Stocks sold off this week in the last week of the third quarter. The Dow declined 1.1% while the S&P 500 was down 0.5%. Even with the down week, the S&P 500 had its best quarter since 2013. The market sold off sharply in February and March, but has steadily recovered throughout the rest of the year. The market remains near all-time highs.
I wrote a couple weeks ago about the seeming collapse of Elon Musk, co-founder and CEO of electric car company Tesla. This week, the SEC announced it was suing Elon Musk over a controversial tweet he sent on August 7th. In the tweet, Musk claimed he had funding secured for a deal to take Tesla private at $420/share. While he had preliminary discussions with the Saudi Arabia wealth fund over the summer, the SEC has determined Tesla/Musk had no future discussions in the week leading up to the tweet and the company didn’t hire any advisors to help with a potential deal. This suggests there is no way he truly had ‘funding secured’ as he stated in his tweet. The stock increased after the tweet as investors reacted to believing there was a $420/share offer on the table. The stock has sold off sharply since them, including a 14% decline today. The stock is down over 30% from its highs in August. The SEC is seeking to permanently ban Musk from being involved with the management and running of Tesla. Many securities lawyers seem to believe the SEC has a very strong case. Read More
Oil increased this week, gaining 3.3% to close at $73.55/barrel. The yield on the 10-yr Treasury moved sideways, closing at 3.06% again this week. The average rate on a 30-yr fixed rate mortgage moved higher to 4.72%, from 4.65% last week. This is the highest average mortgage rate in over seven years.