to a continued risk-off tone in markets.
The S&P 500 sank 0.71% to 4,348.97, following a 2% drop the day before, while the Dow Jones index fell 0.68% to 34,079.12, after losing 1.8% on Thursday for its worst day in over three months. The Nasdaq Composite Index fell 1.23% to 13,548.07.
LEGAL
The most recent development is that Tesla has accused the SEC, Wall Street’s top cop, of harassing Musk in order to “chill” his right to free expression.
The lawsuit comes from a settlement reached in 2018 over Musk’s tweet stating he had “financing secured” to take Tesla private.
- Musk allegedly violates securities legislation by making such assertion, according to the SEC, because he wasn’t telling the truth.
- The two parties came to an arrangement that included fines of $40 million, Musk’s removal from his chairmanship for three years, and the need that certain Musk tweets and other public statements be cleared by lawyers.
However, it has hit a new high
Let’s return to Tesla’s letter to the SEC from yesterday. “Worst of all,” it says, “the SEC appears to be relentlessly investigating Mr. Musk and Tesla, partly because Mr. Musk remains an outspoken critic of the government.”
Musk has undoubtedly mocked his own government to a degree we haven’t seen from a big-name CEO in a long time…maybe ever? Here are a few examples:
- President Biden has been ridiculed by Musk for forgetting to name his business when praising the progress of electric vehicles in the United States.
- He also criticized the “fun police,” aka the National Highway Traffic Safety Administration, for a recent recall of over 500,000 autos with a function that produces fart noises.
The beef doesn’t end at the border with the United States. Musk has been a vocal critic of Canadian Prime Minister Justin Trudeau, and he recently shared a meme comparing him to Adolf Hitler (which he later deleted).
Musk’s detractors claim that these remarks are not only juvenile and disrespectful but also hypocritical, given the billions of dollars in government subsidies that his companies have received.
Looking forward… Authorities don’t appear to be discouraged by a few snarky tweets. Teslas apparently brake unexpectedly when using the company’s Autopilot feature, prompting safety regulators to begin an investigation. It’s the third federal safety investigation into Tesla in the last six months.
GEOPOLITICS
The S&P 500, Dow, and Nasdaq all saw their contracts fall. As prices rose, investors flocked to safe-haven assets, and Treasury yields plummeted. After dropping below 27 early in the morning on Friday, the Vix soared up above 28.
The news that Russia has accumulated 190,000 military men near Ukraine added to the decrease, putting an end to earlier hopes that diplomatic negotiations would lead to a de-escalation of hostilities in the region. Russian Foreign Minister Sergei Lavrov and US Secretary of State Antony Blinken would meet next week, according to the US State Department.