STOCKS
Tesla Motors Inc. (TSLA, -0.38%) is giving away money. On
Wednesday, the electric car company announced that they will be introducing a
referral program. That is, all new car buyers will receive $1,000 if they have
used a referral link from a previous buyer. The new buyer of the Model S
electric sedan, with a starting price of $70,000, will receive a reduction of
$1,000 off the new car, accessories or services. This new referral program was
unveiled by the Chief Executive of Tesla, Elon Musk, during a conference call.
Let’s put it into perspective. Tesla spends approximately $2,000 in order to
sell a car through its stores. The aim now is to boost ‘word of mouth’ and in
this way, Musk is hoping that this will reduce the need to open new stores in
the future. Musk stated during the call that while Tesla is planning on opening
new stores, they are hoping that their latest referral program will assist them
in reducing the number of these stores. In addition, Elon Musk stated that the
referral program can be viewed as part of Tesla’s “guerrilla battle" with
other car dealers. Today, Tesla does not use car dealerships in order to sell
their cars and this is done instead by the company directly to customers. The
problem however is that in some states, such as West Virginia and Texas, Tesla
is not able to do this. The new referral program will provide existing Tesla
car owners the ability to give their friends a $1,000 discount and in addition,
if someone provides 5 referrals, the original car owner will be invited to
visit and tour the "gigafactory" of Tesla which is located outside
Reno, Nevada and will also be invited to attend the grand opening party. Should
a customer refer 10 new buyers, they will be entitled to purchase the Founder
Series Model X, which is currently not available to the public. All options
will be provided free of charge in the new car. In addition, the customer who
reaches 10 referrals first, will receive the Founder Series Model X free of
charge. Interestingly, the shares of Tesla declined after the unveiling of the
referral program and they are currently trading at $263.82 a share.
INDICES
On Wednesday, U.S. stocks closed higher. This came after
Chairwoman, Janet Yellen, of the Federal Reserve provided no clear indication
regarding the timing of an interest rate hike by the central bank. Yellen did
however leave room to act as early as September this year. According to Yellen,
this increase would be dependent on ‘solid’ gains in the jobs market. There was
a unanimous vote among policy makers to maintain the current interest rate and
it was made clear that the timing would be dependent on economic data out of
the country. At the close of trading, the S&P 500 index (SPX) rose 0.7%, or
15.32 points, to 2,108.57. All 10 of the index’s sectors finished higher. This
came in response to an increase in oil prices which boosted energy stocks while
consumer discretionary and industrials stocks also advanced. Also on the upside
was the tech heavy Nasdaq Composite index (COMP) which rose 0.4%, or 22.53
points, to 5,111.73 while the Dow Jones Industrial Average (DJIA) advanced
0.7%, or 121.12 points, to 17,751.39. This marked the 5th consecutive
triple-digit move for the blue-chip index.
CURRENCIES
On Wednesday, the U.S. dollar (USD) traded higher. This came
despite poor data on pending home sales in the U.S. in June after 5 months of
increases. According to the National Association of Realtors, their index of
pending home sales declined to 110.3, down 1.8% in June. This missed expectations
for a gain of 1.0%. Despite the decline, it was still the 3rd highest reading
this year. The EUR/USD traded at 1.1034, down 0.22% while the USD/JPY traded at
123.74, up 0.14%. Against the Canadian dollar, the Swiss franc and the British
pound, the U.S. dollar traded mixed with the USD/CAD steady at 1.2926, the
USD/CHF steady at 0.9625 while the GBP/USD was up 0.41% and trading at 1.5677.
The U.S. dollar index was at 96.88, up 0.12 percent.
COMMODITIES
In Asian trading on Thursday, crude oil prices gained. This
came in response to the positive assessment of economic growth prospects in the
U.S. while investors digested the comments by the Federal Reserve with the
expectation that an interest rate hike could take place this year. WTI crude
for September delivery traded at $48.90 a barrel, up 0.23%, on the NYMEX. In
addition, on Wednesday, Brent crude oil for delivery in September traded at
$53.36 a barrel, up 0.11%, or $0.06, on the Intercontinental Exchange (ICE) in
London. The spread between the international benchmark of crude stood at $4.61.
The Daily Market Review brought to you by Billionaire Forex UK in collaboration with STOCK.
No comments:
Post a Comment