Press Esc to close

Welcome to Money Morning - Only the News You Can Profit From.

Close

We'll Tell You When It's Time to Tap Tesla

A week ago today, in a strategy story aimed at helping you survive and thrive in today’s whipsaw markets, Chief Investment Strategist Keith Fitz-Gerald told us to put Tesla Motors Inc. (Nasdaq: TSLA) on our “watch lists” for a likely future purchase.

“BP, Tesla is a definite ‘shopping list’ stock,” Keith told me back then. “We’ve been nibbling at it here, and have played it successfully several times. But it’s not yet at the point where I’m ready to jump all the way in. I think my rationale behind Tesla remains upbeat. I mean, you’ve got a real winning combination here – a disruptive sales model, a CEO who’s the most innovative guy on the planet, all the capital in the world that can be brought to bear. I don’t give a rat’s [tail] that New Jersey won’t let the company sell its cars there. There are much bigger opportunities. Wait ’til you see what the company does with China.”

Sometimes I think Keith has a “crystal ball” in his hip pocket…

  • U.S. Economy

  • U.S. Escalates Trade Dispute With China The United States launched another salvo in a trade dispute with China last week when it imposed new duties on imports of steel pipes, escalating tensions between the two powers.

    The Chinese government quickly fired back, accusing the U.S. of "protectionism."

    The U.S. International Trade Commission (ITC) voted unanimously on December 30 to impose duties between 10.36% and 15.78% on the pipes, which are used mostly by the oil and gas industries. Those new tariffs are designed to negate the subsidies that the U.S. government says China gives its steelmakers. Read More...
  • GDP Revised Lower For Third Quarter, Sets Stage For Slow Growth in 2010 The U.S. economy expanded at a slower rate than expected in the third quarter, but reductions in corporate spending and inventories have set the stage for continued growth of gross domestic product (GDP) in 2010.

    GDP, a broad measure of economic activity, rose at a 2.2% annual rate from July through September, the Commerce Department reported yesterday (Tuesday), compared to a 2.8% gain in its previous estimate.

    The new figure was below the 2.8% median estimate of 73 economists in a Bloomberg News survey, and significantly below the government's initial estimate of 3.5%. The GDP report is the third and final for the quarter.

    Read More...
  • The Recovery is Picking Up Speed, Setting the Stage for Big Gains in the Next Year Do you hear a rumbling, a honking, the smell of new carpet in the air? If so, it's all a result of the biggest surprise of the past month: the rise of U.S. vehicle sales, which was supposed to have ended with the "Cash for Clunkers" deal over the summer.

    And it's a very positive surprise.

    The U.S. auto industry may be beleaguered, beaten, bruised and battered, but it is still extremely important to this country. If it can get rolling again, shocking the skeptics, then a lot of good things will happen.

    When car sales rise, auto factory production rates rise, causing more car parts to be ordered, more steel and rubber and glass ordered and more advertising purchased. This leads to more people being hired in manufacturing, product planning and marketing, and all ancillary industries. A stronger auto industry will make the U.S. economy start to spin faster on its axis in ways no one is expecting. You cannot overestimate the importance of the improvement of this key industry, and yet I really don't think that investors are really onto it yet.
    Read More...
  • Investment News Briefs With our investment news briefs, Money Morning provides investors with a quick overview of the most important investing news stories from all around the world.

    Sovereign Fund Attempts to End $7.5 Billion Citi Share Purchase; Credit Suisse to Pay U.S. $536 Million Penalty; Cohen: U.S. Economy to Slow in 2010; Roy Disney Dead at 79; Former TPG, Lazard Employees Sued by SEC for Insider Trading; Galleon Group Founder Indictment Alleges Fraud, Conspiracy; Comcast Launches Online TV Service

    • The Abu Dhabi Investment Authority (ADIA) is trying to call off a deal it made to buy $7.5 billion of Citigroup Inc. (NYSE: C) stock at eight times yesterday's (Wednesday) price, saying Citi misled it about the investment, Bloomberg News reported. The sovereign fund alleged "fraudulent misrepresentations" and seeks more than $4 billion in damages if the deal is upheld, ADIA said in an arbitration claim. Citi calls ADIA's claims "entirely without merit."
    • Switzerland's Credit Suisse Group AG (NYSE ADR: CS) will pay the U.S. government $536 million for conducting business with Iran and other sanctioned countries, prosecutors said yesterday (Wednesday). The bank moved more than $1.6 billion through the U.S. financial system on behalf of Iran, Sudan, Myanmar, Cuba and Libya, documents filed in federal court and obtained by Reuters showed.
    • U.S. housing starts rebounded sharply, rising 8.9% to a seasonally adjusted 574,000 units on an annualized basis in November, the Commerce Department said. Economists polled by MarketWatch.com were expecting a pace of 563,000. "We now expect both starts and permits to rally significantly further over the next few months, though the big test for the market will come in the spring," said Ian Shepherdson, chief U.S. economist at High Frequency Economics Ltd.
    • Read More...
    • How Washington Will Mess with Your Money in 2010 In this era of growing government involvement, it's no surprise that Washington is poised to be the biggest economic wild card of the new year.

      Indeed, investors who are trying to estimate the impact that politics will have on their portfolios in 2010 are likely finding this attempt at analysis to be an exercise in futility.

      If that's been the case, read on: Political pundits - even those who claim to be impartial - spend a lot of time trying to score points for their side. But they aren't really that interested in the economic aspects of the endless battle. I certainly don't claim to be any more unbiased than the next person. However, I thought it worth trying to take an educated guess at what will actually happen, and what it will mean for our money.

      Read More...
    • Investment News Briefs

      With our investment news briefs, Money Morning provides investors with a quick overview of the most important investing news stories from all around the world.

