Fed's ripple effect, Tesla shareholder vote, Virgin Galactic: Morning Brief
On today's episode of Morning Brief, Yahoo Finance's Seana Smith and Brad Smith break down the market open and the biggest stories of the trading day. The Dow Jones Industrial Average (^DJI) dropped more than 100 points at the market open, while the S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) moved into positive territory after Wednesday's breakout session. This comes after the Federal Reserve left interest rates unchanged on Tuesday as inflation continues to cool. Evercore ISI Vice Chairman Krishna Guha explains that there's no rush to get to the Fed's 2% target, saying, "I am optimistic that we're heading in the right direction. I think it's reasonable for the Fed to say, 'okay, but I'm not just going to turn over one good card and say, that's all right, I want to turn over several cards and check we're in more of a trend here.'" On the other hand, Northwestern Mutual Wealth Management chief investment officer Brent Schutte believes the economy is still on track for a recession, stating, "investors are discounting too easy of a process. They think miraculously inflation is going to come down without causing or having the economy slow too much to cause a recession." Tesla (TSLA) shares are trading higher after CEO Elon Musk said the shareholder vote on his pay package is passing by "wide margins." CFRA Research analyst Garrett Nelson is bullish on Tesla and Musk, explaining, "You look back at his 2018 compensation plan; it was entirely incentive-based. There was no salary, and he's really delivered for shareholders over the last 5 to 6 years. And so I think that's why you've seen, just this week, a number of very large investors come out in favor of this because Elon's incentives are really aligned with the interests of shareholders." Virgin Galactic (SPCE) shares are falling after announcing plans for a 1-for-20 reverse stock split. On the other hand, Broadcom (AVGO) shares are soaring after topping second quarter earnings expectations and announcing a 10-for-1 stock split. Meanwhile, Bank of America raised its price target on Boeing (BA) from $180 to $200, noting that the company is "too big to fail." This post was written by Melanie Riehl
