Tesla Wipes Out Post-Election Gains

TECH
Tesla Wipes Out Post-Election Gains

Tesla’s stock has seen a dramatic reversal, wiping out its $700 billion post-election gain. Initially, investors expected Elon Musk’s ties to President Trump to benefit Tesla, but concerns over declining sales and increased competition have overshadowed that optimism.

On Friday, shares fell 4.6%, deepening recent losses. Tesla’s first quarterly sales decline in a decade, combined with weakened positions in Europe and China, has shaken investor confidence. Some also fear Musk’s political involvement is distracting him from running the company.

The broader market downturn hasn’t helped, with the S&P 500 down 7% and the Nasdaq 100 in correction territory. Bank of America slashed Tesla’s price target to $380 from $490, citing risks from slowing sales and robotaxi delays.

While Tesla’s stock is now oversold, opening the door for a potential short-term rebound, its 88x forward P/E ratio remains high, raising valuation concerns among investors.

CRYPTO
Trump Creates U.S. Bitcoin Reserve

President Trump has officially authorized the creation of a strategic Bitcoin reserve and a digital asset stockpile, fulfilling a key crypto industry demand. White House AI and crypto czar David Sacks announced the executive order on X, reaffirming Trump’s commitment to making the U.S. the “crypto capital of the world.”

The U.S. will establish its Bitcoin reserve using 200,000 BTC ($17.4 billion) seized from criminal and civil forfeitures. Unlike previous practices of auctioning off seized Bitcoin, the government will now retain and strategically manage its holdings. Sacks stated that the reserve is a “digital Fort Knox” for Bitcoin.

To acquire more Bitcoin, Sacks said the U.S. is authorized to develop budget-neutral strategies, including leveraging seized assets, tax incentives, and potential Bitcoin mining initiatives. However, no direct purchases have been confirmed.

Bitcoin’s price initially dropped 5% to below $85,000 following the announcement before rebounding to $88,000. The move signals a new era of government-backed Bitcoin accumulation.

ECONOMY
Powell Signals Patience on Rate Cuts

Federal Reserve Chairman Jerome Powell signaled Friday that the Fed will wait to assess the economic impact of President Trump’s aggressive policy changes before making further moves on interest rates.

Speaking at the U.S. Monetary Policy Forum, Powell emphasized patience as the White House implements major shifts in trade, immigration, fiscal policy, and regulation. He noted that the overall economic impact remains uncertain, stating, “We do not need to be in a hurry.”

Despite market expectations for three rate cuts in 2025, Powell’s remarks suggest the Fed will take a wait-and-see approach before adjusting policy. He reaffirmed that the U.S. economy remains strong, with a solid labor market and inflation moving toward the Fed’s 2% target.

The latest jobs report showed 151,000 new jobs in February, with wages growing faster than inflation. Powell acknowledged ongoing inflation concerns but reiterated that policy adjustments will depend on evolving economic data.

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.