Dow Jones futures up 159pts, Tesla share price passes $800 mark
We look at where futures markets suggest the Dow Jones Industrial Average will open on Friday, 8 January 2021.
Dow Jones futures point to higher open on Friday
The Dow Jones Industrial Average rose 211 points or 0.69% overnight, finishing out the session at the 31,041 point level.
At the time of writing, Dow Jones futures traded some 159 points higher, suggesting that the key US benchmark would open higher on Friday, 8 January 2021.
Optimism has persisted in US markets despite ugly scenes in Washington DC, which saw rioters storm the US Capitol building on Thursday. This ‘attack on democracy’ did little to phase investors, however.
In looking to explain the market’s indifference, CIO of Bleakly Advisory Group, Peter Boockvar said:
‘It’s because it has no bearing on the direction of the economy, earnings and interest rates. It’s that simple.’ – via CNBC.
The battle between the past and present
Despite those gains, it was Tesla which once again stole the show. The electric automaker, that continues to defy expectations, historical investment valuation metrics, and short sellers, finished out the session up 7.94% at $816.04 per share.
As if to highlight the seemingly ‘never ending’ demand for the stock, the automaker continued to rise in after-hours trade.
The Tesla share price is now up over 700% YTD.
This comes after the often controversial billionaire investor Chamath Palihapitiya went on CNBC on Thursday, 8 January and told investors ‘Don't sell a [TSLA] share.’
Mr Palihapitiya reiterated his previously expressed view that Tesla is more than a mere automaker, describing it as a ‘distributed energy business’ and saying:
‘Delivering clean energy and allowing the world to be sustainable is an incredibly important thing that will be rewarded by markets and individuals.’
If investors believe one thing, it appears to be that Tesla is emblematic of the new world – a world where every car will inevitably be electric and one in which the company has revolutionised a spate of other industries. Of course, the company isn’t there yet – but investors are hopeful. The stock, after all, trades on a highly hopeful 1,616x earnings multiple.
And that maybe sums up the battle between the past and present investors are currently grappling with: The Dow Jones Industrial Average – founded in 1896 – represents the old economy, boasting names such as Coca-Cola, Goldman Sachs and Cheverton.
By comparison, the likes of Tesla, as investors perceive it rightly or wrongly – represents the new economy. That is, the future.
As with the Dow, S&P 500 and Nasdaq futures also traded higher at the time of writing, suggesting that all of the key US benchmarks would open in positive territory on Friday.
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