The daily business briefing: February 20, 2020

Harold Maass
A Tesla showroom
Justin Sullivan/Getty Images


Tesla shares soar after analyst praises solar power potential

Tesla shares saw the latest in a series of big jumps on Wednesday, gaining nearly 7 percent to close at a record high $917.42. This surge was not linked to Tesla's push with its first mass-market car, the Model 3. The gains came after a Wall Street analyst, Alexander Potter of Piper Sandler, raised his price target for the company's stock to $928 from $729, saying the company's solar power products could show growth matching that of its electric cars. "It's easy to forget that Tesla sells batteries and solar power products," Potter said. "But management says that the solar and storage business will one day rival the automotive segment, and if this is true, then investors will eventually need to pay attention." [The Mercury News]


Fed leaders confident they can keep interest rates steady

Federal Reserve officials expressed cautious optimism about the strength of the economy and their ability to hold interest rates steady this year, according to minutes from their last policy meeting that were released Wednesday. "They expected economic growth to continue at a moderate pace, supported by accommodative monetary and financial conditions," the minutes said. "In addition, some trade uncertainties had diminished recently, and there were some signs of stabilization in global growth." Fed leaders acknowledged, however, that there were still some threats to the economy, including the lingering possibility of fallout from China's coronavirus outbreak. [CNBC]


Virgin Galactic shares spike as investors bet on space tourism

Virgin Galactic shares shot up by 23 percent on Wednesday to close at a record $37.35. The stock is now up by 162 percent since the beginning of the year and by 298 percent over the last three months as investors rush to put money into entrepreneur Richard Branson's space tourism company, which is competing with Elon Musk's SpaceX and Jeff Bezos' Blue Origin in the race to offer private citizens the chance to experience space flight. Virgin Galactic, which recently announced progress toward final test flights, is expected to lose money for two years, but since SpaceX and Blue Origin are not yet publicly traded companies it is the only retail stock available for investors betting on commercial space travel. [CNBC, Forbes]


Stock futures inch up following Wall Street's latest record close

U.S. stock index futures edged lower early Thursday after Wall Street closed at record highs on Wednesday. Futures for the Dow Jones Industrial Average, the S&P 500, and the Nasdaq were down by about 0.2 percent several hours before the opening bell. Markets around the world remain focused on China's coronavirus outbreak. The S&P 500 and the Nasdaq gained 0.5 percent and 0.9 percent, respectively, on Wednesday, both closing at record highs after China reported two days of decreasing new coronavirus infections, easing fears of economic fallout from the outbreak. The Dow rose by 0.4 percent. "China's stringent quarantine requirements will likely soon be relaxed, and the government's focus will shift quickly from containing the virus to supporting the economy," said Yan Wang, emerging markets and China strategist at Alpine Macro. [CNBC, The Associated Press]


Airbus slashing defense, space aviation jobs

European aircraft maker Airbus said Wednesday that it is cutting 2,362 defense and space division jobs by the end of 2021. The company told employee representatives it planned to cut 829 jobs in Germany, 357 in the U.K., 630 in Spain, 404 in France, and 142 in other countries. Airbus said the reductions to its workforce were necessary because of a "flat space market and postponed contracts on the defense side." Airbus reported record aircraft deliveries in 2019 but a loss of $1.5 billion on the year due largely to the setting aside of $3.9 billion to cover a criminal settlement with American, French, and British authorities over past corrupt practices. [The Associated Press]