Market Weekly: Aug 20 – Aug 26 2018

Viewing 15 posts - 1 through 15 (of 37 total)
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    Where have we been and where are we…



    [size=5][color=black]TESLA is on watch list next week … MUSK is trying maybe too hard & leads a highly innovative company … but new technology is tough to harness, much less beat the ROI of tradition. The 9% haircut in a single day is showing some nervousness to investors in delivery on promises.

    Still, I believe the electric car, power units for home, Space X, etc. are promising for years ahead. But maybe some goals were too aggressive for short term .. esp. MODEL 3s … MUSK does need to slow from a 120+ work week & go more realistically on goals … still I hope they do well in future :)[/color][/size]


    Well put CI – and it gets worse for Mr Musk –

    Exclusive: Saudi PIF in talks to invest in aspiring Tesla rival Lucid – sources

    (Reuters) – PIF, the Saudi Arabian sovereign wealth fund that Tesla Inc (TSLA.O) CEO Elon Musk has said could help him fund a $72 billion deal to take his electric car maker private, is in talks to invest in aspiring Tesla rival Lucid Motors Inc, people familiar with the matter said on Sunday.

    The talks between privately-held Lucid Motors and PIF underscore the latter’s appetite to invest in electric car makers to diversify the oil-rich Middle Eastern kingdom’s investment portfolio.

    A deal with Lucid Motors would also be more in line with PIF’s limited resources, given that, despite its $250 billion in assets, PIF has already made substantial commitments to other technology companies or investments, including a $45-billion agreement to invest in a giant technology fund led by Japan’s SoftBank Group Corp (9984.T).

    PIF and Lucid Motors have drawn up a term sheet under which PIF could invest more than $1 billion in Lucid Motors and obtain majority ownership, the sources said. PIF’s first investment in Lucid Motors, however, would be for $500 million, and subsequent cash injections would come in two stages that are contingent on Lucid Motors hitting certain production milestones, one of the sources added.
    The talks between PIF and Lucid Motors may not result in a deal, the sources cautioned.

    The sources asked not to be identified because the matter is confidential. PIF and Lucid Motors did not immediately respond to requests for comment.

    Musk, a 47-year-old investor and engineer, stunned financial markets earlier this month, when he revealed on Twitter he was considering a $420 per share take-private deal for Tesla, an auto manufacturing pioneer that developed the world’s first ever premium all-electric sedan car.

    He added that funding was “secured,” and elaborated last Monday that he believed Saudi Arabia’s PIF could provide the necessary funding, although sources close to the sovereign wealth fund have played down that prospect. Earlier this year, PIF built a stake of just under 5 percent in Tesla by snapping up shares in the open market, rather than acquiring newly issued shares.

    Musk has also said he believes two-thirds of existing Tesla shareholders would roll over their holdings into a private company, rather than cash out, and that he was still talking with major shareholders and advisers before settling on a structure for a deal.

    Getting access to cheap capital is a constant challenge for automakers, which can spend $1 billion or more engineering a single new model and bringing it to mass production, only to have the vehicle flop because of a cyclical sales slump or a shift in market tastes.

    Based on the edges of Silicon Valley in Newark, California, Lucid Motors was founded in 2007 as Atieva by Bernard Tse, a former Tesla vice president and board member, and Sam Weng, a former exec at Oracle Corp and Redback Networks. It received backing from Chinese investors, including tech entrepreneur Jia Yueting and state-owned automaker BAIC. Other venture capital backers have included Venrock, Mitsui & Co and Tsing Capital.

    Lucid Motors is not yet selling any cars. In 2016, it unveiled a prototype of its Lucid Air model, a $100,000 luxury sedan it had hoped to begin building in Arizona in late 2018. It is not clear when this car will become available, though the company is accepting refundable deposits of $2,500 from consumers on its website.

    Tesla is much more advanced as an electric car manufacturer, though investors are questioning how long can it go before turning a profit. It has been burning through cash as it has aggressively ramped up Model 3 production, a process Musk has called “production hell.”
    Analysts at UBS last week questioned the profitability of the Model 3, in a report that said Tesla could lose $6,000 on every base model.

    Reporting by Dasha Afanasieva in London and Harry Brumpton in New York; Additional reporting by Paul Lienert in Detroit and Saeed Azhar in Dubai; Editing by Nick Zieminski

    Super Harley

    Ooops … Looking more brittle by the day – Tesla Inc NASDAQ: TSLA Pre-market 288.90 −16.60 (-5.43%)


    [color=teal][size=5][b]and a good MONDAY morning to all 8)
    DOW up near +100 as we start week off on a positive note … “Cautiously” we move higher 🙂

    THEME SONG DE JOUR 8)[/b][/size][/color]


    Bank of Canada’s Wilkins :

    Risk management is what monetary policy does
    Financial vulnerabilities in Canada began to grow in 2014
    BOC responded to vulnerabilities by cutting rates
    Mortgage quality improved after macroprudential steps
    Mortgage holders will eventually feel higher rates
    High debt levels mean monetary policy has more impact


    Atlanta Fed President Bostic:

    US economy doing well. GDP strong.
    US unemployment very,very low historically
    Economy doesn’t need as much stimulus as it had
    Fed trying to get policy back to neutral stance
    Fed on gradual walk to get back to neutral rates
    Fed doing pretty well on inflation objective


    Bostic Continues:

    Aim to keep Fed balance sheet unwind running in background
    Yield curve is currently extremely flat, we worry about flatness of yield curve

    Is the trying to convince himself or us?:
    Yield curve does not guarantee a recession
    Not clear that inverted yield curve is a signal but only one and does not guarantee recession will occur


    [color=limegreen][size=6][b]Dow 25,758.69 89.37 0.35%
    S&P 500 2,857.05 6.92 0.24%
    Nasdaq 7,821.01 4.68 0.06%
    Gold 1,197.30 13.10 1.11%
    Oil 66.60 0.69 1.05%[/b][/size][/color]


    Philly Fed Aug non-manufacturing index 41.7 vs 44.3 prior

    Not a big release but a slow day so …..

    Business activity 41.1 vs 35.5
    New orders 29.0 vs 31.5 prior
    Employment 32.2 vs 29.5
    Wage and benefit cost index 46.4 vs 47.5 prior


    [color=green][size=5][b]LONGEST BULL RUN EVER (not sure if they are talking SP500 or “Fake News” – lol)

    FEAR NOT investors — but do proceed with CAUTION & TRUTH 😉 8)[/b][/size][/color]


    Last week had read the report (shown above on this page) published by Reuters, about Tesla.

    What got me was the very last sentence about how UBS stated, Tesla could be losing $6,000 on every base model.

    That would only add to the cash burn which Tesla has been having.


    S&P Futures Sell off on Cohen Headlines
    Lee Saks @Lee_Saks


    [quote=”TradersCom” post=7618]S&P Futures Sell off on Cohen Headlines
    Lee Saks @Lee_Saks

    Reuters – “The plea deal includes a possible sentence of up to 5 years and 3 months in prison, Judge William Pauley III said during the hearing. Pauley scheduled sentencing for December 12 and set bail at $500,000.”

    “Cohen’s lawyer said Trump told Cohen to commit a crime”


    [size=5]CLOSE from yesterday — as cold front with severe t-storm activity kept me offline

    [color=limegreen][b]Dow 25,822.29 63.60 0.25%
    S&P 500 2,862.96 5.91 0.21%
    Nasdaq 7,859.17 38.17 0.49%
    Gold 1,203.60 3.60 0.30%
    Oil 66.49 0.65 0.99%[/b][/color][/size]

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