In today’s recap, we talk about how Elon Musk becomes the seventh richest person in the world and the effects on the economy of a second wave of the pandemic.
Tesla CEO Elon Musk just passed Warren Buffett to become the world’s 7th wealthiest person. Musk’s fortune rose to over $6 billion Friday after Tesla’s stock surged 10.8% to a record $1,544 per share. Its market value now stands at $286.5 billion. Musk still owns 20.8% of Tesla’s stock, making his shares worth just under $60 billion.
U.S. consumer prices increased by the most in nearly 8 years in June as businesses reopened, driven by rises in the prices of gasoline & food with the consumer price index increasing +0.6% last month, the biggest gain since August 2012, after easing -0.1% in May. However, the overall underlying trend still suggests inflation will remain muted, thus allowing the Federal Reserve to keep injecting money into the sputtering domestic economy.
The U.K.Office for Budget Responsibility says Britain’s economy may shrink by over 14% in 2020, in its largest GDP decline in 300 years. Largely due to the lasting damage from the coronavirus, pushing government borrowing to nearly $500 billion, to between 13% & 21% of GDP, thus lifting public debt to above 100% of GDP.
JPMorgan Chase reported Q2 earnings Tuesday beating analyst’s revenue & profit forecasts, reflecting strong gains in its corporate & investment bank division. Investment-banking revenue surged 91% & fixed-income markets revenue roughly doubled, as equity-markets revenue rose 38%. Net income was $4.69B vs. $3.27B estimated.
Netflix shares tumbled -6.52% Friday to below $500 a share again, shedding as much as $19B in market valuation at 1 point, after earnings fell below a lofty profit consensus & weak guidance was given for Q3. While it added 10.1M new paid subscribers in Q2, it sees growth slowing, as consumers get through the initial shock of COVID & social restrictions.
The largest U.S. banks have so far put aside over $52 billion to prepare for further potential losses this year, after government ordered shutdowns triggered historic unemployment & a slowdown in spending. Short term reversals & slows downs in business re-openings in various U.S. states, is forcing lenders to remain cautious.
U.S. home building increased in June; Companies would not access the bankruptcy law in the US for paying bonuses to executives; New round of stimulus in Europe boosts markets; BlackRock reported a 21% jump in Q2; Big drop in Citigroup’s quarterly profits; Wells Fargo swung to a Q2 loss