Trump's Musk Update Boosts Tesla, Space Stocks

Traders were in a good mood on Monday as they awaited an update on talks between China and the U.S. Commerce Secretary Howard Lutnik reported it was a "good meeting," but President Trump stated that China is "not easy" and talks will continue on Tuesday.

There wasn’t much other news flow, so the market continued its generally positive action that started on Friday with the better-than-expected jobs news. There were some good pockets of action, and small-cap speculative names did well.

Late in the day, President Trump made some positive comments about Elon Musk and Starlink, which caused an abrupt reversal in space stocks and helped to boost Tesla TSLA.

The Apple AAPL Worldwide Developers Conference failed to excite investors, and it dropped 1.2%. However, the Magnificent Seven MAGS was able to gain 1% due to Tesla and Amazon AMZN.

This action is a good illustration of how strong markets tend to stay sticky to the upside. While there are still many concerns about potential economic slowing and higher inflation, it isn’t enough to stop the positive price momentum. There were over 600 stocks hitting new 12-month highs, and breadth was quite strong.

There was a weak finish, with the S&P 500 and DJIA barely closing in positive territory, but the Russell 2000 IWM outperformed again with a gain of 0.7%. Strength in smaller stocks is an indication that speculative juices are still flowing.

EToro (ETOR), which I highlighted on Monday morning, jumped 10.5% and is trading higher after the close.

Have a good evening.

At the time of publication, DePorre was long ETOR.