Weekly Market Digest: Musk Sued By SEC, Fed Hikes Interest Rates -

Weekly Market Digest: Musk Sued By SEC, Fed Hikes Interest Rates

Sep 28, 2018Jeremy ParkinsonFinance, No picture0

If you’re a market-focused investor, the big news this week was the Federal Reserve’s move to raise interest rates another 25 basis points, or 0.25%. This came along with messaging that indicated expectations of a fourth rate increase in 2018 with further rate raises expected in 2019.

Also sharply in focus this week was the testimony of Dr. Christine Blasey Ford and Supreme Court nominee Brett Kavanaugh during Thursday’s Senate Judiciary Committee hearing. The hearing centered around allegations of sexual misconduct by Kavanaugh.

Tesla CEO Elon Musk is being sued by the Securities Exchange Commission on grounds that he may have mislead investors in his publicly traded company with his tweet about taking the company private.

Weekly Returns

S&P 500: 2914 (+0.6%)
FTSE All-World ex-US(VEU): (-1.33%)
US 10 Year Treasury Yield: 3.053% (-0.36%)
Gold: $1196 (-0.25%)
EUR/USD: 1.16 (-1.69%)

Major Events

Monday – The US signed an updated free trade agreement with South Korea. Some of the largest provisions surrounded the auto industries of both countries.

Tuesday – President Trump spoke at a United Nations General Assembly, specifically addressing the US’s recent focus on protectionist trade measures.

Wednesday – The Federal Reserve messaged the 3rd short term rate increase of 2018.

Thursday – Goldman Sachs launched online consumer banking platform Marcus in the United Kingdom.

Thursday – Supreme Court nominee Brett Kavanaugh and Christine Blasey Ford testified before the Senate Judiciary Committee.

Friday – Tesla’s share price opened at over 10% down from the previous night’s close based on news that the SEC was suing CEO Elon Musk over his tweet about taking Tesla private.

Our Take

The SEC seems to be specifically targeting Elon Musk rather than Tesla itself. Their suit is reported to be aimed at preventing Mr. Musk from participating in an executive position for any publicly traded US company. As of Thursday evening, it appeared that Musk will fight the case, as opposed to settling directly out of court. Tesla shares closed Friday at $264.77, down more than 12% from Thursday’s close.