Tesla is driving down the road along with its equities

2016 is so far terrible for Elon Musk. Tesla is down nearly 40%, trading at $148,25. Not only that. His SolarCity is down about 30% from start today. GM look even better at the moment, which is down only 16% YTD.

Barclays maintained an Underweight rating on Tesla and its new price target is $165. Analyst at Barclays Brian Johnson said; «Although we expect an inline 16 guide, so we think the slow ramp may challenge deliveries, cash burn, and margins, while also reminding us of risks in the years ahead to Tesla`s aggressive growth ambitions.»

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Estimize calls for EPS of $0,04, which is 4 cents higher than Wall Street while revenue estimates of $1,8B (up 69% from last year) are right in line with the Street. Estimize is bearish on Tesla`s profitability, moving EPS estimates down 58% this quarter, but still expecting impressive YoY growth of 130%!

Tesla delivered a record 50,580 vehicles but failed to meet volume expectations Tesla set earlier in the year. Investors sent the stock down over concerns that Tesla won`t be able to execute on its ambitions growth plans.

Given operation expenses account for almost 50% of the company`s revenue, missing volume forecasts put a severe damper on margins. Tesla have spent a lot of money in launching its first SUV and building out a sustainable battery.

If the Model X SUV sales are missing like the sales of the Model S sedan, it could have a huge effect on the stock price this year. It is a bearish sentiment on Tesla`s ability to turn a profit in Q4, and analysts have recently downgraded Tesla from a hold to sell rating.

10 out of 15 brokerage firms now say Tesla is a «hold» or worse, but Barclays’ Johnson also said the shares could see a short-term rebound after the March unveiling of the Model 3, especially with an unwinding of current bearish sentiment.

Tesla will report after the bell on Wednesday.

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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We are 1% from a bear market

I started day one this year with this simple words: «And now we welcome the new year. Full of things that have never been». We are finished with just one month of the year 2016, and so far we have seen a lot of things that have never been. Is it more to come?

Yes, I think so. I think 2016 will be full of surprises. The start of the new year have been brutal, but we are not in a bear market yet. Nasdaq slid -1,82% on Monday and we are now about 1% from entering a bear market.

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The stock market need to fall more than 20% to be called a bear market. Otherwise it is just a correction. S&P 500 and the Dow peaked in May last year. Nasdaq peaked in July 2015, so it`s long time since the top. The spread has warned us in months.

As you may know, we are now entering a critical moment. But what`s holding the market up is the blue chips. Big companies can go up while many small companies can go down at the same time, and that can make the index go up.

The Dow consist of thirty leading companies, and are a price-weighted index. Stocks with high prices count for more than stocks with low prices. The index goes up if stocks with high prices are doing it better than stocks with low prices.

It`s different with Nasdaq, which consist of a hundreds of stocks and most of them are in the tech sector. Nasdaq is not price-weighted, but a capitalization-weighted index, which means the most valued companies like Alphabet and Apple count for more than smaller companies.

It`s easy to be blind if you only look at growth-stocks like Alphabet and Facebook. They are both big, but if you look at the Russel 2000 index, which is an index of small-cap and medium-cap stocks, it is different. That market is more nervous, because small and medium-cap stocks is more risky than blue chips.

Bullish investors argue that most of the bad news is already baked into the market, and if the carnage we have seen so far this year is a correction, we will se the market bounce back very soon. I will follow the oil price, what happens in China and the Fed the coming days. Fed Chair Yellen testifies on Wednesday and Thursday.

We are not in a recession and many institutional investors are closely watching the economy for any sign of negative GDP. We are not there now, but we are close. What we see is a decline in companies earnings. Big buyers are patient and will jump in once the correction is over. If not they will hit the panic-button.

2016 will be the year of change.

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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What`s up in the auto industry?

If people have jobs and wages with great income, they will spend money on things. One sector to look for is the auto industry. I wrote an article about the auto industry in December last year, and GM said the auto industry was up 75% since 2009.

In 2009, the auto sales was only 10,4 million vehicles, but skyrocketed to as much as 18,2 million in December 2015, which was the highest level since 2001. But what now?

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(Picture: Mercedes-Benz patent)

 

We know there is a fear in the market and so is it in the auto industry. The GM stocks are down and look very cheap at the moment. GM is trading at around $28, which is near multi-year lows and that is after GM has smashed Q4 earnings.

