Why Tesla Motors, Inc. Stock Soared in December

By Daniel Sparks Markets Fool.com

What happened

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Shares of electric-car maker Tesla Motors (NASDAQ: TSLA) soared 17.5% in December, according to data provided by S&P Global Market Intelligence. The stock's rise helped it recover some of its pullback earlier in the year.

The Tesla Model S. Image source: The Motley Fool.

So what

There's no surefire reason for Tesla's 17.5% gain during the month, but one did stand out as the most likely catalyst for at least a portion of the gain.

Tesla stock had pulled back in the weeks following the U.S. presidential election, perhaps because investors were concerned about how Tesla could be impacted during Trump's time as president. Trump has expressed disbelief about global warming and outlined actions for eliminating some government spending related to climate change. But sentiment about how Tesla might fare with Trump as president turned rosier when the president-elect started cozying up to Elon Musk. Trump invited the Tesla CEO to his tech summit meeting in New York City, and even appointed him to his Strategic and Policy Forum.

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So, Tesla stock may have simply rebounded in December from a sell-off spurred by an overreaction to Trump's election. Of course, there were probably other factors driving the rebound, such as the S&P 500's overall 2% gain during this period, but Trump's warming up to Musk was likely one of the main catalysts for Tesla stock during the month.

Now what

Investors shouldn't read too much into month-to-month moves like this, but it is notable to see Trump keeping Musk close to his side. Still, investors may want to keep an eye on any political action during Trump's presidency that could impact Tesla.

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Daniel Sparks owns shares of Tesla Motors. The Motley Fool owns shares of and recommends Tesla Motors. The Motley Fool has a disclosure policy.