9th May 2018
Questions about cash holdings no longer cool
This week Elon Musk’s refusal to answer “boring” questions about Tesla’s finances cost the company $2bn in market value. Its first quarter revenue and earnings were better than expected; Wall Street analysts mainly wanted to know why he burnt through more cash than expected. However, “boring, bonehead questions are not cool”.
Losses were not confined to Tesla. Investors have also been fretting about the outcome of the US-China trade talks in Beijing. Some good news for the Fed though; it has been able to hold off on raising rates until next month as inflation has almost risen in line with target.
Back in the UK, investors mainly had the local elections to worry about. With one of the last outspoken Remainers resigning from Theresa May’s cabinet on Sunday, there were concerns that heavy Conservative losses would add even more doubt as to what will actually happen when the UK leaves the EU.
The results however turned out decidedly mixed. Elsewhere, oil was unsettled by “new and conclusive” proof from the Israeli Prime Minister that Iran has been stockpiling nuclear weapons, fuelling fears that the Iran nuclear deal will be abandoned.