Low interest rate and cheap gasoline have without doubt been extremely good for GM. They sold a lot of trucks and SUV`s which turned the automaker to beat the analysts estimates. Both on revenue and earnings and posted a record net profit of $9,7 billion for 2015.

Not only that. GM promised to do it even better in the next quarter. How in the world can GM say that, and what makes GM`s reward for outperforming in a market where most of the other blue chips cut costs and fire workers to hold the stock up?

German automaker Daimler AG is down about 4% (11 am) so far on thursday followed by a lackluster earnings report and a weaker outlook for 2016. They said 2015 was a strong year, but investors are jumping off the wagon as they warned that the earnings and sales growth in 2016 are likely to fall.

Dieter Zetsche said that Daimler expects growth in China to be slower in 2016. China is Daimler`s biggest market and their sale rose 41% in 2015. Despite expected slower growth in China, Zetsche belive they can achieve market share gains.

The auto industry is not as bad as the oil industry. Low gasoline prices is good for the auto industry and bad for the oil industry. BP announced earnings and its profits crashed 91%! At the same time, Daimler increased their dividends from €2,45 to €3,25 which is the highest ever.

Zetsche also said that big things will happen for Daimler in 2016.

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Alphabet can be the largest company very soon

The most valuable company in terms of market capitalization is Apple with a market cap of 523,90. Alphabet`s market cap is 508,76, which means there is only 15,14 that separates them, which means Alphabet can be the largest company very soon.

66% of Apples sales comes from iPhone and Apples new release for iPhone 7 is in September. That is a very long time to wait. Before that, the sales can slow down, and so can the stock. It can go in the other direction for Alphabet.

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Alphabet will come out with a new report after the bell close today. Wall Street`s estimates for EPS is expected to come in at $8,17, with revenue of $16,9B.

Last summer, they changed the name to Alphabet Inc, but Google will continue as the company`s legacy business and include core properties such as search and advertising. Alphabet will continue to invest in self-driving cars, health care, Google-X and smart homes.

So, this will be the first quarter to see how both segments are doing it. Alphabet`s shares rose 46% last year after cost cutting initiatives and a lot of reorganizing. We will probably hear more about that later today.

Alphabet is focusing on innovation and growth and their search division has contributed to the recent robust growth. They introduced YouTube Red and will continue with acquisitions. They succeeded with their strategic mobile initiatives, so it should be a good quarter for Alphabet (GOOGL).

Alphabet can be the largest company very soon.

 

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Amazon will advertise on Super Bowl

Another Wall Street darling is set to report after the closing bell today. A company we talked about nearly every day in the late 90`s. A company that survived the dot-com bubble. A company that is up 33,000% since then and up about 90% last year.

Amazon has become a big competitor to Wal-Mart and Target and it is expected to see that trend to continue. Amazon Prime`s subscriptions have doubled in two years and they offer users free two-day shipping, cloud storage and streaming.

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The Estimize Mean consensus calls for EPS of $1,64, three cents above the Wall Street estimate. Revenue expectations for $35,9B in-line with the Street`s consensus, and higher than guidance of $35,13B. Sales are expected to rise about 20% YoY.

I expect to hear more about their cloud computing platform which has become a new business segment in the company. Amazon Web Services (AWS), accounts for about 8% of total revenue, and the business is growing.

So are Prime time, which is a strong loyalty program for Amazons customers. They have free shipping and have the ability to stream and listen to  music  in the same package. Its been proved that loyal customers at Amazon Prime shop twice or more per month than non-subscribers.

Amazon said they added 3 million Prime subscribers before christmas day last year, and it isnt slowing. If this continue, Amazon will end up having 50% of all U.S hoseholds subscribed to Prime in 2020, according to Macquarie Research. Thats awesome.

Amazon hired a record 10,000 people in Europe in 2015 which is taking its workforce above 41,000. This will continue, and Amazon is stepping up its investment plans in Europe this year. In 2016, they plan to hire more staff as it seeks to expand amid a stricter scrutiny of its tax, privacy and employment records.

Amazon is also planning to advertise during this years Super Bowl for the first time. An ad by «30 Rock» star <strong>Alec Baldwin</strong> and former National Football League quarterback <strong>Dan Marino</strong>. The ad will highlight Amazons Echo speaker and its voice-activated virtual assistant Alexa. What do you think will happen the day after that ad? The sales will skyrocket.

What`s peculiar about Amazon is the price earnings at 831,80! Wow!

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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