      Survey: China Investments Will Continue to Grow Next Year; Japan's Q3 GDP Revised Down; Kraft Offers Changes to Cadbury Bid; Volkswagen Buys 20% Stake in Suzuki; Research in Motion Option Activity Surges; U.S. Inventories Rise for First Time in 13 Months; Sprint Shares Rise After Citi Upgrade; Neiman Marcus Hit Hard

      • A survey of 369 U.S. firms showed China will continue to be U.S. companies' top investment destination in 2010, the American Chamber of Commerce (AmCham) in Shanghai said yesterday (Wednesday). More than 90% of those polled by AmCham had an optimistic business outlook for the Red Dragon, up from 81% in a similar 2008 survey. The study also revealed that 64% of companies polled plan on increasing their 2010 investments in China, up from 58% that increased their investments this year. "American companies are finding that their performance in China is the bright spot in an otherwise difficult global picture," said AmCham Shanghai Chairman J. Norwell Coquillard.
      • Japan's economy grew at a much slower pace than previously thought, with government figures showing a revised growth of 0.3% on a quarterly basis, down from the initial 1.2%. On an annualized basis, Japan's gross domestic product (GDP) grew 1.3%, well below the preliminary 4.8% growth estimate. Consumer spending did improve thanks to stimulus measures, but the corporate sector continued to lag, the data showed.
        Read More...
      • GM's Search for CEO Won't Likely Be Part of the "Old Guard" The circumstances surrounding the resignation of General Motors (NYSE: GRM) Chief Executive Officer Fritz Henderson are still unclear. But it's likely that whoever succeeds Henderson will no doubt have a turnaround plan more compatible with that of the company's board, and will likely come from outside of GM's ranks.

        Henderson, who resigned Tuesday, was a longtime GM veteran who joined the company's treasurer's office in 1984. The Detroit-born Henderson is the son of a former GM executive. He became CEO in March after the Obama administration ousted then-CEO Rick Wagoner.

        And therein was the problem: Henderson was so firmly entrenched in GM and its old culture that it was trying to shake, the board lost confidence in his ability to transform the company that would one day emerge from years of declining market share, a tainted consumer perception, and ultimately, bankruptcy.

        Read More...
      • Which of the "Rich Four" Countries Will Default First? Volume in the credit default swap market for rich countries has soared and so have credit spreads, according to a recent Financial Times story, while volume in emerging markets CDS has stagnated. In other words, traders are betting against the governments with high budget deficits, like Britain and the United States, as well as against […] Read More...
      • When Stimulus Spending Winds Down, Will U.S. Businesses Step in For Tapped-Out Consumers? [Editor's Note: This is Part II of a two-part story that looks at the prospects for the U.S. economy in 2010. It's part of Money Morning's annual "Outlook" forecasting series. In the days and weeks to come, watch for additional installments addressing the 2010 outlook for gold, oil, banking, foreign markets and other key topics. Part I of the U.S. economy forecast story appeared yesterday (Tuesday). ]

        It's no secret that government spending has been fueling much of the growth in the $14.2 trillion U.S. economy. And if consumers aren't ready for the handoff when that stimulus spending winds down - and they certainly don't appear to be - it will be up to the U.S. business sector to carry the ball.

        And it's not at all clear that Corporate America is ready, willing or able to fulfill that role. Read More...
      • Is a Second U.S. Stimulus Package Headed Our Way? Is the recent market softness something to be worried about?

        Not if U.S. President Barack Obama & Co. comes through with a second stimulus package – as I’m expecting.

        Let me explain …

        There are a few reasons to suspect that the softness we’ve been seeing will continue for a week or so. Small-cap stocks – which continue to drag along like road kill caught on the rear bumper of the market – are our main cause of concern at the moment.
        Read More...
      • Investors Needn't Fear a Double-Dip Recession A new report contains some very good news for investors: Double-dip recessions are very rare. That means that a drop back into recessionary conditions looks less and less likely even as unemployment creeps higher and has crossed the 10% threshold for the first time in a quarter century. After reviewing U.S. economic history all the […] Read More...
      • Unemployment Rate Cracks Double-Digit Barrier at 10.2%, Boosting the Odds of a "Jobless Recovery" Welcome to the jobless recovery. The U.S. unemployment rate zoomed to an unexpected 10.2% in October, piercing the double-digit barrier for the first time in 26 years as employers continued to slash payrolls even as the nation's economy continues to improve. The jobless rate pierced the psychologically important 10% barrier for the first time since […] Read More...
      • Investment News Briefs Fed Keeps Rates, Language the Same; U.S. Services Slow, But Still Growing; ADP: Private Sector Job Losses at Slowest Pace Since July 2008; Microsoft Lays Off 800; Berkshire Could Lose AAA Rating; N.Y. Files Antitrust Suit Against Intel; Google's Lobbying Budget Up 50% in Q3; Better Garmin Results Can't Stop Stock Selloff Read More...
      • Where to Find Big Profits in a Post-Crash World [Editor's Note: The essay that follows was adapted from "Fiscal Hangover," a brand-new global investing book written by Money Morning's Keith Fitz-Gerald. For more information - including details on how to get a $10 discount off of the cover price - please click here.] As I write this, everyone from Wall Street to Main Street […] Read More...
      • Unemployment Figures Increase Odds of Jobless Recovery The number of unemployed Americans jumped more than expected in September, raising the unemployment rate to 9.8%, the highest level since 1983.  The latest data suggest the odds are increasing that the economy may be suffering through its second “jobless recovery” in eight years. U.S employers cut 263,000 jobs from payrolls in September the Labor […] Read More...