Tesla Motors Inc (NASDAQ:TSLA) stock is has been performing incredibly well all through 2013. In the last three months, the company’s stock is up by more than 50%, while the wider Nasdaq has risen by just under 3%. With that phenomenal growth, and little in profits to back it up, many investors are wondering whether or not the stock is in a bubble. External factors might just decide that for them.
There are a couple of major trends at the moment that are destabilizing the equities market and depressing returns on equities market. With so many investors wondering about the stability of Tesla Motors Inc (NASDAQ:TSLA) there’s danger of huge volatility in the stock, a small quake in the wider market could cause a landslide at Tesla.
Syria could kill Tesla stock
The stock market is currently in a volatile period right now because of the uncertainty surrounding Syria. The market and the media are expecting the Obama administration to announce some action on Syria in the coming days, but the lack of certainty on the shape that action will take is shaking the market.
The United States, France and Britain have announced air strikes on Syria in order to prevent the use of chemical weapons, but there is still uncertainty about how long the military action in Syria will last and what the reaction will be from Syria and its allies. Stocks saw some return to growth today, but the uncertainty surrounding Syria might bring a flight to safety. Tesla Motors Inc (NASDAQ:TSLA) stock is anything but safe.
QE3 tapering is likely to bring a depressed market
In the last three months the Nasdaq has only grown by 3%. The S&P 500 is actually down by more than 1% in the same period. There are many different causes behind the depressed returns in the wider market, but the expectation that the Fed is planning to taper QE3. Tapering of QE3 will likely make equities markets less attractive to investors.
If Tesla Motors Inc (NASDAQ:TSLA) is in a bubble, and considering the amount of people talking about just that it seems likely, the first sign of weakness might send a huge amount of investors getting out and sealing in the gains they’ve already made. QE3 tapering and the crisis in Syria could cause the shakiness required to burst the Tesla Motors Inc (NASDAQ:TSLA) bubble. Investors will be watching with bated breath.