Are Shutdown Concerns Hitting Investors Now?
On Wednesday, investors became less enthusiastic as they began to wonder how long the government shutdown would last.
The government shutdown finally inspired a bit of risk aversion on Wednesday, as investors began to wonder about how long the budget impasse would continue.
After being presented with a number of economists’ opinions that annual GDP would decline by 0.1 percent for each week that the shutdown persists, investors became more cautious. Traders experienced a bit of excitement in the afternoon, when a video of a burning Tesla (NASDAQ:TSLA) on Washington State Route 167, near Seattle, was posted on YouTube. Tesla stock had already fallen from Tuesday’s closing price of $193 to $185 after Ben Kallo of Baird downgraded TSLA from “outperform” to “neutral”, citing concerns about whether the company can meet its milestones – particularly with regard to the introduction of its upcoming Model X.
The comments posted in reaction to the YouTube video included a number of entertaining conspiracy theories. The most important criticism focused on the fact that the fire was in the front of the car, where the trunk is located. The battery and engine are in the rear of the vehicle. After TSLA shares had fallen more than 7 percent, to $175.40, the company released the following statement, which got the price back up to $180.95 by the closing bell:
“Yesterday, a Model S collided with a large metallic object in the middle of the road, causing significant damage to the vehicle. The car’s alert system signaled a problem and instructed the driver to pull over safely, which he did. No one was injured, and the sole occupant had sufficient time to exit the vehicle safely and call the authorities. Subsequently, a fire caused by the substantial damage sustained during the collision was contained to the front of the vehicle thanks to the design and construction of the vehicle and battery pack. All indications are that the fire never entered the interior cabin of the car. It was extinguished on-site by the fire department.”