Market sentiment was boosted by hopes of a post-pandemic world
Tesla chief Elon Musk became the world’s richest person Thursday as stock markets continued their upward trajectory.
His net worth was boosted by an 8% rise in the value of Tesla shares, pushing him above Amazon’s Jeff Bezos in Bloomberg’s Billionaire’s Index.
Musk saw his fortune surge to just shy of $195 billion, beating Bezos by a cool $9.5 billion. The Amazon founder’s position was weakened by his divorce in 2019 which stripped him of a quarter of his family’s holding in the firm.
Markets gained Thursday as optimism about vaccine roll-outs continued to outweigh the current reality of rising infections.
Wall Street’s three main bourses ended on new highs and Canada’s S&P/TSX Composite Index rose 1.1% to 18,027.57, surpassing the previous record of 17,944.06 set last February.
Among the winners was Musk’s electric-car firm. Tesla’s 7.9% gain meant a market capitalization of around $774 billion.
The firm’s surge led RBC Capital Markets analyst Joseph Spak admitting he got the company’s stock “completely wrong” when he advised investors to sell.
Pot back in favour
Canada’s stock market saw further gains for Shopify and renewed sentiment in the cannabis industry.
The Biden administration appears favourable towards a legalized US pot industry and firms including Canopy Growth Corp. and Aurora Cannabis have benefitted.
Gold and tech were early boosters for the Canadian market, with the main index now 60% above its March 2020 low.
“The drivers of equity returns for Canadian indexes are beginning to change, and our view is that it will continue,” Martin Toner, a Toronto-based analyst for ATB Capital Markets wrote in a client note.
Care required
Despite the market rally, which has continued in early trading Friday, some analysts are warning that investors should be cautious.
“People are going for cyclical names and this is driving the market forward but there has to be care taken as this relies on a rebound in the economy in the coming quarters,” Francois Savary, chief investment officer at Swiss wealth manager Prime Partners told Reuters.
Toronto-based economist David Rosenberg spoke of a “financial bubble of epic proportions” recently.
