Shares of Tesla (NASDAQ: TSLA) traded up nearly 2 percent in early morning trading on Monday, as positive sentiment around the continued rollout and development of the Model 3 continues to make its way to Tesla’s showrooms across the country. This marks the third week in a row where the Silicon Valley tech company opened the week in positive territory, up sharply despite an ongoing government shutdown that seems to be affecting several players in the legacy auto industry.
Tesla ended the previous week on a high note, with the company’s stock closing out a week of gains and reaching $350.02, a level that the electric carmaker has not seen since October 2017. While Tesla continues to impress the auto community with its latest mass-market electric vehicle, however, shares of TSLA traded down immediately after the market opened, before rebounding and hitting a high of $357.00.
While the causes behind the performance of Tesla on early Monday remain unknown, one of the possible reasons behind TSLA’s initial decline during early trading could be the ongoing US government shutdown. A vote to end the shutdown is scheduled on 12:00 p.m. EST on Monday, the results of which would likely affect the stock market as a whole for the latter part of the day, as noted in a Reuters report.
So far, TSLA has been performing admirably week after week since 2018 began, with the company’s shares climbing to territories not seen since October 19, 2017, when the stock reached an intraday high of $357.15.
Over the past couple of weeks, Tesla has been seemingly hitting its stride as general sentiments improved over the company’s ability to deliver its most disruptive vehicle to date, the Model 3. Display units of the Model 3 have been making their way to showrooms in major markets across the country. The vehicle has also enjoyed a strong positive reaction from automotive journalists and the electric car community as a whole.
In addition, Model 3’s online configurator was recently updated to show options for the highly anticipated dual-motor version of the vehicle. A rumored Model 3 Performance variant, driven by Tesla’s Chief Designer Franz von Holzhausen, was spotted at a Supercharger station in the company’s Los Angeles-based Design Center as well.
Over at Detroit, the shares of legacy carmakers did not fare as well as TSLA during Monday’s early trading. Ford (NASDAQ: F) ended Friday on a weak note, dropping 0.58 percent to $12 per share. When markets opened, Ford’s shares were still down 0.75 percent, trading at $11.92, before trading flat. GM (NASDAQ: GM) performed similarly on early Monday, with the legacy carmaker’s shares dipping 0.58 percent to $42.92 when markets opened.
Overall, both legacy automakers’ shares exhibited a drop last Friday, in line with the shutdown of the US government. Based on the performance of Ford and GM’s stocks on Monday, Tesla might be well in the middle of yet another rally before the Detroit auto giants’ shares begin recovering.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions.