Like a SpaceX rocket lofting a Tesla Roadster into orbit, Tesla stock is on a vertical trip into outer space. russ1mitchell explains:
The Fed’s low interest rates have the effect of making equity markets about the only avenue for meaningful returns. Middle- and upper-class people used to retire expecting to live largely on interest thrown off by their investments in bonds. Not now.
At the same time, the steady rise of passive investing, in particular index funds that buy a broad cross section of stocks, has had a massive influence on the market’s long bull run. Offering a low cost entry point for risk-averse investors, passive investing has grown to account for 43% of U.S. shares by market capitalization, reckons Michael Green, partner and chief strategist at Logica Funds.
Inclusion, however, “is not automatic,” said Adriana Robertson, finance and law professor at the University of Toronto Law School. The S&P’s index committee “can decide whenever they want.” There’s no deadline to decide. And a March announcement by the index committee indicates no rush: it put regular index rebalancing on hold until further notice.With the cost of making batteries stubbornly high, Tesla has relied on stock and bond markets, along with government subsidies, to keep afloat.
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